CAR DEALER LICENSE TEST WITH CORRECT ANSWERS

CAR DEALER LICENSE TEST WITH CORRECT ANSWERS "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" "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." "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 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" "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" "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" "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." "DMV requires Special Plates (dealer plates) be placed where on the vehicle? - CORRECT ANSWER In the rear, over the existing license plate." "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." "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" "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." "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." "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" "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" "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 and B - CORRECT ANSWER c. A red warning decal be placed on vehicles with branded titles" "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" "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."