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's license is placed on 'probation' by the MVD. What does this typically mean?
Answer: The dealer may continue operating under strict conditions and monitoring
Probation allows a dealer to keep operating while subject to heightened oversight, additional reporting, or corrective action requirements.
When a dealer takes a vehicle in on trade, what is the dealer's obligation regarding an existing lien on that vehicle?
Answer: The dealer must pay off the lien before transferring a clean title to a new buyer
A dealer must satisfy any outstanding lien on a trade-in to deliver a clear, marketable title to the subsequent buyer.
What is the maximum number of vehicles a private individual may sell per year in most states before being required to obtain a dealer license?
Answer: The threshold varies by state, typically between 2 and 5 vehicles per year
States set their own thresholds for when repeated private sales trigger dealer licensing requirements, commonly 2–5 vehicles annually.
A dealer receives a 'chargeback' from a finance company. What does this mean?
Answer: The finance company returns reserve profit to the dealer because the loan paid off early
A chargeback occurs when a lender reclaims the dealer reserve (finance profit) because the customer paid off the loan before a minimum term, typically 90 days.
Under the Gramm-Leach-Bliley Act, dealers who arrange financing must provide customers with:
Answer: A privacy notice explaining how the customer's financial information is shared
The GLB Act requires financial institutions, including dealers who arrange credit, to give consumers a privacy notice at the time of the transaction.
A dealer advertises a vehicle at a specific price online but charges a higher price in the showroom. This practice is commonly called:
Answer: Bait-and-switch advertising
Bait-and-switch involves advertising a low price to attract customers and then substituting a higher price or different vehicle at the point of sale.
A dealer must affix a 'Manufacturer's Suggested Retail Price' (MSRP) sticker to each new vehicle. This requirement comes from which law?
Answer: The Automobile Information Disclosure Act (Monroney Act)
The Monroney Act (Automobile Information Disclosure Act) mandates that new vehicles display the MSRP sticker with pricing and equipment details.