ITD Dealer License Ultimate Exam
**Question 1. Which Idaho Dealer License class authorizes the sale of both new and used motor
vehicles?**
A) Wholesale-only license
B) Retail license
C) Manufacturer license
D) Utility trailer license
Answer: B
Explanation: A retail license permits a dealer to sell both new and used vehicles to the public, while a
wholesale-only license limits sales to other dealers.
**Question 2. A dealer who wishes to sell only motorcycles must obtain which specific license?**
A) Retail vehicle license
B) Motorcycle dealer license
C) ATV dealer license
D) Snowmobile dealer license
Answer: B
Explanation: Idaho requires a separate motorcycle dealer license for those who sell motorcycles
exclusively; other vehicle licenses do not cover motorcycles.
**Question 3. Which of the following is NOT a required component of the application for any Idaho
dealer license?**
A) Federal Employer Identification Number (EIN)
B) Seller’s Permit from the Idaho Tax Commission
C) Proof of automobile insurance covering the dealership lot
D) Personal background check for owners/officers
Answer: C
Explanation: While insurance is advisable, the Idaho dealer application does not mandate proof of
general automobile insurance; the other three items are mandatory.
**Question 4. The Idaho Consumer Asset Recovery (ICAR) Fund primarily serves what purpose?**
, ITD Dealer License Ultimate Exam
A) Provides financing for dealer inventory
B) Assists consumers in recovering losses from dealer fraud
C) Funds the state’s vehicle inspection program
D) Covers dealer liability for warranty claims
Answer: B
Explanation: The ICAR Fund is a consumer protection mechanism that reimburses buyers who suffer
losses due to dealer misconduct.
**Question 5. What is the minimum surety bond amount required for a wholesale-only dealer license in
Idaho?**
A) $10,000
B) $20,000
C) $30,000
D) $40,000
Answer: D
Explanation: Idaho mandates a $40,000 bond for wholesale-only dealers, whereas the retail bond is
$20,000.
**Question 6. Under Idaho law, a dealer may operate without posting a bond if they have been
continuously licensed for how many years?**
A) One year
B) Two years
C) Three years
D) Five years
Answer: C
Explanation: The “three-year rule” allows a dealer to forgo a bond after three consecutive years of
compliance and good standing.
**Question 7. Which of the following physical locations is prohibited for an Idaho dealer’s primary place
of business?**
A) Stand-alone commercial building
, ITD Dealer License Ultimate Exam
B) Industrial park warehouse
C) Residential single-family home
D) Mixed-use commercial-residential building
Answer: C
Explanation: Idaho law expressly forbids using a residential single-family dwelling as a dealer’s primary
business location.
**Question 8. The minimum required size for an exterior dealer sign in Idaho is:**
A) 12 square feet
B) 18 square feet
C) 24 square feet
D) 30 square feet
Answer: C
Explanation: Idaho mandates a minimum of 24 sq ft for exterior signage to ensure adequate visibility.
**Question 9. For legibility, the lettering on an Idaho dealer sign must be at least:**
A) 2 inches tall
B) 3 inches tall
C) 4 inches tall
D) 5 inches tall
Answer: C
Explanation: The state requires a minimum of 4-inch lettering so that drivers can read the sign from the
roadway.
**Question 10. How many vehicles must a dealer be able to display on the premises to satisfy Idaho’s
display-area requirement?**
A) Three
B) Four
C) Five
D) Six
, ITD Dealer License Ultimate Exam
Answer: C
Explanation: Idaho requires space to display at least five vehicles at any time for a dealer to be
considered compliant.
**Question 11. Which document must a dealer provide to the Idaho Motor Vehicle Investigator (MVI)
during the initial inspection?**
A) Copy of the dealer’s lease agreement
B) Proof of liability insurance for each vehicle on lot
C) List of all current inventory with VINs
D) Employee handbook for sales staff
Answer: C
Explanation: The MVI inspects the inventory list to verify that the dealer can physically display the
required number of vehicles.
**Question 12. When a dealer receives an out-of-state title for a vehicle they will sell in Idaho, the title
must be:**
A) Accepted as-is and filed without changes
B) Re-issued by the Idaho DMV before the sale
C) Converted to a blank Idaho title within 30 days
D) Returned to the seller for correction
Answer: B
Explanation: Out-of-state titles must be re-issued by the Idaho DMV to reflect Idaho ownership before
the vehicle can be sold.
**Question 13. A “Salvage” brand on an Idaho title indicates that the vehicle:**
A) Has never been in an accident
B) Was declared a total loss by an insurance company
C) Has a modified engine
D) Is a manufacturer’s demonstration unit
Answer: B
**Question 1. Which Idaho Dealer License class authorizes the sale of both new and used motor
vehicles?**
A) Wholesale-only license
B) Retail license
C) Manufacturer license
D) Utility trailer license
Answer: B
Explanation: A retail license permits a dealer to sell both new and used vehicles to the public, while a
wholesale-only license limits sales to other dealers.
**Question 2. A dealer who wishes to sell only motorcycles must obtain which specific license?**
A) Retail vehicle license
B) Motorcycle dealer license
C) ATV dealer license
D) Snowmobile dealer license
Answer: B
Explanation: Idaho requires a separate motorcycle dealer license for those who sell motorcycles
exclusively; other vehicle licenses do not cover motorcycles.
**Question 3. Which of the following is NOT a required component of the application for any Idaho
dealer license?**
A) Federal Employer Identification Number (EIN)
B) Seller’s Permit from the Idaho Tax Commission
C) Proof of automobile insurance covering the dealership lot
D) Personal background check for owners/officers
Answer: C
Explanation: While insurance is advisable, the Idaho dealer application does not mandate proof of
general automobile insurance; the other three items are mandatory.
**Question 4. The Idaho Consumer Asset Recovery (ICAR) Fund primarily serves what purpose?**
, ITD Dealer License Ultimate Exam
A) Provides financing for dealer inventory
B) Assists consumers in recovering losses from dealer fraud
C) Funds the state’s vehicle inspection program
D) Covers dealer liability for warranty claims
Answer: B
Explanation: The ICAR Fund is a consumer protection mechanism that reimburses buyers who suffer
losses due to dealer misconduct.
**Question 5. What is the minimum surety bond amount required for a wholesale-only dealer license in
Idaho?**
A) $10,000
B) $20,000
C) $30,000
D) $40,000
Answer: D
Explanation: Idaho mandates a $40,000 bond for wholesale-only dealers, whereas the retail bond is
$20,000.
**Question 6. Under Idaho law, a dealer may operate without posting a bond if they have been
continuously licensed for how many years?**
A) One year
B) Two years
C) Three years
D) Five years
Answer: C
Explanation: The “three-year rule” allows a dealer to forgo a bond after three consecutive years of
compliance and good standing.
**Question 7. Which of the following physical locations is prohibited for an Idaho dealer’s primary place
of business?**
A) Stand-alone commercial building
, ITD Dealer License Ultimate Exam
B) Industrial park warehouse
C) Residential single-family home
D) Mixed-use commercial-residential building
Answer: C
Explanation: Idaho law expressly forbids using a residential single-family dwelling as a dealer’s primary
business location.
**Question 8. The minimum required size for an exterior dealer sign in Idaho is:**
A) 12 square feet
B) 18 square feet
C) 24 square feet
D) 30 square feet
Answer: C
Explanation: Idaho mandates a minimum of 24 sq ft for exterior signage to ensure adequate visibility.
**Question 9. For legibility, the lettering on an Idaho dealer sign must be at least:**
A) 2 inches tall
B) 3 inches tall
C) 4 inches tall
D) 5 inches tall
Answer: C
Explanation: The state requires a minimum of 4-inch lettering so that drivers can read the sign from the
roadway.
**Question 10. How many vehicles must a dealer be able to display on the premises to satisfy Idaho’s
display-area requirement?**
A) Three
B) Four
C) Five
D) Six
, ITD Dealer License Ultimate Exam
Answer: C
Explanation: Idaho requires space to display at least five vehicles at any time for a dealer to be
considered compliant.
**Question 11. Which document must a dealer provide to the Idaho Motor Vehicle Investigator (MVI)
during the initial inspection?**
A) Copy of the dealer’s lease agreement
B) Proof of liability insurance for each vehicle on lot
C) List of all current inventory with VINs
D) Employee handbook for sales staff
Answer: C
Explanation: The MVI inspects the inventory list to verify that the dealer can physically display the
required number of vehicles.
**Question 12. When a dealer receives an out-of-state title for a vehicle they will sell in Idaho, the title
must be:**
A) Accepted as-is and filed without changes
B) Re-issued by the Idaho DMV before the sale
C) Converted to a blank Idaho title within 30 days
D) Returned to the seller for correction
Answer: B
Explanation: Out-of-state titles must be re-issued by the Idaho DMV to reflect Idaho ownership before
the vehicle can be sold.
**Question 13. A “Salvage” brand on an Idaho title indicates that the vehicle:**
A) Has never been in an accident
B) Was declared a total loss by an insurance company
C) Has a modified engine
D) Is a manufacturer’s demonstration unit
Answer: B
