Free NADA Legal & Ethical Compliance Questions and Answers

Question 1

What is the primary purpose of legal compliance in dealership operations?

Accepted Answer

To follow laws and avoid penalties

Answer

To create more paperwork

Answer

To avoid ethical training

Answer

To reduce employee hours

Question 2

Which law protects consumers from unfair or deceptive practices?

Accepted Answer

FTC Act

Answer

DMV Code

Answer

Vehicle Leasing Act

Answer

Service Bureau Rule

Question 3

What does the Gramm-Leach-Bliley Act (GLBA) focus on?

Accepted Answer

Data privacy and safeguards

Answer

Auto recalls

Answer

Marketing campaigns

Answer

Inventory tracking

Question 4

Why is ethical conduct essential in dealership practices?

Accepted Answer

To build trust and credibility

Answer

To meet sales quotas

Answer

To reduce staff meetings

Answer

To avoid documentation

Question 5

What is an example of unethical dealership behavior?

Accepted Answer

Falsifying vehicle condition

Answer

Offering financing options

Answer

Disclosing all vehicle history

Answer

Following FTC guidelines

Question 6

Which regulation requires dealerships to provide a written warranty on used vehicles?

Accepted Answer

Used Car Rule

Answer

Lemon Law

Answer

Credit Repair Act

Answer

Fair Market Value Law

Question 7

How should dealerships handle customer complaints ethically?

Accepted Answer

Respond promptly and respectfully

Answer

Ignore the issue

Answer

Blame the customer

Answer

Delay until legal action

Question 8

Which federal law regulates truth in advertising for auto dealerships?

Accepted Answer

TILA - Truth in Lending Act

Answer

Vehicle Disclosure Law

Answer

DMV Code

Answer

Certified Pre-Owned Act

Question 9

Why is compliance training important for dealership employees?

Accepted Answer

To prevent legal and ethical violations

Answer

To increase commission rates

Answer

To reduce working hours

Answer

To memorize vehicle specs