Dealer Operations and Compliance Flashcards
7 cards from real Motor Vehicle Division practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Dealer Operations and Compliance flashcards as text
A dealer sells a used vehicle without disclosing a prior salvage title. What is the most likely regulatory consequence?
Answer: License suspension or revocation
Failing to disclose a salvage title is material fraud, which can result in license suspension or revocation by the MVD.
Under federal Buyers Guide rules (FTC Used Car Rule), where must the Buyers Guide be displayed?
Answer: In the vehicle's side window
The FTC requires the Buyers Guide to be displayed in a side window of each used vehicle offered for sale.
A franchised new-car dealer wants to also sell used vehicles. Which statement is correct?
Answer: Most states require a separate used vehicle dealer endorsement or license
Many states require dealers to obtain a separate used vehicle dealer license or endorsement even when they hold a new-car franchise.
How long must a licensed dealer typically retain odometer disclosure statements under federal law?
Answer: Five years
Federal law (49 CFR Part 580) requires dealers to retain odometer disclosure statements for five years.
A dealer's surety bond is primarily designed to protect whom?
Answer: Consumers and the state from dealer misconduct
Surety bonds protect consumers and the state by providing a financial remedy if the dealer engages in fraudulent or unlawful acts.
What does 'floor plan financing' refer to in a dealership context?
Answer: A revolving line of credit used to finance vehicle inventory
Floor plan financing is a revolving credit line that dealers use to purchase new and used vehicle inventory from manufacturers or auctions.
A dealer advertises '0% APR for 60 months' in large print but omits that it requires a 20% down payment. This likely violates which principle?
Answer: Truth in Lending Act (Regulation Z) disclosure requirements
Regulation Z requires that triggering terms like APR be accompanied by all material credit terms, including any required down payment.