Car Sales Exam Questions and Answers
100% Solved | Graded A+
Annual Percentage Rate (APR) - ✔✔Also called a finance rate, this is the interest
rate on a loan; a percentage of the amount borrowed that a lender charges
annually for the use of its money.
Acquisition Fee - ✔✔A fee charged by the dealer for initiating a lease; ostensibly
covers the costs of processing the lease—credit reports and insurance
verification, for example—but is in actuality pure profit. Although many fees
associated with a lease are negotiable, this one is generally unavoidable.
Balloon Payment/Balloon Loan - ✔✔A loan that pays off only a portion of a
vehicle during its term and demands a large sum—the "balloon"—to be paid at
the end of the loan.
Make - ✔✔Refers to the brand (or nameplate) of vehicle ex. Ford, Honda,
Chrysler, Toyota, etc.
Bump - ✔✔The difference between the rate a dealer pays for financing on a
loan or a lease (called the Buy Rate) and the rate at which they sell the financing
to you (the Sell Rate)—typically around one percent. Dealers generally don't
disclose this bump, so do your homework on the actual rate being offered by
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, the manufacturer or finance company and negotiate to reduce or eliminate the
bump. Also known as a Spread.
Model - ✔✔Refers to a specific vehicle name within a make ex. Ford MUSTANG,
Honda ACCORD, Toyota CAMRY
Manufacturer - ✔✔The builder of a vehicle and many consist of one or several
makes of vehicle ex. Ford (Ford, Lincoln), General Motors (Chevrolet, Buick,
GMC, Cadillac), Toyota (Toyota, Lexus), Volkswagen (Volkswagen, Porsche, Audi,
Lamborghini, Bugatti, Bently)
MSRP - ✔✔Manufacturer's suggested retail price also known as "retail price" or
"window sticker". This is what is listed for the basic price and all options on the
Monroney Sticker
Price - ✔✔Represents the price you pay for the vehicle when all is said and
done, but there is no hard and fast rule
Processing Fee - ✔✔A fee a dealer may use at their discretion. It does not reflect
any particular cost & depending on what state you're in, may have mandated
upper limit
Protection Package - ✔✔Another set of forced items, like an appearance
package, although the mix of items may vary (or be the same) and can include:
2|Page
©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
100% Solved | Graded A+
Annual Percentage Rate (APR) - ✔✔Also called a finance rate, this is the interest
rate on a loan; a percentage of the amount borrowed that a lender charges
annually for the use of its money.
Acquisition Fee - ✔✔A fee charged by the dealer for initiating a lease; ostensibly
covers the costs of processing the lease—credit reports and insurance
verification, for example—but is in actuality pure profit. Although many fees
associated with a lease are negotiable, this one is generally unavoidable.
Balloon Payment/Balloon Loan - ✔✔A loan that pays off only a portion of a
vehicle during its term and demands a large sum—the "balloon"—to be paid at
the end of the loan.
Make - ✔✔Refers to the brand (or nameplate) of vehicle ex. Ford, Honda,
Chrysler, Toyota, etc.
Bump - ✔✔The difference between the rate a dealer pays for financing on a
loan or a lease (called the Buy Rate) and the rate at which they sell the financing
to you (the Sell Rate)—typically around one percent. Dealers generally don't
disclose this bump, so do your homework on the actual rate being offered by
1|Page
©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
, the manufacturer or finance company and negotiate to reduce or eliminate the
bump. Also known as a Spread.
Model - ✔✔Refers to a specific vehicle name within a make ex. Ford MUSTANG,
Honda ACCORD, Toyota CAMRY
Manufacturer - ✔✔The builder of a vehicle and many consist of one or several
makes of vehicle ex. Ford (Ford, Lincoln), General Motors (Chevrolet, Buick,
GMC, Cadillac), Toyota (Toyota, Lexus), Volkswagen (Volkswagen, Porsche, Audi,
Lamborghini, Bugatti, Bently)
MSRP - ✔✔Manufacturer's suggested retail price also known as "retail price" or
"window sticker". This is what is listed for the basic price and all options on the
Monroney Sticker
Price - ✔✔Represents the price you pay for the vehicle when all is said and
done, but there is no hard and fast rule
Processing Fee - ✔✔A fee a dealer may use at their discretion. It does not reflect
any particular cost & depending on what state you're in, may have mandated
upper limit
Protection Package - ✔✔Another set of forced items, like an appearance
package, although the mix of items may vary (or be the same) and can include:
2|Page
©KERRYMARTIN 2025/2026. YEAR PUBLISHED 2025.
