AFIP TEST PAPER QUESTIONS AND
SOLUTIONS
⩥ Who is the primary enforcer of consumer laws within a state. The
organization a dealer would most likely encounter? Answer: Attorney
General
⩥ If we treat consumers fairly and ethically, then there is
______________ on the government to enact legislation and write
additional rules. Answer: Less Pressure
⩥ Which organizations in our industry does the Federal Trade
Commission (FTC) oversee? Answer: Franchise New Dealers
⩥ What does UDAAP stand for? Answer: Unfair, Deceptive Abusive
Acts or Practices
⩥ Which organizations in our industry does the Consumer Financial
Protection Bureau (CFPB) oversee? Answer: Independent Used Dealers
Buy Here Pay Here (BHPH)
Lease Here Pay Here (LHPH)
Finance Sources
,⩥ When it comes to a RISC and a lease, the financial institution has a
lien on the vehicle. Why? Answer: The vehicle is collateral (the thing of
value)
⩥ What is the definition of a contract? Answer: A promise or set of
promises between two or more parties that is enforced by law
⩥ What does it mean to "force place" the insurance? Answer: The
finance source will purchase the required coverage and charge it to the
customers monthly payment
⩥ Who is the primary enforcer of consumer laws within a state. The
organization a dealer would most likely encounter? Answer: Attorney
General
⩥ What does it mean to "Accelerate the Balance." Answer: The finance
source will make the full outstanding balance due and payable
⩥ What could block the formation of a valid contract? Answer:
Dishonesty with a Consumer or Customer
Misrepresentation of Facts or Statements
Fraudulent Inducement
Someone Lacks Mental Capacity
, Underage
⩥ What does it mean to "educate the consumer before they
consummate." Answer: If a customer doesn't understand something in
the contract, I should make an effort to help them understand
If I don't know the answer to a term or condition on the contract I get
upper management involved to help explain it
It is my responsibility to understand the terms and conditions on the
contracts I am administering
Help the customer to understand the terms and conditions of the contract
by clarifying key items they have concerns with
⩥ What is the right of recission? Answer: The ability for a customer to
get out of a contract
⩥ What are the three (3) steps in contracting? Answer: Offer,
Acceptance, Consideration
⩥ A "Credit Sale" is considered _________ and a "Loan" is considered
__________. Answer: Dealer Assisted Financing; Customer Arranged
Financing
⩥ According to the federal requirements under TILA Reg Z. When do
we use APR? Answer: As a disclosure on the installment contract
Only in installment advertising, it is not required in lease ads
SOLUTIONS
⩥ Who is the primary enforcer of consumer laws within a state. The
organization a dealer would most likely encounter? Answer: Attorney
General
⩥ If we treat consumers fairly and ethically, then there is
______________ on the government to enact legislation and write
additional rules. Answer: Less Pressure
⩥ Which organizations in our industry does the Federal Trade
Commission (FTC) oversee? Answer: Franchise New Dealers
⩥ What does UDAAP stand for? Answer: Unfair, Deceptive Abusive
Acts or Practices
⩥ Which organizations in our industry does the Consumer Financial
Protection Bureau (CFPB) oversee? Answer: Independent Used Dealers
Buy Here Pay Here (BHPH)
Lease Here Pay Here (LHPH)
Finance Sources
,⩥ When it comes to a RISC and a lease, the financial institution has a
lien on the vehicle. Why? Answer: The vehicle is collateral (the thing of
value)
⩥ What is the definition of a contract? Answer: A promise or set of
promises between two or more parties that is enforced by law
⩥ What does it mean to "force place" the insurance? Answer: The
finance source will purchase the required coverage and charge it to the
customers monthly payment
⩥ Who is the primary enforcer of consumer laws within a state. The
organization a dealer would most likely encounter? Answer: Attorney
General
⩥ What does it mean to "Accelerate the Balance." Answer: The finance
source will make the full outstanding balance due and payable
⩥ What could block the formation of a valid contract? Answer:
Dishonesty with a Consumer or Customer
Misrepresentation of Facts or Statements
Fraudulent Inducement
Someone Lacks Mental Capacity
, Underage
⩥ What does it mean to "educate the consumer before they
consummate." Answer: If a customer doesn't understand something in
the contract, I should make an effort to help them understand
If I don't know the answer to a term or condition on the contract I get
upper management involved to help explain it
It is my responsibility to understand the terms and conditions on the
contracts I am administering
Help the customer to understand the terms and conditions of the contract
by clarifying key items they have concerns with
⩥ What is the right of recission? Answer: The ability for a customer to
get out of a contract
⩥ What are the three (3) steps in contracting? Answer: Offer,
Acceptance, Consideration
⩥ A "Credit Sale" is considered _________ and a "Loan" is considered
__________. Answer: Dealer Assisted Financing; Customer Arranged
Financing
⩥ According to the federal requirements under TILA Reg Z. When do
we use APR? Answer: As a disclosure on the installment contract
Only in installment advertising, it is not required in lease ads
