CALIFORNIA DEALER LICENSE TEST EXAM QUESTIONS WITH REVISED CORRECT ANSWERS

CALIFORNIA DEALER LICENSE TEST EXAM QUESTIONS WITH REVISED CORRECT ANSWERS “A conditional Sales Contract contains which of the following? a. Must be signed by both buyer and seller b. Terms of financing must be disclosed C. All of the above - CORRECT ANSWER C. All of the above" "Which of the following are true regarding the Report of Sale(ROS)? a. Dealer has 5 days to submit the bottom portion Report of Sale (not counting the date of sale) b. If late, dealer must pay $5.00 ASF penalty c. Dealer must display bottom portion of ROS on Customer vehicle before delivery d. All of the above - CORRECT ANSWER d. All of the above" "Which of the following are true regarding the Vehicle title and Transfer fees? a. Transfer fees are $15.00 b. If late, dealer must pay $5 ASF penalty c. All of the above - CORRECT ANSWER C. All of the above" "If the Board of Equalization revokes or suspends your Seller's Permit, what is the result? a. Cancellation of Dealer's License b. Automatic Revocation of Seller's Permit c. Revocation or suspension of the Dealer's License - CORRECT ANSWER a. Cancellation of Dealer's License" "Every Dealer must notify DMV of the effective day of change of ownership: a. 10 days prior to effective date b. Within 5 days prior to effective date c. Within 15 days d. Within 20 days - CORRECT ANSWER a. 10 days prior to effective date" "Every Dealer must notify DMV of the effective day of the change of location: a. Immediately b. Within 5 days c. Within 10 days d. Within 20 days - CORRECT ANSWER a. Immediately" "Which of the following are not taxable in a vehicle sales transaction? a. Finance charges b. Insurance charges c. Smog certificate fee (paid to state) d. All of the above - CORRECT ANSWER d. All of the above" "DMV requires Special Plates (dealer plates) be placed where on the vehicle? - CORRECT ANSWER In the rear, over the existing license plate." "Auto-brokers must do which of the following: a. Limit deposits to 2.5% of the purchase price, and put all deposits in a separate trust account b. Use any deposits received to pay the broker - CORRECT ANSWER a. Limit deposits to 2.5% of the purchase price and put all deposits in a separate trust account" "Which of the following is not required to transfer a vehicle? a. Endorsed Certificate of Ownership b. A report of prior service records for the vehicle since new c. Odometer mileage reading d. Smog Certificate - CORRECT ANSWER b. A report of prior service records for the vehicle since new" "Which of the following must sign the Certificate of Ownership? a. The legal owner b. The registered owner c. The transferee d. All of the above - CORRECT ANSWER The legal owner, the registered owner, and the transferee." "Registration fees are due at the time of retail sale where ... - CORRECT ANSWER The registration will expire within 30 days of the date of sale OR the registration has already expired." "If the registration of a vehicle expires while a vehicle is in the dealer's inventory, is the dealer responsible for paying late registration penalties? - CORRECT ANSWER No" "The dealership display area must: a. At least twice the size of the dealership office. b. For the exclusive use of the dealer for display purposes only. c. Within 1000 feet of the dealership office d. Both B and C - CORRECT ANSWER d. Both B and C" "Which of the following are required for dealership signs? a. Each retail dealership must have a sign not less than 2 feet square that can be read from 50 feet away. b. Each sign must be posted at three locations at the dealership. c. Each sign must be lighted and/or viewable at night from a distance d. Both A and B - CORRECT ANSWER a. Each retail dealership must have a sign that is 2 ft by 2 ft" "What must a dealer post at every business location? - CORRECT ANSWER Each salesperson's license and the Dealer license" "The maximum a dealer may charge a customer for a smog test is: a. $8 b. $12 c. $50 d. $45 - CORRECT ANSWER c. $50" "The basic DMV transfer fee to transfer the title into the buyer's name is a. $15 b. $12 c. $80 d. $25 - CORRECT ANSWER a. $15" "An administrative service fee is imposed for which of the following: a. All of the answers b, c, and d, below b. Failing to notify DMV of a sale within 5 calendar days of the date of sale c. Failing to attach a copy of the Temporary identification form on the vehicle d. Failing to correct a returned application for registration within 50 days of the sale date - CORRECT ANSWER a. All of the answers b, c, and d, below" Dealer-wholesale can only sell to _________ - CORRECT ANSWER d. Vehicle dealers" "________ dealers can sell to the general public and dealers - CORRECT ANSWER b. Retail" "dealer application package must include a photograph of the business location. - CORRECT ANSWER True" "are dealer applicants required to obtain a city or county business license in the area where your business is located? - CORRECT ANSWER True" "the licensee is not required to obtain a ficticious name statement from the county where the business is located? - CORRECT ANSWER False" "as part of the application process is a copy of the lease or rental agreement required? - CORRECT ANSWER Yes" "All retail dealer must provide the dmv with a _________ bond - CORRECT ANSWER c. $50,000" "All wholesale dealer must provide the dmv with a _________ bond - CORRECT ANSWER c. $10,000" "Original license fee is? - CORRECT ANSWER c. $175" "Renewal of dealer license and plates are valid for ______ year(s) - CORRECT ANSWER b. 2" "every dealer shall have posted in a place conspicuous to the public the dealer's regular business days and hours - CORRECT ANSWER Yes" "a retail dealer must have an established place of business which has an office and display area situated on the same property? - CORRECT ANSWER True" "wholesalers are required to have posted signage not less than two feet by two feet? - CORRECT ANSWER False" "Car buyer's bill of rights signed into law july 26, 2005 include (circle all) - CORRECT ANSWER b. Two day cooling off period c. Disclosure of credit score e. Optional product and service disclosure" "Retail buyers of vehicles sold for less than ______ must be offered a two day cooling off option - CORRECT ANSWER c. $40,000" "is the two day cooling off period option be a separate document? - CORRECT ANSWER Yes" "The maximum a dealer can charge a customer for a vehicle with a cash price of $5,000 or less is? - CORRECT ANSWER a. $75" "The maximum a dealer can charge a customer for a vehicle with a cash price of $5,001 to $10,000 is? - CORRECT ANSWER b. $150" "The maximum a dealer can charge a customer for a vehicle with a cash price of $10,001 to $30,000 is? - CORRECT ANSWER c. $250" "The maximum a dealer can charge a customer for a vehicle with a cash price of $30,001 to $39,999 is? - CORRECT ANSWER d. Up to $400" "The maximum a dealer can charge a customer for a restocking fee for a vehicle with a cash price of $5,000? - CORRECT ANSWER a. $175" "The maximum a dealer can charge a customer for a restocking fee for a vehicle with a cash price of $5,001 to $10,000? - CORRECT ANSWER b. $350" "The maximum a dealer can charge a customer for a restocking fee for a vehicle with a cash price of $10,001 to $39,999? - CORRECT ANSWER c. $500" "Two day cooling off period signage dimensions should not be less than ______? - CORRECT ANSWER b. 8" x 10"" "the customers bill of rights do not apply to auto brokers and consignment dealers? - CORRECT ANSWER False" "The cap on dealer finance income is limited to? - CORRECT ANSWER b. 2.5% for contracts upto 60 months and 2.0% for contract over 60 months" "dealer may use dealers plates for business and pleasure - CORRECT ANSWER True" "family members may use dealers plates for pleasure - CORRECT ANSWER False" "is a branch location the principal place of business of the dealer? - CORRECT ANSWER No" "dealer plates can be used to deliver a vehicle when the title does not pass to the purchaser until after delivery? - CORRECT ANSWER Yes" "it is unlawful to display a vehicle for sale without a federal trade commissioner's buyers guide? - CORRECT ANSWER True" "Dmv enforcement actions include (circle all correct answers) - CORRECT ANSWER a. Administrative b. Criminal c. Misdemeanor violations d. Civil" "The lemon law is valid during the first _________ months or _____________ miles? - CORRECT ANSWER c. 12 / 12,000" "________ vehicles sold in california generally come with a manufacturer's extended warranty? - CORRECT ANSWER c. New" A national motor vehicle title information system requires which of the following: A) All warranty agreements be sent to DMV B) All vehicles have a Car Fax C) A red warning decal be placed on vehicles with branded titles D) both A and B - CORRECT ANSWER C) A red warning decal be placed on vehicles with branded titles" "If the customer is over charged a DMV fees by the dealer, the dealer must: A) return any excess over $2 to the customer B) return any excess over $5 to the customer C) return any excess fees to the customer D) return all excess fees only if the customer requests - CORRECT ANSWER C) return all excess fees only if the customer requests" "A dealer must report to DMV in writing employment or termination of a salesperson within: A) 5 days B) 10 days C) 15 days D) 20 days - CORRECT ANSWER B) 10 days" "which of the following is not required to transfer a vehicle: A) endorsed certificate of ownership B) a report of prior service records for the vehicle C) odometer mileage reading D) smog certificate - CORRECT ANSWER B) a report of prior service records for the vehicle" "which of the following must sign the certificate of ownership: A) the legal owner B) the registered owner C) the transferee D) all of the above - CORRECT ANSWER D) all of the above" "registration fees are due at the time of retail sale where: A) The registration will expire within 30 days of the date of sale B) The registration has already expired C) registration fees are always due at the time of sale D) both a and b - CORRECT ANSWER D) both a and b" "if the registration of a vehicle expires while a vehicle is in the dealers inventory is the dealer responsible for paying late registration penalties: A) yes B) sometimes C) no - CORRECT ANSWER C) no" "A dealer shall submit a registration application and fees to DMV within how many days of the date of sale: A) 10 B) 20 C) 30 D) 40 - CORRECT ANSWER C) 30" "failure to renew the dealership license by the expiration date results in: A) cancellation of the license after a 30 day extension period B) late penalties if the license is renewed during the 30 day extension period C) forfeiture of bond D) both a and b - CORRECT ANSWER D) both a and b" "all dealers must have a display area except: A) wholesale dealers B) dealers selling electric-powered vehicles C) dealers selling less than 5 vehicles per month D) both b and c - CORRECT ANSWER A) wholesale dealers" "A dealers office must have all of the following except: A) A direct entrance into the office from the exterior of the building B) Must not be temporary or transitory C) Must contain the books and records of the business D) Must be at least 1000 feet from any other auto dealership - CORRECT ANSWER D) must be at least 1000 feet from any other auto dealership" "which of the following are required for dealerships sign? A) each retail dealership must have a sign not less than 2 feet square that can be read from 50 feet away B) each sign must be posted at three locations at the dealership C) each sign must be lighted and/or viewable at night from a distance of 25 feet D) both A and B - CORRECT ANSWER A) each retail dealership must have a sign not less than 2 feet square that can be read from 50 feet away" "A dealer must post which of the following every business location? A) each salesperson's license B) the name and residence address of the individual owner of the dealership C) dealer's license D) both A and C - CORRECT ANSWER D) both A and C" "automatic cancellation of a dealers license will occur upon the happening of which event? A) Failure to maintain adequate bond B) getting sued C) a buyer complaining to DMV about your relationship activities D) both A and C - CORRECT ANSWER A) Failure to maintain adequate bond" "Where can the rules for dealer licensing be found? A) the california penal code B) the california rules of professional conduct C) the public utilities commission D) the california vehicle code - CORRECT ANSWER D) the california vehicle code" "A dealer must disclose which of the following? A) publicly owned vehicles B) rental cars C) taxi cabs D) all of the above - CORRECT ANSWER D) all of the above" "where can a dealer get an emergency supply of report of sales form? A) nowhere. there is no such thing as an emergency supply B) the local DMV C) the state attorney general's office D) the dealer's DMV inspector - CORRECT ANSWER D) the dealer's DMV inspector" "used vehicle dealers must offer which of the following selling vehicles for less than 40,000? A) A contract cancellation agreement allowing the buyer to return the vehicle within 2 days B) A complete inspection of the vehicle and warranty for one year C) A six month service agreement at no charge D) both A and B - CORRECT ANSWER A) A contract cancellation agreement allowing the buyer to return the vehicle within 2 days" "A dealer must: A) Display each salespersons license at the dealership B) employ two or more salespersons per dealership C) register all employees with the DMV D) none of the above - CORRECT ANSWER A) Display each salespersons license at the dealership" With a consignment what must be disclosed to the cosigner (person you sold the car for) within 20 days of sale? - CORRECT ANSWER -Date of sale -Selling price -Amount of the Lien that was paid, if any" "Of the followinh used vehicle sales prices, which would a dealer not be required to offer a contract cancellation option agreement? - CORRECT ANSWER -Anything over $40k" "Your occupational license will be automatically canceled without a hearing if: - CORRECT ANSWER -Your seller's permit is revoked -You have a bond reduction -You take your main sign down and relinquish your office" "What is the maximum markup that dealers may add to a loan for their own profit? - CORRECT ANSWER -2.5% on loans 60 or fewer months, and 2& on loans 60 months or fewer***" "How much is the vehicle transfer fee, on a Californian registered vehicle? - CORRECT ANSWER -$15" "When is a retail dealer required to maintain a vehicle display area? - CORRECT ANSWER -At all times while licensed." "How many hours does a dealer have to notify the advertiser, in writing that a vehicle has been sold or withdrawn? - CORRECT ANSWER -48 Hours" "When is it proper to reset an odometer? - CORRECT ANSWER -Never" "Effectively July 1, 2006, dealers who advertise a vehicle as "certified" will be in violations of the law if the vehicle they are referring to in the ad has the following history: - CORRECT ANSWER -Salvage -Frame Damage" "When you are a dealer selling a car to a retail customer, when is it proper for the dealer to allow the customers to obtain a smog certificate on their own? - CORRECT ANSWER -Never" "If a dealer is suspected of violating the laws that regulate dealers, which of the following actions may be taken against the dealer: - CORRECT ANSWER -Administrative hearing -Possible prosecution by the District Attorney -Civil Action for money damages" "What is the maximum time period a dealer is provided to pay the proceeds of a consignment sale and make an accounting to a cosignor? (person you sold the car for)? - CORRECT ANSWER -20 Days" "What would be an exception to the no cooling off period? - CORRECT ANSWER -In the event of fraud or where the seller agrees to cancel the sale" "What is a conditional sales contract? - CORRECT ANSWER -A contract where the sale is conditioned upon the buyer obtaining financing and where a lien is created" "Which document is used to account for the total cost and terms of payment? - CORRECT ANSWER -THE CONDITIONAL SALES CONTRACT" "When is it proper for a dealer to give a report of sale to another dealer? - CORRECT ANSWER -NEVER" "What is the minimum size for a main sign for a retail dealer? - CORRECT ANSWER -2 SQUARE FEET" "Which of the following things must a RETAIL dealer have ? - CORRECT ANSWER -Sign with the dealership name and address -An office for the use of the dealer -Display area for the display of cars" "If a dealer plans on changing the location of his established place of business, when is he required to notify the DMV? - CORRECT ANSWER -IMMEDIATELY" "When is a dealer, who sells a vehicle that has a title branded SALVAGE or LEMON LAW BUYBACK, required to disclose the status of the title to the retail customer? - CORRECT ANSWER -BEFORE THE SALE OF THE VEHICLE" "Which is the main body of law used to regulate dealers? - CORRECT ANSWER -THE VEHICLE CODE" "What will happen if a dealer unknowingly buys a stolen car? - CORRECT ANSWER -THE DEALER WILL HAVE TO RETURN THE CAR TO THE RIGHTFUL OWNER" "How much is the most that can be charged for a document processing charge? - CORRECT ANSWER -$65 OR $85 DEPENDING ON THE PROCESS USED TO FILE PAPERWORK" "Before you can apply for your dealer license, you need to a get a resale permit (seller's permit) from where? - CORRECT ANSWER -THE STATE BOARD OF EQUALIZATION" "What is required in an auto dealer's advertisement for a vehicle for sale? - CORRECT ANSWER -Make and Model -VIN -Dealership Name" "When is it acceptable to keep excess registration fees paid by the customer? - CORRECT ANSWER -IT IS NEVER ACCEPTABLE TO KEEP EXCESS REGISTRATION FEES" "Which of the following persons must have a salesperson's license at an auto dealership? - CORRECT ANSWER -Salespersons -Sales Managers -Finance Manager" "A Retail Dealer must maintain a bond in the amount of? - CORRECT ANSWER -$50,000" "What is the purpose of Division 12 of the Vehicle Code? - CORRECT ANSWER -REGULATES THE MANNER IN WHICH VEHICLES ARE EQUIPPED FOR SAFE OPERATION" "How many cars can a private individual legally sell per year with the intent to profit? - CORRECT ANSWER -NONE" "Division 12 Safety Requirements may be waived: - CORRECT ANSWER - NEVER" "After selling a vehicle in California, how many days does a dealer have to mail the USED VEHICLE DEALER NOTICE to the DMV? - CORRECT ANSWER -5 DAYS" "After selling a vehicle in California, how many days does a dealer have to submit the report of sale application copy, supporting documents and fees to the DMV? - CORRECT ANSWER -30 DAYS" "What are examples of when a dealer MUST disclose vehicle history in writing? - CORRECT ANSWER -FRAME DAMAGE, SALVAGE TITLE, LEMON LAW BUYBACK, FIRE, FLOOD OR ODOMETER DISCREPANCIES" "Which is a DMV policy, but not an actual law? - CORRECT ANSWER -DEALERS MAY NOT USE HIGHLIGHTER PENS" "If you run out of reports of sales, where can an emergency supply be obtained? - CORRECT ANSWER -CALL YOUR DMV INSPECTOR, FOR AN EMERGENCY SUPPLY" "How much is the Administrative Service Fee (ASF) if a dealer fails to mail the dealer notice portion of the report of sale within 5 days? - CORRECT ANSWER -$5" "What will happen if you fail to renew your dealer license on time and enter the 30-day grace period? - CORRECT ANSWER -YOU WILL KEEP YOU DEALER LICENSE AS LONG AS YOU PAY THE RENEWAL FEE PLUS A $150 PENALTY (100% OF INITIAL APPLICATION) PLUS A PRORATED FINE FOR EACH DEALER PLATE" "If you fail to submit the title, report of sale application copy and supporting documents to the DMV within fifty days you sell a car, how much of an administrative service fee will you be charged? - CORRECT ANSWER -$25" "In order to be an Auto Broker you must be licensed as a: - CORRECT ANSWER -DEALER" "The maximum fee allowed for documentation preparation is: a. $10 b. $25 c. $30 d. $65 - CORRECT ANSWER d. $65" "The maximum fee allowed for smog is: a. $15 b. $20 c. $30 d. $50 - CORRECT ANSWER d. $50" "How many days does used vehicle dealer have to COMPLETE APPLICATION complete application to the department from the date of sale? a. 50 b. 30 c. 60 d. 20 - CORRECT ANSWER b. 30" "How many days does used vehicle dealer have to CLEAR APPLICATION to the department from the date of sale? a. 20 b. 30 c. 50 d. 60 - CORRECT ANSWER c. 50" "All deals negotiated in Spanish require the dealer to provide a spanish language contract. a. True B. False - CORRECT ANSWER a. True" "In advertising, a dealer must identify his herself by: a. Slogan name or Business License Name b. License number c. Address - CORRECT ANSWER a. Slogan name or Business License Name" "When a vehicle is sold prior to the expiration of the ad, the dealer has 48 hours to request (IN WRITING) withdrawal of the vehicle ad or overprint the word "SOLD" over particular vehicle. a. True b. False - CORRECT ANSWER a. True" "When Advertising, which of the following does the Dealer not have to disclose? a. Vehicle Identification Number or License number b. Total price c. Statement "not including taxes, doc & smog fees, registration & CA tire fee d. Color - CORRECT ANSWER d. Color" "It is unlawful to violate any law prohibiting Bait and Switching Advertising: the practice of advertising a low price with the intent to switch the consumer to a higher priced vehicle. a. True b. False - CORRECT ANSWER a. True" "If the mileage exceed the mechanical function of the odometer and goes over 100,000 miles, this means that the odometer cannot register the actual mileage. You must: a. Reset it b. Replace it c. Leave it and sell it with the vehicle "As Is" d. You must disclose this with the purchaser - CORRECT ANSWER d. You must disclose this with the purchaser" "Is it illegal to tamper with the odometer, disconnect, reset or rollback, etc. a. True b. False - CORRECT ANSWER True" "Prior history disclosure is required in writing that states if a vehicle is which of the following: a. Rental Vehicle b. Taxi cab c. Insurance Salvage vehicle d. Former public vehicle e. All of the above - CORRECT ANSWER d. All of the above" "An unwind usually results from the dealer's failure to obtain financing for the customer from a lending institution. a. True b. False - CORRECT ANSWER A. true" "If the purchaser overpays the dealer an amount for the licensing or transfer of the title of vehicle other than actual amount due, the dealer may: a. Keep the overpayment as part of down payment b. Dealer may never keep overpayment and must return it to customer - CORRECT ANSWER b. Dealer may never keep overpayment and must return it to customer" "The Federal Buyers Guide must be displayed on the side windows of the vehicle so that both sides of the label can be read. It must be signed on the back by the customer. a. True b. False - CORRECT ANSWER a. True" "What is it most that a dealer can charge customer for smog fee and smog certificate? a. $25 b. $35 c. $45 d. $50 - CORRECT ANSWER d. $50" "The Report of Sales Book is provided by the DMV and is the property of the dealer. a. True b. False - CORRECT ANSWER b. False" "After a hearing, the department May revoke and/or suspend a dealers license if they have a. Wrote the department a check with insufficient funds at the bank b. knowingly permits someone to illegally use their special plates c. fall asleep or wrong information on the registration of a vehicle d. All of the above - CORRECT ANSWER d. All of the above" "When a dealer runs out of ROS and needs emergency supplies, where does he/ she get them from? a. Another dealer b. DMV Sacramento c. Occupational Licensing Inspector - CORRECT ANSWER c. Occupational Licensing Inspector" "Which are true regarding the dealer Special Plates? a. Dealer can use the SPecial Plates to go on vacation b. Prospective customer can use Special Plates for "Test Drive" for up to 7 days c. All of the above - CORRECT ANSWER c. All of the above" "When test driving the vehicle, what is the proper placement of the Special Plates? a. In the rear window b. In lower right corner of front window c. Mounted on the back rear of vehicle - CORRECT ANSWER c. Mounted on the back rear of vehicle" "The employee can use the Special Plates to visit a sick friend. a. True b. False - CORRECT ANSWER b. False" "How much is the bond that the dealer must have prior to the issuance of its Dealer License? a. $10,000 b. $50,000 c. $15,000 d. $20,000 - CORRECT ANSWER b. $50,000" "A dealer may obtain a branch location outside his established place of business. How many display places for vehicles does he need to maintain branch location. a. 4 b. 5 c. 2 - CORRECT ANSWER c. 2" "You have passed the inspection and are ready to sell vehicles. Which of the following are true regarding your established place of business? a. The display area must be clearly for the exclusive use of the Dealer for display purposes only even if you have no vehicles on the lot b. The dealer must erect permanent signs at each location that can withstand climatic effects and be readable within 50 feet. c. The sign must have an area of not less than 2 square feet per side displayed and contain lettering not less than 6 inches in size. d. All of the above - CORRECT ANSWER d. All of the above" "How many days does the dealer to report to the DMV the employment or termination of an employee? a. 10 days b. 5 days c. 15 days d. 20 days - CORRECT ANSWER a. 10 days" "On a consignment, how many days after the date of sale does the dealer have to make account of all transactions and pay the agreed amount to consignor? a. 5 days b. 10 days c. 15 days d. 20 days - CORRECT ANSWER d. 20 days" The National Motor Vehicle Title Information System requires which of the following? a. All warranty agreements be sent to DMV b. All vehicles have a Car Fax c. A red warning decal be placed on vehicles with branded titles d. Both A and B - CORRECT ANSWER c. A red warning decal be placed on vehicles with branded titles" "When a dealer sells a vehicle that was consigned to them to sell, they must: a. Provide the seller an accounting and payment within 20 days of the sale b. Test drive it before agreeing to sell it c. Provide a warranty d. None of the above - CORRECT ANSWER a. Provide the seller an accounting and payment within 29 days of the sale." "Which of the following are permitted methods for computing interest rate? a. The Pre-Computed Basis Method b. The Simple Interest Basis Method c. The Friedman Method d. Both A and B - CORRECT ANSWER d. Both A and B" "What is the maximum a dealer may charge a customer for a smog test? - CORRECT ANSWER $50.00" "What is the basic DMV transfer fee to transfer the title into the buyer's name? - CORRECT ANSWER $15.00" "If the buyer defaults on a Conditional Sales Contract, the dealer may, subject to proper notification to the buyer: a. Accelerate the amount do b. Repossess vehicle c. Sell the vehicle d. All of the above - CORRECT ANSWER d. All of the above" "Which of the following are taxable in a vehicle sales transaction? a. Document preparation fee b. $50 smog fee paid to seller/dealer c. Both A and B d. Insurance fees - CORRECT ANSWER c. Both A and B" "Buy Here Pay Here (self-financing) Dealers must: a. Charge interest rates that are less than 20% above prime rate b. Offer 30 day, or 1,000 mile warranties, and put FMV notices on their vehicles c. Send 50% of all interest charged to DMV d. Finance all vehicles sold for more than $50,000 - CORRECT ANSWER b. Offer a 30 day, or 1,000 mile warranties, and put FMV notices on their vehicles" "Which of the following is required Safety Equipment item? a. Padded dashboards b. Smog Equipment c. Door locks d. Reclining seatbacks - CORRECT ANSWER b. Smog Equipment" "Advertisements must identify the dealer by which of the following? a. Phone number b. The dealership name c. "dlr" d. "Dealer" - CORRECT ANSWER b. The dealership name" "If a a vehicle has been sold, any advertising on that vehicle must be withdrawn within how long? - CORRECT ANSWER 48 hours" "If a dealer buys a vehicle with an odometer that is not working the dealer must: a. Tell the buyer that the odometer is broken b. Repair the odometer before selling the vehicle c Sign a declaration the odometer is not operating to be filed with the DMV d. Do nothing - CORRECT ANSWER b. Repair the odometer before selling the vehicle" "Where the dealer repairs an odometer, and the odometer is incapable of registering the same mileage as before service, the dealer must: a. Set the odometer to zero b. Attach a written notice to the left doorframe specifying the previous mileage and date of repair c. Estimate mileage and set the odometer to the mileage d. Both A and B - CORRECT ANSWER d. Both A and B" "Is it ever legal for a dealer to reset, or "roll bak" an odometer to show less that the actual mileage? - CORRECT ANSWER NO" "A dealer shall submit a registration application and fees to DMV within how many days of the date of sale? - CORRECT ANSWER 30 days" "Why is an Administrative Service Fee is imposed? - CORRECT ANSWER Failing to notify DMV of a sale within 5 calendar days of the date of sale. Failing to attach a copy of the Temporary Identification Form on the vehicle. Failing to correct a returned application for registration within 50 days of the sale date." "California registration fees are not due if the buyer is not from California, the vehicle will not be registered in California, and what other circumstance? - CORRECT ANSWER The vehicle is driven only outside of California after the sale by the buyer with a DMV One Trip Permit." "When is a branch license required? - CORRECT ANSWER When vehicles are ACTUALLY SOLD at a permanent location beyond 1000 ft from the dealer's main location." "Special Plates may property be used: a. On a dealer's work or service vehicle routinely used to get parts or to service vehicles b. By employees during the course and scope of their employment c. By a prospective customer for 30 days - CORRECT ANSWER b. By employees during the course and cope of their empoyment" "Which of the following is a correct statement concerning the use of special plates? a. Special plates do not require a copy of their registration certificates to be kept with them. b. Special plates may be used for towing or transporting other vehicles in limited circumstances. c. Special plates may be used on a vehicle by a buyer after the buyer has purchased and taken deliver of a vehicle. - CORRECT ANSWER b." "A dealer must not: a. Lend a special plate, or dealership license to another person to engage in the purchase or sale of vehicles. b. Employ unlicensed salespersons c. Pay "Bird Dog" fees to any unlicensed person to obtain sales. d. All of the above - CORRECT ANSWER d." "Who is required to have a salesperson license? - CORRECT ANSWER All managers" "When does a vehicle not require a smog inspection? - CORRECT ANSWER The vehicle is sold at wholesale between dealers." "What is the maximum a dealer may charge a buyer for smog testing a vehicle? - CORRECT ANSWER $50.00" "Within how many days must a dealer provide DMV the "Used Vehicle Dealer Notice"? - CORRECT ANSWER 5 days" "Within how many days must a dealer submit an application for registration or transfer of registration of a vehicle? - CORRECT ANSWER 30 days" "To obtain a dealer license, you must obtain a surety bond for what amount? - CORRECT ANSWER $50,000" "How long is an occupational license valid for? - CORRECT ANSWER 2 years" "Failure to renew the dealership license by the expiration date results in: - CORRECT ANSWER Cancellations of the license after a 30 day extension period AND late penalties if the license is renewed during the 30 day extension period." "All dealers must have a display area except: - CORRECT ANSWER Wholesale dealers" "A dealer's office must have all of the following characteristics EXCEPT: a. A direct entrance into the office from the exterior of the building b. Must not be temporary or transitory c. Must contain the books and records of the business d. Must be at least 1000 feet from any other auto dealership - CORRECT ANSWER d. Must be at least 1000 feet from any other auto dealership" "Automatic cancellation of a dealer's license will occur upon the happening of which event? a. Failure to maintain adequate bond. b. Getting sued c. A buyer complaining to DMV about your dealership activities d. Both A and C - CORRECT ANSWER Failure to maintain adequate bond" "What must the dealer attach to every used vehicle offered for sale? - CORRECT ANSWER Federal Trade Commission Buyers Guide" "Where can the rules for dealer licensing be found? - CORRECT ANSWER The California Vehicle Code" "What must a dealer disclose before a sale? - CORRECT ANSWER Publicly owner vehicles Rental cars Taxi cabs" "Where can a dealer get an emergency supply of Report of Sale forms? - CORRECT ANSWER The dealer's DMV INSPECTOR" "What must a dealer do when selling a Lemon Law Buyback vehicle? - CORRECT ANSWER Provide the buyer a disclosure statement to be signed by the buyer AND Affix a decal to the left front doorframe inscribing "Lemon Law Buyback"" "What must a dealer offer a customer when selling vehicles for less than $40,000.00? - CORRECT ANSWER Contract Cancellation agreement allowing the buyer to return the vehicle within 2 days." "A dealer must: a. Display each salesperson license at the dealership b. Employ two or more salespersons per dealership c. Register all employees with DMV d. None of the above - CORRECT ANSWER a. Display each salesperson license at the dealership" "How many vehicles can a private party buy and sell for profit in a year without a dealer license? - CORRECT ANSWER ZERO" The national Motor Vehicle Title information System requires which of the following? a. All warranty agreements be sent to DMV b. All vehicles have a Car Fax c. A red warning decal be placed on vehicles with branded titles d. Both A & B - CORRECT ANSWER c. A red warning decal be placed on vehicles with branded titles" "when a dealer sells a vehicle that was consigned to them to sell, they must a. Provide the seller an accounting and payment within 20 days of the sale b. Test drive it before agreeing to sell it c. Provide a warranty d. None of the above - CORRECT ANSWER a. provide the seller an accounting and payment within 20 days of the sale" "Which of he following are permitted methods for computing interest rates a. The pre-computed Basis method b. The simple Interest basis method c. The Friedman Method d. Both A & B - CORRECT ANSWER d. Both A & B" "If the buyer defaults on a conditional sales contract, the dealer may, subject to proper notification to the buyer a. Accelerate amount due b. Repossess vehicle c. Sell vehicle d. All of the above - CORRECT ANSWER d. All of the above" "Which of the following are taxable in a vehicle sales transaction? a. document preparation fee b. $50 Smog fee paid to the seller/dealer c. Both A & B d. Insurance fees - CORRECT ANSWER c. Both A & B" "Which of the following are not taxable in a vehicle sales transaction? a. Finance Charges b. Insurance charges c. Smog certificate fee (paid to the state) d. All of the above - CORRECT ANSWER d. All of the above" "Buy here pay here (self-financing) dealers must: a. Charge interest rates that are 20% less than 20% above prime rate b. Offer 30 day or 1,000 mile warranties, and put fair market value notices on their vehicles c. send 50% of all interest charged to DMV d. Finance all vehicles sold for more than $50,000 - CORRECT ANSWER b. Offer 30 day or 1,000 mile warranties, and put fair market value notices on their vehicles" "Which of the following is a required safety equipment item a. Padded dashboards b. Smog Equipment c. Door Locks d. Reclining Seatbacks - CORRECT ANSWER b. Smog Equipment" "Advertisements must identify the dealer by which of the following a. Phone number b. The dealership name c. "dlr" d. "Dealer" - CORRECT ANSWER b. The dealership name" "If a vehicle has been sold, any advertising on that vehicle must be withdrawn within: a. 12 hours b. 48 hours c. 36 hours d. One Week - CORRECT ANSWER b. 48 hours" "If a dealer buys a vehicle with an odometer that is not working, the dealer must a. Tell the buyer that the odometer is broken b. Repair the odometer before selling the vehicle c. Sign a declaration the odometer is not operating to be filed with DMV d. Do nothing - CORRECT ANSWER b. Repair the odometer before selling the vehicle" "Where the dealer repairs an odometer, and the odometer is incapable of registering the same mileage as before service, the dealer must: a. Set the odometer to 0 b. Attach a written notice to the left doorframe specifying the previous mileage and date of repair c. Estimate mileage and set the odometer to that mileage d. Both A & B - CORRECT ANSWER d. Both A & B" "Is it ever legal for a dealer to reset, or "roll back" an odometer to show less than the actual mileage? a. Yes if the dealer tells the buyer how much he rolled back the odometer b. Yes if the dealer puts the original mileage in writing on the contract c. Yes if the dealer asks the buyer if it is okay with them to do the roll back d. No - CORRECT ANSWER d. No" "DMV requires special plates (dealer plates) be placed where on the vehicle? a. On the dashboard b. In the rear window c. In the rear, over the existing license plate d. On the trunk, or hanging off the bumper - CORRECT ANSWER c. In the rear, over the existing license plate" "Auto brokers must do which of the following a. Limit deposits to 2.5% of the purchase price, and all deposits in a separate trust account b. Use any deposits received to pay the broker - CORRECT ANSWER a. Limit deposits to 2.5% of the purchase price, and all deposits in a separate trust account" "Which of the following is not required to transfer a vehicle a. Endorsed Certificate of Ownership b. A report of prior service records for the vehicle since new c. Odometer mileage reading d. Smog Certificate - CORRECT ANSWER b. A report of prior service records for the vehicle since new" "Which of the following must sign the Certificate of Ownership? a. The legal owner b. The registered owner c. The transferee d. All of the above - CORRECT ANSWER d. All of the above" "Registration fees are due at the time of the retail sale where a. The registration will expire within 30 days of the date of sale b. The registration has already expired c. Registration fees are always due at the time of sale d. Both A & B - CORRECT ANSWER d. Both A & B" "If the registration of a vehicle expires while a vehicle is in the dealer's inventory, is the dealer responsible for paying late registration penalties a. Yes b. Sometimes c. No - CORRECT ANSWER c. No" "A dealer shall submit a registration application and fees to DMV within how many days of the date of sale? a. 10 b. 20 c. 30 d. 40 - CORRECT ANSWER c. 30" "A dealer plate may be used by: A) A service manager taking a child to the dentist B) The son of a dealer taking a behind the wheel test at DMV C) The spouse of a dealer, not on the license, taking children to school D) A prospective customer taking a sales test drive - CORRECT ANSWER D) A prospective customer taking a sales test drive" "When a dealer sells a consigned vehicle, the consign or must be paid the agreed upon amount within: A) 10 days B) 20 days C) 30 days D) 40 days - CORRECT ANSWER B) 20 days" "The maximum a dealer may charge a customer for a smog test is: A) $8.00 B) $12.00 C) $50.00 D) $45.00 - CORRECT ANSWER C) $50.00" "When a dealer sells a vehicle that was consigned to them to sell, they must: A) provide the seller an accounting and payment within 20 days of the sale date B) Test drives it before agreeing to sell it C) provide a warranty D) none of the above - CORRECT ANSWER A) provide the seller an accounting and payment within 20 days of the sale date" "The basic DMV transfer fee to transfer the title into the buyers name is: A) $15.00 B) $12.00 C) $80.00 D) $25.00 - CORRECT ANSWER A) $15.00" "Which of the following are not taxable in a vehicle sales transaction? A) Finance Charges B) Insurance charges C) Smog certificate fee (paid to state) D) all of the above - CORRECT ANSWER D) all of the above" "Which of the following is a required safety equipment item? A) Padded Dashboards B) Smog equipment C) door locks D) reclining seats - CORRECT ANSWER B) smog equipment" "Dealer records and supplies must be maintained: A) At the owner's home B) At the dealer's place of of business C) In a briefcase D) In the trunk of a vehicle in dealer inventory - CORRECT ANSWER B) At the dealer's place of of business" "If a dealer fails to renew the dealer bond, which of the following will happen: A) The dealer will be given 30 days to obtain another bond B) The dealer license will be canceled on the date of the expiration of the bond C) The dealer supplies will be picked up by the DMV and held until a new bond is obtained D) the dealer will need to obtain a bond rider - CORRECT ANSWER B) The dealer license will be canceled on the date of the expiration of the bond" "Licensing requirements for dealers in california are found in: A) The business and professions code B) The health and safety code C) The penal code D) the vehicle code - CORRECT ANSWER D) the vehicle code" "It is legal to reset the odometer reading on a vehicle: A) if you can make more money B) if you place additional miles on the odometer C) it is never legal to reset the odometer reading D) if you don't know the true mileage - CORRECT ANSWER C) it is never legal to rest the odometer reading" "If a dealer sells a vehicle, and registration fees are not due, the transfer of ownership must be submitted to DMV within: A) 30 days B) 40 days C) 50 days D) 90 days - CORRECT ANSWER A) 30 days" "if an advertised vehicle is sold, the advertisement must be withdrawn, in writing within: A) 24 hours B) 36 hours C) 48 hours D) 72 hours - CORRECT ANSWER C) 48 hours" "When is a branch license required? A) When the dealer displays vehicles at a fair or exposition and no sales are solicited at the location B) when vehicles are sold more than 1000 feet from the dealership office C) when the dealer sells cars to be registered only out of state D) both a and b - CORRECT ANSWER B) when vehicles are sold more than 1000 feet from the dealership office" "Special plates me probably be used: A) on a dealers work or service vehicle routinely used to get parts or to service vehicles B) by employees during the course and scope of their employment C) by a prospective customer for 30 days D) Why a family member of the dealer for personal use - CORRECT ANSWER B) by employees during the course and scope of their employment" "A dealer must not: A) lend a special plate or dealership license to another person to engage in the purchase or sale of vehicles B) employee unlicensed salespersons C) pay "bird dog" fees to any unlicensed person to obtain sales D) all of the above - CORRECT ANSWER D) all of the above" "which of the following is required to have a salespersons license: A) sales manager B) secretary C) Finance manager D) both a and c - CORRECT ANSWER D) both a and c" "A vehicle does not require a smog inspection when: A) The vehicle was constructed during the 1990s B) The buyer waives the inspection C) The vehicle is sold at wholesale between dealers D) both a and c - CORRECT ANSWER C) The vehicle is sold at wholesale between dealers" "The maximum a dealer may charge a buyer for smog testing a vehicle is: A) $25 B) $30 C) $45, minus the cost of the certificate D) $50, plus the cost of the certificate - CORRECT ANSWER D) $50, plus the cost of the certificate" "A dealer must submit an application for registration or transfer of registration of a vehicle within how many calendar days of the date of sale? A) 5 B) 10 C) 20 D) 30 - CORRECT ANSWER D) 30" "to obtain a dealers license to sell used vehicle to the public, you must obtain a bond in the amount of? A) $5000 B) $15000 C) $25000 D) $50000 - CORRECT ANSWER D) $50000"