Motor Vehicle Division Dealer Operations and Compliance 4

Question 1

A dealer's license is placed on 'probation' by the MVD. What does this typically mean?

Accepted Answer

The dealer may continue operating under strict conditions and monitoring

Answer

Probation allows a dealer to keep operating while subject to heightened oversight, additional reporting, or corrective action requirements.

Question 2

When a dealer takes a vehicle in on trade, what is the dealer's obligation regarding an existing lien on that vehicle?

Accepted Answer

The dealer must pay off the lien before transferring a clean title to a new buyer

Answer

A dealer must satisfy any outstanding lien on a trade-in to deliver a clear, marketable title to the subsequent buyer.

Question 3

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?

Accepted Answer

The threshold varies by state, typically between 2 and 5 vehicles per year

Answer

States set their own thresholds for when repeated private sales trigger dealer licensing requirements, commonly 2–5 vehicles annually.

Question 4

A dealer receives a 'chargeback' from a finance company. What does this mean?

Accepted Answer

The finance company returns reserve profit to the dealer because the loan paid off early

Answer

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.

Question 5

Under the Gramm-Leach-Bliley Act, dealers who arrange financing must provide customers with:

Accepted Answer

A privacy notice explaining how the customer's financial information is shared

Answer

The GLB Act requires financial institutions, including dealers who arrange credit, to give consumers a privacy notice at the time of the transaction.

Motor Vehicle Division Practice Test

Motor Vehicle Division Practice Test

Motor Vehicle Division Dealer Operations and Compliance 4