FLHSMV Motor Vehicle Dealer Regulations 3 — Questions and Answers
Question 1: Under Florida law, which of the following is considered an 'independent dealer'?
- A dealer with a franchise agreement with an auto manufacturer
- A dealer who sells only new vehicles
- A dealer who sells used vehicles without a manufacturer franchise (Correct answer)
- A dealer licensed in another state but operating in Florida
Correct answer: A dealer who sells used vehicles without a manufacturer franchise
An independent dealer in Florida sells used vehicles and does not hold a franchise agreement with a vehicle manufacturer.
Question 2: A Florida motor vehicle dealer applicant has a felony conviction. How does this affect their application?
- Felony convictions automatically disqualify an applicant permanently
- FLHSMV may deny the license based on the nature and circumstances of the felony (Correct answer)
- Felonies more than 5 years old are automatically waived
- Only drug-related felonies are considered disqualifying
Correct answer: FLHSMV may deny the license based on the nature and circumstances of the felony
FLHSMV reviews felony convictions on a case-by-case basis considering the nature, circumstances, and rehabilitation evidence.
Question 3: What is the maximum number of vehicles a 'casual or occasional' seller may sell in Florida without needing a dealer license?
- 2 vehicles per year
- 4 vehicles per year (Correct answer)
- 6 vehicles per year
- 10 vehicles per year
Correct answer: 4 vehicles per year
Florida law allows individuals to sell up to 4 motor vehicles per year without requiring a dealer license.
Question 4: A Florida dealer's license must be renewed:
- Every year
- Every two years (Correct answer)
- Every three years
- Every five years
Correct answer: Every two years
Florida motor vehicle dealer licenses are renewed on a biennial (every two years) basis.
Question 5: Which of the following actions would require a dealer to notify FLHSMV?
- Hiring a new salesperson
- Changing the dealership's physical address (Correct answer)
- Purchasing a new inventory management system
- Updating the dealership's website
Correct answer: Changing the dealership's physical address
Dealers must notify FLHSMV of any change in business location, as the license is location-specific.
Question 6: A Florida dealer who sells a vehicle without transferring the title within the required timeframe may face:
- Only a verbal warning from FLHSMV
- A fine and potential license suspension (Correct answer)
- Mandatory dealer education training only
- Increased bond requirements for the next year
Correct answer: A fine and potential license suspension
Failure to timely transfer title is a violation that can result in fines and license suspension.
Question 7: The 'dealer reserve' in a vehicle financing transaction refers to:
- Funds set aside for vehicle repairs before sale
- Additional profit a dealer earns from markup on the finance rate (Correct answer)
- A deposit held by the dealer pending loan approval
- Insurance proceeds retained by the dealer
Correct answer: Additional profit a dealer earns from markup on the finance rate
Dealer reserve is the difference between the interest rate the lender approves and the rate the dealer charges the customer, representing additional profit.
FLHSMV Motor Vehicle Dealer Regulations 3
Under Florida law, which of the following is considered an 'independent dealer'?