AFIP Quiz
Which of the following disclosures are required by the Consumer Leasing Act/Reg. M to be on a lease
agreement? - Answer-· Detailed information regarding the lessee's responsibility for maintaining and
servicing the vehicle
· Excess wear and use standards
· An early termination fee
· The lessee's requirement to provide the vehicle insurance required by the lessor
· Other items not addressed in the question
The APR or Annual Percentage Rate is a mandated disclosure. It must be used in oral discussions with a
customer, in funding-related advertisements, and on the retail installment sale agreement. A customer
asks, what does APR mean? Your response should be: - Answer-That's the "cost of credit" as a yearly
rate.
As noted in the Truth in Lending Act and Reg. Z, if the customer owes more on the trade-in than the
used car manager allowed, what should the F&I manager do? - Answer-A. Record the deficiency as a
negative down payment.
B. Increase the price of the vehicle and/or the trade-in so the numbers still add up correctly.
C. Depending on the situation, either A or B.
D. None of the above
,If a Dealer receives a cease and desist order for an ad they ran that violated the Truth in Lending
Act/Reg. Z. If the Dealer continues to run the ad, what are the potential penalties? - Answer-They could
be required to pay a fine of up to $41,484 per day, per violation
Which Act does Regulation Z implement? - Answer-Truth in Lending Act
How are deferred down payments treated under Truth in Lending Act and Regulation Z? - Answer-A
deferred downpayment occurs when the customer commits to a larger dollar amount than the
unencumbered funds he is able to provide at the time the request for credit is submitted to a finance
source. (Also referred to as a "hold-check")
(The customer tenders $3,000 in cash at the time the credit application is completed and sent to a
funding source. However, the customer promises to provide another $2,000 in cash within five days. The
request for credit sent to the funding source indicates a downpayment of $5,000.)
· The total amount of the deferred downpayment must be paid in full before the second otherwise
regularly scheduled payment. (Before that second direct withdrawal is taken from the customer's bank
account, 100% of the deferred amounts must have been paid.0
· A finance charge cannot be imposed on the deferred amount. · The deferred amount cannot be
included in the amount financed - it must be recorded (included in) the recorded downpayment
· With the exception of California, the deferred downpayment
NOTE:
If the customer provides one or more check to be included in the total amount of money recorded as
the downpayment (hold-checks) all of the checks have to be dated as of the date of the transaction. You
cannot collect "post-dated" checks.
Whenever discussing financing with a prospective customer regarding the cost of credit, regardless of if
it's in an oral discussion, advertisement or during disclosure on an installment sale contract, the term
"APR" or "annual percentage rate" should be used. TRUE / FALSE - Answer-TRUE
According to Regulation Z, it is necessary to disclose APR and the Finance Charge? TRUE?False - Answer-
TRUE
,The Truth In Lending Act (TILA) is implemented by Regulation Z? TRUE ? FALSE - Answer-TRUE
With the exception of some Precomputed Interest contracts used by secondary finance sources, all
other installment sales contracts are simple interest or interest-bearing contracts. The following is a
layman's explanation of a simple interest installment sale transaction. In a precomputed contract the
finance charge is computed on the assumption the contract will run full term. If the customer terminates
the agreement during the repayment term, he will receive a refund of the unearned premium.
In a simple interest- or interest-bearing installment sale agreement, the finance charge is computed
daily and paid monthly throughout the term of the agreement. If the customer pays-off the vehicle
before the scheduled end of the contract there is unearned finance charge money to refund, but it has
been each month the contract has been in force. There is no refund of the unearned finance chargE
TRUE /FALSE - Answer-TRUE
The term Contract Provisions is a TILA box statement. It alerts the customer to the important
information found on the front and back of the agreement. If in reading contract provisions, the
customer asked you to explain the Acceleration Clause, your response would be? - Answer-A contractual
right to accelerate the balance of the installment sale agreement if the customer fails to make timely
monthly payments or to secure and maintain the required property insurance
There is a government requirement for an advertisement if you mention certain terms in the ad known
as triggering terms then you must include all of another set of terms known as the triggered terms.
Which of the terms listed below does NOT qualify as triggering term? - Answer-The name of the
financing source is not a triggered term.
If an installment sale advertisement includes any one of the triggering terms, which of the following
must also be included in the ad? - Answer-There is a government requirement for an advertisement,
that if you mention certain terms in the ad known as triggering terms, then you must include all of the
triggered terms.
As stated in the Truth in Lending Act - Reg. Z the triggering terms for an installment sale ad are:
· The amount or percentage of any downpayment
· The number of payments or contract term
, · The amount of any payment
· The dollar amount of any finance charge.
Which of the following are not Truth in Lending Act or Reg. Z disclosure box items? - Answer-he cost of
the extended service agreement is not a Truth in Lending - Reg Z disclosure.
THE REQUIRED TILA BOX DISCLOSURES ARE:
The creditor's identity/the amount financed/an itemization of the amount financed/the finance
charge/the annual percentage rate/the repayment schedule/the total of the payments/the total sale
price (the largest number on the contact)/a prepayment statement/late charges provisions/the dealer
will acquire a security interest (lien) on the vehicle/the need to provide insurance/a statement to refer
to the document for additional information.
The total sale price is _______ the largest number on the installment contract - Answer-ALWAYS
Which of the following does the Federal Trade Commission (FTC) consider advertisements? - Answer-A.
Social media (facebook, instagram, Twitter, Tik Tok, etc.)
B. Messages in newspapers, magazines, leaflets, flyers, a catalog, price tags with credit information
C. Radio, TV, or public address system announcements, interior and exterior signs
D. Internet, fax, email, and telephone solicitations
E. Direct mail and letters to customers as part of an organized solicitation of business
Which if any of the items listed below is NOT a mandated TILA-box disclosure? - Answer-An Assignment
Statement - the Finance Source accepting assignment
If a customer is re-contracted five days after the original agreement was executed, how should the
second agreement be treated? - Answer-As an entirely new agreement, with the date the second
contract is executed recorded on the installment sale agreement
Which of the following disclosures are required by the Consumer Leasing Act/Reg. M to be on a lease
agreement? - Answer-· Detailed information regarding the lessee's responsibility for maintaining and
servicing the vehicle
· Excess wear and use standards
· An early termination fee
· The lessee's requirement to provide the vehicle insurance required by the lessor
· Other items not addressed in the question
The APR or Annual Percentage Rate is a mandated disclosure. It must be used in oral discussions with a
customer, in funding-related advertisements, and on the retail installment sale agreement. A customer
asks, what does APR mean? Your response should be: - Answer-That's the "cost of credit" as a yearly
rate.
As noted in the Truth in Lending Act and Reg. Z, if the customer owes more on the trade-in than the
used car manager allowed, what should the F&I manager do? - Answer-A. Record the deficiency as a
negative down payment.
B. Increase the price of the vehicle and/or the trade-in so the numbers still add up correctly.
C. Depending on the situation, either A or B.
D. None of the above
,If a Dealer receives a cease and desist order for an ad they ran that violated the Truth in Lending
Act/Reg. Z. If the Dealer continues to run the ad, what are the potential penalties? - Answer-They could
be required to pay a fine of up to $41,484 per day, per violation
Which Act does Regulation Z implement? - Answer-Truth in Lending Act
How are deferred down payments treated under Truth in Lending Act and Regulation Z? - Answer-A
deferred downpayment occurs when the customer commits to a larger dollar amount than the
unencumbered funds he is able to provide at the time the request for credit is submitted to a finance
source. (Also referred to as a "hold-check")
(The customer tenders $3,000 in cash at the time the credit application is completed and sent to a
funding source. However, the customer promises to provide another $2,000 in cash within five days. The
request for credit sent to the funding source indicates a downpayment of $5,000.)
· The total amount of the deferred downpayment must be paid in full before the second otherwise
regularly scheduled payment. (Before that second direct withdrawal is taken from the customer's bank
account, 100% of the deferred amounts must have been paid.0
· A finance charge cannot be imposed on the deferred amount. · The deferred amount cannot be
included in the amount financed - it must be recorded (included in) the recorded downpayment
· With the exception of California, the deferred downpayment
NOTE:
If the customer provides one or more check to be included in the total amount of money recorded as
the downpayment (hold-checks) all of the checks have to be dated as of the date of the transaction. You
cannot collect "post-dated" checks.
Whenever discussing financing with a prospective customer regarding the cost of credit, regardless of if
it's in an oral discussion, advertisement or during disclosure on an installment sale contract, the term
"APR" or "annual percentage rate" should be used. TRUE / FALSE - Answer-TRUE
According to Regulation Z, it is necessary to disclose APR and the Finance Charge? TRUE?False - Answer-
TRUE
,The Truth In Lending Act (TILA) is implemented by Regulation Z? TRUE ? FALSE - Answer-TRUE
With the exception of some Precomputed Interest contracts used by secondary finance sources, all
other installment sales contracts are simple interest or interest-bearing contracts. The following is a
layman's explanation of a simple interest installment sale transaction. In a precomputed contract the
finance charge is computed on the assumption the contract will run full term. If the customer terminates
the agreement during the repayment term, he will receive a refund of the unearned premium.
In a simple interest- or interest-bearing installment sale agreement, the finance charge is computed
daily and paid monthly throughout the term of the agreement. If the customer pays-off the vehicle
before the scheduled end of the contract there is unearned finance charge money to refund, but it has
been each month the contract has been in force. There is no refund of the unearned finance chargE
TRUE /FALSE - Answer-TRUE
The term Contract Provisions is a TILA box statement. It alerts the customer to the important
information found on the front and back of the agreement. If in reading contract provisions, the
customer asked you to explain the Acceleration Clause, your response would be? - Answer-A contractual
right to accelerate the balance of the installment sale agreement if the customer fails to make timely
monthly payments or to secure and maintain the required property insurance
There is a government requirement for an advertisement if you mention certain terms in the ad known
as triggering terms then you must include all of another set of terms known as the triggered terms.
Which of the terms listed below does NOT qualify as triggering term? - Answer-The name of the
financing source is not a triggered term.
If an installment sale advertisement includes any one of the triggering terms, which of the following
must also be included in the ad? - Answer-There is a government requirement for an advertisement,
that if you mention certain terms in the ad known as triggering terms, then you must include all of the
triggered terms.
As stated in the Truth in Lending Act - Reg. Z the triggering terms for an installment sale ad are:
· The amount or percentage of any downpayment
· The number of payments or contract term
, · The amount of any payment
· The dollar amount of any finance charge.
Which of the following are not Truth in Lending Act or Reg. Z disclosure box items? - Answer-he cost of
the extended service agreement is not a Truth in Lending - Reg Z disclosure.
THE REQUIRED TILA BOX DISCLOSURES ARE:
The creditor's identity/the amount financed/an itemization of the amount financed/the finance
charge/the annual percentage rate/the repayment schedule/the total of the payments/the total sale
price (the largest number on the contact)/a prepayment statement/late charges provisions/the dealer
will acquire a security interest (lien) on the vehicle/the need to provide insurance/a statement to refer
to the document for additional information.
The total sale price is _______ the largest number on the installment contract - Answer-ALWAYS
Which of the following does the Federal Trade Commission (FTC) consider advertisements? - Answer-A.
Social media (facebook, instagram, Twitter, Tik Tok, etc.)
B. Messages in newspapers, magazines, leaflets, flyers, a catalog, price tags with credit information
C. Radio, TV, or public address system announcements, interior and exterior signs
D. Internet, fax, email, and telephone solicitations
E. Direct mail and letters to customers as part of an organized solicitation of business
Which if any of the items listed below is NOT a mandated TILA-box disclosure? - Answer-An Assignment
Statement - the Finance Source accepting assignment
If a customer is re-contracted five days after the original agreement was executed, how should the
second agreement be treated? - Answer-As an entirely new agreement, with the date the second
contract is executed recorded on the installment sale agreement
