AFIP Certification Exam Study Guide: Comprehensive Automotive F&I
Compliance Summary & Practice Questions Georgian College
law
evaluates a candidate's mastery of federal and state regulations
governing automotive retail financial services. The curriculum tests core
compliance competencies, including the Truth in Lending Act (Regulation
Z), the Fair Credit Reporting Act, and identity theft prevention rules like
the Red Flags Rule. Mastering these legal and ethical frameworks ensures
finance and insurance (F&I) managers can protect dealership integrity,
mitigate legal liabilities, and maintain industry-standard compliance.
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
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
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
Compliance Summary & Practice Questions Georgian College
law
evaluates a candidate's mastery of federal and state regulations
governing automotive retail financial services. The curriculum tests core
compliance competencies, including the Truth in Lending Act (Regulation
Z), the Fair Credit Reporting Act, and identity theft prevention rules like
the Red Flags Rule. Mastering these legal and ethical frameworks ensures
finance and insurance (F&I) managers can protect dealership integrity,
mitigate legal liabilities, and maintain industry-standard compliance.
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
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
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
