FREE Motor Vehicle Division Dealer Operations and Compliance Questions and Answers

Question 1

A motor vehicle dealer must maintain records of all vehicle purchases and sales.
According to common state regulations, how long must these records, including odometer disclosure statements, be retained?

Accepted Answer

Five years from the date of sale.

Answer

One year from the date of sale.

Answer

Three years from the date of the last payment.

Answer

Indefinitely.

Question 2

A dealership's advertisement for a used car prominently features a low price, but in small print, it states this price is only available to customers who finance with the dealership and trade in a vehicle from the last five model years. Which advertising practice is this dealership likely violating?

Accepted Answer

Bait-and-switch advertising.

Answer

Puffery, which is legally acceptable.

Answer

Standard industry practice for promotions.

Answer

Full and clear disclosure rules.

Question 3

What is the primary purpose of a motor vehicle dealer surety bond?

Accepted Answer

To protect consumers from financial loss due to a dealer's fraudulent or unlawful actions.

Answer

To insure the dealership's vehicle inventory against theft or damage.

Answer

To pay for the dealership's licensing and registration fees with the state.

Answer

To provide a source of funds for paying dealership employees and vendors.

Question 4

A dealer wishes to hold a weekend sales event at a local shopping mall parking lot, away from their licensed business location. Which of the following is typically required for the dealer to legally conduct sales at this event?

Accepted Answer

An off-premise sales permit or supplemental license from the MVD.

Answer

A verbal agreement with the mall management.

Answer

A standard business license is sufficient.

Answer

A notification sent to the local chamber of commerce.

Question 5

Under the Federal Truth in Mileage Act (TIMA), when is a written odometer disclosure statement required?

Accepted Answer

Every time ownership of a motor vehicle is transferred.

Answer

Only when the vehicle is more than 10 years old.

Answer

Only for vehicles sold for more than $25,000.

Answer

Only when a vehicle is sold at auction.

Question 6

Regarding dealership record-keeping, which statement is most accurate about the storage of transaction files?

Accepted Answer

The most recent records (e.g., the current and previous 13 months) must be kept at the dealership, while older records may be stored off-site.

Answer

All records for the past five years must always be stored at the licensed dealership location.

Answer

Records can be stored in any format, including handwritten notes, as long as they are legible.

Answer

Dealers only need to keep the original title and bill of sale; all other documents can be discarded after the sale.

A motor vehicle dealer must maintain records of all vehicle purchases and sales.According to common state regulations, how long must these records, including odometer disclosure statements, be retained?

A motor vehicle dealer must maintain records of all vehicle purchases and sales.
According to common state regulations, how long must these records, including odometer disclosure statements, be retained?