Motor Vehicle Division Dealer Operations and Compliance 3 — Questions and Answers
Question 1: Which federal agency oversees the National Motor Vehicle Title Information System (NMVTIS)?
- U.S. Department of Justice (Correct answer)
- Federal Trade Commission
- National Highway Traffic Safety Administration
- Consumer Financial Protection Bureau
Correct answer: U.S. Department of Justice
NMVTIS is administered by the U.S. Department of Justice and provides title history data to reduce title fraud.
Question 2: A dealer operating a 'buy-here, pay-here' lot must comply with additional regulations primarily related to:
- In-house financing and Truth in Lending disclosures (Correct answer)
- Franchise agreements with manufacturers
- Federal bumper standards for new vehicles
- International vehicle import restrictions
Correct answer: In-house financing and Truth in Lending disclosures
Buy-here, pay-here dealers act as in-house lenders and must comply with TILA/Regulation Z consumer credit disclosure requirements.
Question 3: What is the primary purpose of a Dealer Reassignment of Title (also called a dealer reassignment)?
- To transfer ownership between dealers without reissuing the title each time (Correct answer)
- To cancel a customer's purchase contract
- To report an odometer discrepancy to the state
- To apply for a new dealer plate
Correct answer: To transfer ownership between dealers without reissuing the title each time
A dealer reassignment allows title to pass through multiple dealers without the state issuing a new title for each transaction.
Question 4: Under most state laws, a licensed dealer must obtain a new dealer license when:
- The dealer moves to a new physical location (Correct answer)
- A salesperson leaves the dealership
- The dealer purchases a new vehicle for their personal use
- The dealer's floor plan lender changes
Correct answer: The dealer moves to a new physical location
Most states tie a dealer license to a specific approved physical location, so relocation requires a new or amended license.
Question 5: An 'as-is' designation on a Buyers Guide means:
- The dealer provides no warranty and the buyer assumes all repair costs after purchase (Correct answer)
- The vehicle has passed a safety inspection
- The dealer is responsible for repairs for 30 days
- The vehicle is exempt from lemon law coverage
Correct answer: The dealer provides no warranty and the buyer assumes all repair costs after purchase
Selling 'as-is' means the dealer makes no warranty, and the buyer bears the full cost of any post-sale repairs.
Question 6: A dealer is required to report a vehicle as 'junk' or 'salvage' to the state when:
- An insurance company declares the vehicle a total loss (Correct answer)
- The vehicle fails a smog inspection
- The odometer rolls over 100,000 miles
- The dealer buys the vehicle at auction
Correct answer: An insurance company declares the vehicle a total loss
Insurance companies and dealers must notify the state when a vehicle is declared a total loss so the title can be branded as salvage.
Question 7: Which document must a dealer provide to a customer at the time of a vehicle sale that itemizes all fees and charges?
- Itemized Buyer's Order or Purchase Agreement (Correct answer)
- Certificate of Origin
- Dealer Reassignment Form
- Fleet Sale Exemption Certificate
Correct answer: Itemized Buyer's Order or Purchase Agreement
The Buyer's Order or Purchase Agreement must itemize vehicle price, taxes, fees, and any add-on charges so the buyer can review them.
Motor Vehicle Division Dealer Operations and Compliance 3
Which federal agency oversees the National Motor Vehicle Title Information System (NMVTIS)?