AFIP Certification
(True/False): Ignorance of the law will shield you from liability if you are noncompliant. - Answer-False
(True/False): As an F&I manager working directly with customers, you are individually responsible for
your actions and what you say to each customer. - Answer-True
In a typical credit transaction the (bank)/(dealer) is the creditor. - Answer-The dealer is the creditor
What is a contract? - Answer-A contract is an agreement involving a promise or set of promises that the
law enforces or protects.
The formation of a contract requires three elements: - Answer-1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - Answer-1. An expression of a promise or commitment (intent) to
enter a contract
2. An expression of definite and certain terms
3. The communication of the offer to the offeree (in this case, the customer)
,An offer may be terminated by: - Answer-1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - Answer-1. The offer is accepted by one who is
entitled to accept
2. The acceptance takes the proper form and is timely
3. The terms of acceptance reflect closely the terms of the offer and, therefore, do not amount to a
counteroffer
The Statute of Frauds - Answer-Generally requires that all contracts involving the sale of goods for a
price of $500 or more be in writing.
The Statute of Frauds requires a written contract for the sale of goods for a price of _______ or more. -
Answer-$500
What is required in order for the parties (the individuals entering into the contract) to have "legal
capacity?" - Answer-The parties to the contract must be of legal age under the laws of the state in which
the contract is written.
Criteria that can block the formation of a valid contract: - Answer-1. The need for a written agreement
under the Statute of Frauds and certain provisions of the Uniform Commercial Code (U.C.C.)
2. The need for legal capacity of a party to contract
3. The act of fraudulent inducement
What is "consideration" as it applies to a contract? - Answer-The requirement that each party to the
contract receives something of value in exchange for what is given.
Finance Charge - Answer-The Finance Charge is the resulting dollar amount calculated by applying the
Annual Percentage Rate to the Amount Financed over the term of the contract.
,How the Itemization of Amount Financed is completed - Answer-1. Cash Price (Agreed to price of
vehicle)
2. Total Downpayment
3. Unpaid Balance of Cash Price(Cash Price-Downpayment)
4. Other Charges (GAP, VSC, Etc.)
5. Amount Financed
4 Key Sections of an installment sale contract - Answer-Section A) General Information -- Identifies the
parties to the agreement.
Section B) Mandated Disclosures -- Disclosures required by TILA
Section C) Insurance-Related Disclosures --Credit insurance is optional
Section D) Signature Blocks - Notice to Buyer Disclosures --Bind all parties to contract
The introductory information and promise to pay contained in Section A of Retail Installment Form -
Answer-Promise to Pay - This section outlines the purpose of the transaction and the primary obligations
that will be incurred from signing the contract.
The difference between full or partial recourse and no recourse assignments. - Answer-Essentially
determines the length of time, if any, the seller is responsible for the actions of the buyer.
Warranty disclaimers do not apply to _______ warranties on new or used vehicles to which that
warranty still applies. - Answer-Manufacturer's
, A(n) _______ clause allows the creditor to declare the entire outstanding balance due and payable. -
Answer-Acceleration
As recorded on an installment sale agreement, the total sale price or deferred contract price would be
the total of the ________. - Answer--Payments
-Downpayment
-Net Trade-In
Which is NOT listed as a mandated TILA box disclosure? - Answer-Holder-in-Due Course Notice
In most states, the _______ is deemed to be part of the purchase agreement. - Answer-Buyer's Guide
(True/False) Because the late charges that may be imposed on an installment sale agreement are
regulated at the state level, the amount of the late charge is NOT a required disclosure item. - Answer-
False
At the time of consummation, an installment sale contract is between the _______ and the _______. -
Answer-Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transactions for vehicles purchased for what
type(s) of uses? - Answer-Personal, Family or Household
What is always the largest number on an installment sale agreement? - Answer-The total sale price
What does "force-placed" or "creditor-placed" mean? - Answer-Allows the creditor to force place
insurance - that is, buy physical damage insurance to cover the creditor's interest in the vehicle or the
creditor's and the buyer's interest in the vehicle if the buyer fails to do so.
(True/False): Ignorance of the law will shield you from liability if you are noncompliant. - Answer-False
(True/False): As an F&I manager working directly with customers, you are individually responsible for
your actions and what you say to each customer. - Answer-True
In a typical credit transaction the (bank)/(dealer) is the creditor. - Answer-The dealer is the creditor
What is a contract? - Answer-A contract is an agreement involving a promise or set of promises that the
law enforces or protects.
The formation of a contract requires three elements: - Answer-1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - Answer-1. An expression of a promise or commitment (intent) to
enter a contract
2. An expression of definite and certain terms
3. The communication of the offer to the offeree (in this case, the customer)
,An offer may be terminated by: - Answer-1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - Answer-1. The offer is accepted by one who is
entitled to accept
2. The acceptance takes the proper form and is timely
3. The terms of acceptance reflect closely the terms of the offer and, therefore, do not amount to a
counteroffer
The Statute of Frauds - Answer-Generally requires that all contracts involving the sale of goods for a
price of $500 or more be in writing.
The Statute of Frauds requires a written contract for the sale of goods for a price of _______ or more. -
Answer-$500
What is required in order for the parties (the individuals entering into the contract) to have "legal
capacity?" - Answer-The parties to the contract must be of legal age under the laws of the state in which
the contract is written.
Criteria that can block the formation of a valid contract: - Answer-1. The need for a written agreement
under the Statute of Frauds and certain provisions of the Uniform Commercial Code (U.C.C.)
2. The need for legal capacity of a party to contract
3. The act of fraudulent inducement
What is "consideration" as it applies to a contract? - Answer-The requirement that each party to the
contract receives something of value in exchange for what is given.
Finance Charge - Answer-The Finance Charge is the resulting dollar amount calculated by applying the
Annual Percentage Rate to the Amount Financed over the term of the contract.
,How the Itemization of Amount Financed is completed - Answer-1. Cash Price (Agreed to price of
vehicle)
2. Total Downpayment
3. Unpaid Balance of Cash Price(Cash Price-Downpayment)
4. Other Charges (GAP, VSC, Etc.)
5. Amount Financed
4 Key Sections of an installment sale contract - Answer-Section A) General Information -- Identifies the
parties to the agreement.
Section B) Mandated Disclosures -- Disclosures required by TILA
Section C) Insurance-Related Disclosures --Credit insurance is optional
Section D) Signature Blocks - Notice to Buyer Disclosures --Bind all parties to contract
The introductory information and promise to pay contained in Section A of Retail Installment Form -
Answer-Promise to Pay - This section outlines the purpose of the transaction and the primary obligations
that will be incurred from signing the contract.
The difference between full or partial recourse and no recourse assignments. - Answer-Essentially
determines the length of time, if any, the seller is responsible for the actions of the buyer.
Warranty disclaimers do not apply to _______ warranties on new or used vehicles to which that
warranty still applies. - Answer-Manufacturer's
, A(n) _______ clause allows the creditor to declare the entire outstanding balance due and payable. -
Answer-Acceleration
As recorded on an installment sale agreement, the total sale price or deferred contract price would be
the total of the ________. - Answer--Payments
-Downpayment
-Net Trade-In
Which is NOT listed as a mandated TILA box disclosure? - Answer-Holder-in-Due Course Notice
In most states, the _______ is deemed to be part of the purchase agreement. - Answer-Buyer's Guide
(True/False) Because the late charges that may be imposed on an installment sale agreement are
regulated at the state level, the amount of the late charge is NOT a required disclosure item. - Answer-
False
At the time of consummation, an installment sale contract is between the _______ and the _______. -
Answer-Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transactions for vehicles purchased for what
type(s) of uses? - Answer-Personal, Family or Household
What is always the largest number on an installment sale agreement? - Answer-The total sale price
What does "force-placed" or "creditor-placed" mean? - Answer-Allows the creditor to force place
insurance - that is, buy physical damage insurance to cover the creditor's interest in the vehicle or the
creditor's and the buyer's interest in the vehicle if the buyer fails to do so.
