California Dealer Test with Complete Questions
and Correct Verified Answers (Detailed
Answers) Already Graded A+ 100% Guaranteed
to Pass Concepts
Section 1: Dealer Licensing & Regulations
1. What is the primary purpose of the California Vehicle Code (CVC) Section 11700 et seq.?
A. To regulate vehicle manufacturing standards.
B. To define and regulate the licensing of vehicle dealers and salespersons.
C. To set national fuel efficiency standards.
D. To establish rules for commercial trucking.
Answer: B. To define and regulate the licensing of vehicle dealers and salespersons. ✓
2. A "Dealer" is defined as a person who, for commission or profit, does what?
A. Only repairs motor vehicles.
B. Manufactures new vehicles.
C. Sells, exchanges, buys, or offers for sale more than 4 vehicles in a 12-month period.
D. Sells only their own personal vehicles.
Answer: C. Sells, exchanges, buys, or offers for sale more than 4 vehicles in a 12-month
period. ✓
3. A "Salesperson" is defined as a person who is licensed and employed by a dealer to do
what?
A. Service and repair vehicles.
B. Negotiate and conduct vehicle sales for the dealer.
C. Manage the dealership's finances.
D. Transport vehicles between auctions.
Answer: B. Negotiate and conduct vehicle sales for the dealer. ✓
4. What is the maximum number of vehicles a person can sell in a 12-month period without
being licensed as a dealer?
A. 2 vehicles
B. 4 vehicles
C. 6 vehicles
,D. 8 vehicles
Answer: B. 4 vehicles ✓
5. A dealer's place of business must have all of the following EXCEPT:
A. A permanent, enclosed building.
B. A clearly visible sign with the business name.
C. A dedicated service and repair bay.
D. Proper zoning approval for a dealership.
Answer: C. A dedicated service and repair bay. ✓
6. A Salesperson's license allows the holder to work:
A. For any dealer in the state simultaneously.
B. Only for the specific dealer reported to the DMV.
C. As an independent broker without a dealer.
D. For private individuals selling their own cars.
Answer: B. Only for the specific dealer reported to the DMV. ✓
7. What is the purpose of a dealer's bond?
A. To pay for employee health insurance.
B. To protect the public from financial loss due to the dealer's illegal acts.
C. To insure the dealer's vehicle inventory against theft.
D. To guarantee the dealer's advertising budget.
Answer: B. To protect the public from financial loss due to the dealer's illegal acts. ✓
8. A licensed dealer is required to keep all records of vehicle transactions for a minimum of:
A. 1 year
B. 3 years
C. 5 years
D. 7 years
Answer: B. 3 years ✓
9. A "Wholesale-only dealer" primarily sells vehicles to:
A. The general public.
B. Other licensed dealers.
C. Foreign buyers.
D. Government agencies.
Answer: B. Other licensed dealers. ✓
10. What happens if a dealer's license is suspended or revoked?
A. The dealer can continue selling vehicles under a probationary period.
,B. The dealer must immediately cease all vehicle sales activity.
C. Only the salesperson licenses are affected.
D. The dealer can only sell vehicles at wholesale.
Answer: B. The dealer must immediately cease all vehicle sales activity. ✓
Section 2: Salesperson & Dealer Obligations
11. A salesperson's license must be prominently displayed:
A. At their home office.
B. In their personal vehicle.
C. At the dealer's place of business.
D. It does not need to be displayed.
Answer: C. At the dealer's place of business. ✓
12. A salesperson is considered to be acting as an agent for:
A. Themselves.
B. The vehicle's buyer.
C. The vehicle's manufacturer.
D. The employing dealer.
Answer: D. The employing dealer. ✓
13. If a salesperson is terminated from a dealership, the dealer must notify the DMV within:
A. 5 days
B. 10 days
C. 30 days
D. 90 days
Answer: A. 5 days ✓
14. It is illegal for a dealer to employ a person to sell vehicles if that person:
A. Has no prior sales experience.
B. Does not have a valid salesperson's license.
C. Is under the age of 21.
D. Works on a part-time basis.
Answer: B. Does not have a valid salesperson's license. ✓
15. A dealer is responsible for the acts of its salespersons:
A. Only if the dealer personally authorized the act.
B. Only for acts occurring on the dealership lot.
C. While the salespersons are acting within the scope of their employment.
, D. The dealer is never responsible for a salesperson's actions.
Answer: C. While the salespersons are acting within the scope of their employment. ✓
Section 3: Advertising & Sales Practices
16. The "Code of Federal Regulations (CFR) - 16 Part 455" is commonly known as the:
A. Used Car Rule.
B. New Car Warranty Act.
C. Clean Air Act.
D. Truth in Lending Act.
Answer: A. Used Car Rule. ✓
17. The Used Car Rule requires dealers to post a "Buyers Guide" on which vehicles?
A. All new vehicles.
B. All used vehicles offered for sale.
C. Only used vehicles sold "as-is."
D. Only used vehicles over 10 years old.
Answer: B. All used vehicles offered for sale. ✓
18. What information must be on the Buyers Guide?
A. The vehicle's previous owner's name.
B. Whether the vehicle is offered with a warranty or "as-is."
C. The dealer's cost for the vehicle.
D. The maximum possible profit on the sale.
Answer: B. Whether the vehicle is offered with a warranty or "as-is." ✓
19. When a vehicle is sold "As-Is," it means:
A. The dealer must pay for any repairs needed after the sale.
B. The dealer provides a 30-day limited warranty.
C. The buyer pays for all repairs after the sale.
D. The manufacturer's warranty is still valid.
Answer: C. The buyer pays for all repairs after the sale. ✓
20. The Buyers Guide becomes a part of the sales contract and overrides any contrary
provisions:
A. Only if the buyer requests it.
B. Never; the contract always overrides the guide.
C. Only for vehicles under $5,000.
D. Yes, it becomes a binding part of the contract.
Answer: D. Yes, it becomes a binding part of the contract. ✓
and Correct Verified Answers (Detailed
Answers) Already Graded A+ 100% Guaranteed
to Pass Concepts
Section 1: Dealer Licensing & Regulations
1. What is the primary purpose of the California Vehicle Code (CVC) Section 11700 et seq.?
A. To regulate vehicle manufacturing standards.
B. To define and regulate the licensing of vehicle dealers and salespersons.
C. To set national fuel efficiency standards.
D. To establish rules for commercial trucking.
Answer: B. To define and regulate the licensing of vehicle dealers and salespersons. ✓
2. A "Dealer" is defined as a person who, for commission or profit, does what?
A. Only repairs motor vehicles.
B. Manufactures new vehicles.
C. Sells, exchanges, buys, or offers for sale more than 4 vehicles in a 12-month period.
D. Sells only their own personal vehicles.
Answer: C. Sells, exchanges, buys, or offers for sale more than 4 vehicles in a 12-month
period. ✓
3. A "Salesperson" is defined as a person who is licensed and employed by a dealer to do
what?
A. Service and repair vehicles.
B. Negotiate and conduct vehicle sales for the dealer.
C. Manage the dealership's finances.
D. Transport vehicles between auctions.
Answer: B. Negotiate and conduct vehicle sales for the dealer. ✓
4. What is the maximum number of vehicles a person can sell in a 12-month period without
being licensed as a dealer?
A. 2 vehicles
B. 4 vehicles
C. 6 vehicles
,D. 8 vehicles
Answer: B. 4 vehicles ✓
5. A dealer's place of business must have all of the following EXCEPT:
A. A permanent, enclosed building.
B. A clearly visible sign with the business name.
C. A dedicated service and repair bay.
D. Proper zoning approval for a dealership.
Answer: C. A dedicated service and repair bay. ✓
6. A Salesperson's license allows the holder to work:
A. For any dealer in the state simultaneously.
B. Only for the specific dealer reported to the DMV.
C. As an independent broker without a dealer.
D. For private individuals selling their own cars.
Answer: B. Only for the specific dealer reported to the DMV. ✓
7. What is the purpose of a dealer's bond?
A. To pay for employee health insurance.
B. To protect the public from financial loss due to the dealer's illegal acts.
C. To insure the dealer's vehicle inventory against theft.
D. To guarantee the dealer's advertising budget.
Answer: B. To protect the public from financial loss due to the dealer's illegal acts. ✓
8. A licensed dealer is required to keep all records of vehicle transactions for a minimum of:
A. 1 year
B. 3 years
C. 5 years
D. 7 years
Answer: B. 3 years ✓
9. A "Wholesale-only dealer" primarily sells vehicles to:
A. The general public.
B. Other licensed dealers.
C. Foreign buyers.
D. Government agencies.
Answer: B. Other licensed dealers. ✓
10. What happens if a dealer's license is suspended or revoked?
A. The dealer can continue selling vehicles under a probationary period.
,B. The dealer must immediately cease all vehicle sales activity.
C. Only the salesperson licenses are affected.
D. The dealer can only sell vehicles at wholesale.
Answer: B. The dealer must immediately cease all vehicle sales activity. ✓
Section 2: Salesperson & Dealer Obligations
11. A salesperson's license must be prominently displayed:
A. At their home office.
B. In their personal vehicle.
C. At the dealer's place of business.
D. It does not need to be displayed.
Answer: C. At the dealer's place of business. ✓
12. A salesperson is considered to be acting as an agent for:
A. Themselves.
B. The vehicle's buyer.
C. The vehicle's manufacturer.
D. The employing dealer.
Answer: D. The employing dealer. ✓
13. If a salesperson is terminated from a dealership, the dealer must notify the DMV within:
A. 5 days
B. 10 days
C. 30 days
D. 90 days
Answer: A. 5 days ✓
14. It is illegal for a dealer to employ a person to sell vehicles if that person:
A. Has no prior sales experience.
B. Does not have a valid salesperson's license.
C. Is under the age of 21.
D. Works on a part-time basis.
Answer: B. Does not have a valid salesperson's license. ✓
15. A dealer is responsible for the acts of its salespersons:
A. Only if the dealer personally authorized the act.
B. Only for acts occurring on the dealership lot.
C. While the salespersons are acting within the scope of their employment.
, D. The dealer is never responsible for a salesperson's actions.
Answer: C. While the salespersons are acting within the scope of their employment. ✓
Section 3: Advertising & Sales Practices
16. The "Code of Federal Regulations (CFR) - 16 Part 455" is commonly known as the:
A. Used Car Rule.
B. New Car Warranty Act.
C. Clean Air Act.
D. Truth in Lending Act.
Answer: A. Used Car Rule. ✓
17. The Used Car Rule requires dealers to post a "Buyers Guide" on which vehicles?
A. All new vehicles.
B. All used vehicles offered for sale.
C. Only used vehicles sold "as-is."
D. Only used vehicles over 10 years old.
Answer: B. All used vehicles offered for sale. ✓
18. What information must be on the Buyers Guide?
A. The vehicle's previous owner's name.
B. Whether the vehicle is offered with a warranty or "as-is."
C. The dealer's cost for the vehicle.
D. The maximum possible profit on the sale.
Answer: B. Whether the vehicle is offered with a warranty or "as-is." ✓
19. When a vehicle is sold "As-Is," it means:
A. The dealer must pay for any repairs needed after the sale.
B. The dealer provides a 30-day limited warranty.
C. The buyer pays for all repairs after the sale.
D. The manufacturer's warranty is still valid.
Answer: C. The buyer pays for all repairs after the sale. ✓
20. The Buyers Guide becomes a part of the sales contract and overrides any contrary
provisions:
A. Only if the buyer requests it.
B. Never; the contract always overrides the guide.
C. Only for vehicles under $5,000.
D. Yes, it becomes a binding part of the contract.
Answer: D. Yes, it becomes a binding part of the contract. ✓
