CALIFORNIA DEALER LICENSE EXAM QUESTIONS WITH 100% CORRECT ANSWERS

CALIFORNIA DEALER LICENSE EXAM QUESTIONS WITH 100% CORRECT ANSWERS “A dealer's license and special plates shall be automatically canceled if: - CORRECT ANSWER The dealer abandons the established place of business, The dealer fails to maintain an adequate bond, and The CDTFA resale permit is suspended" "A dealer must affix to all vehicles offered for sale: - CORRECT ANSWER A federal trade commission buyers guide" "All the agreements of the buyer and seller with respect to the total cost and terms of payment must be contained in a single document. That document is: - CORRECT ANSWER The conditional sales contract" "Which legal actions may be taken against a dealer if they violate the laws, rules and regulations related to their licensed activity? - CORRECT ANSWER Administrative action, Criminal action, and Civil action" "Within 20 days after the sale of a consigned vehicle the dealer must notify the consigner of: - CORRECT ANSWER The date of sale, The amount of any lien payable to the lienholder, and The total sales price" "A California law does not provide an included "cooling off "period or other cancellation period for vehicle sales. The only exception is: - CORRECT ANSWER For legal cause such as fraud or with the agreement of the seller" "As the selling dealer, you may allow the customer to take the vehicle to get their own smog certificate: - CORRECT ANSWER You may never allow the customer to take the vehicle to get their own smog certificate" "Of the following used vehicle sale prices, which would a dealer not be required to offer a contract cancellation option agreement? - CORRECT ANSWER $52,995" "What is the maximum markup that dealers may add to a loan for their ówn profit? - CORRECT ANSWER 2.5% on loans 60 or fewer months, 2% on loans 60 months or more" "Effective July 1, 2006, dealers who advertise a vehicle as "certified" will be in violation of the law if the vehicle they are referring to in the ad has the following history: - CORRECT ANSWER Salvage and Frame damage" "Which documents are used to disclose the total cost and terms of payment? - CORRECT ANSWER The conditional sales contract" "Before you can apply for your dealer license, you need to get a resale permit (seller's permit) from where? - CORRECT ANSWER The CDFTA" "What is required in every dealer's advertisement for a vehicle for sale? - CORRECT ANSWER Make and model, Last 6 of the VIN, Dealership name" "What is the purpose of Division 12 of the Vehicle Code? - CORRECT ANSWER Regulates the manner in which vehicles are equipped for safe operation" "How many cars can a private individual legally sell per year with the intent to make a profit? - CORRECT ANSWER None" "California dealer advertising laws apply to which, of the following media types: - CORRECT ANSWER All forms of media" "What must a dealer do when selling vehicles at temporary location? - CORRECT ANSWER Apply for a "Temporary Branch Location"" "How much notice is required when applying for a temporary branch location? - CORRECT ANSWER 30 Days" "After return of the vehicle under the cancellation option rules, how soon must the dealer make refund to the customer? - CORRECT ANSWER Within 48 Hours" "Which person can use inventory vehicle with the dealer plate 24/7 for personal use? - CORRECT ANSWER Dealer Owner" "What is the proper location to place the dealer plate while on a test drive? - CORRECT ANSWER In place of rear license plate" "Which of the following statements is correct regarding dealer plates? - CORRECT ANSWER Dealer plates may be used for any purpose by the dealer" "Which of the following signs has to be posted in dealership office? - CORRECT ANSWER No cooling off period & Vehicle inspection signs, Business License, Seller's Permit, Dealer License, Salesperson's license(s)" "What is the minimum passing score for the DMV Exam? - CORRECT ANSWER 70%" "What is the DMV dealer test fee? - CORRECT ANSWER $16" "What is the number of vehicles you can sell per year without a valid license? - CORRECT ANSWER 0" "What is the required bond or cash amount? - CORRECT ANSWER 50,000" "If you post cash, how many years after you close will the DMV hold your money? - CORRECT ANSWER 3 years" "What is the maximum distance between your retail display area and your office? - CORRECT ANSWER 1000 ft" "What is the minimum square footage of the retail dealer sign? - CORRECT ANSWER 2 feet" "What is the minimum distance the sign can be read from? - CORRECT ANSWER 50 feet" "What is the original application fee? - CORRECT ANSWER $175" "What is the renewal application fee? - CORRECT ANSWER $125" "What is the permanent or temporary branch location fee? - CORRECT ANSWER $70" "What is the processing fee for the Livescan fingerprint card? - CORRECT ANSWER $44" "What is the fee for the dealer special plate not including county taxes? - CORRECT ANSWER $50" "When dealership is going to be moved how far in advance must the DMV receive written notice? - CORRECT ANSWER Immediately" "When a dealership is going to be sold how far in advance must the DMV receive written notice? - CORRECT ANSWER 10 days" "How much is auto broker endorsement fee? How much for renewal? - CORRECT ANSWER $150 first year, $100 renewal" "When a corporation is going to make a change how far in advance must the DMV receive written notice? - CORRECT ANSWER 30 days" "What is the corporate change fee? - CORRECT ANSWER $70" "What is the initial auto broker fee? - CORRECT ANSWER $150" "What is the renewal auto broker fee? - CORRECT ANSWER $100" "Once a consignment vehicle is sold how many days does the dealer have to make an accounting & payment? - CORRECT ANSWER 20 days" "What is the maximum a dealer can charge for document preparation? - CORRECT ANSWER $55" "What is the maximum a dealer can charge for smog inspection, which is taxable? - CORRECT ANSWER $50" "What is the maximum a dealer can charge for a smog certificate, which is not taxable? - CORRECT ANSWER $8.25" "What is the fee a dealer must charge for a retail transfer? - CORRECT ANSWER $15" "How many days of registration must remain on the date of sale to avoid collecting new fees from the customer? - CORRECT ANSWER 60 days" "What is the basic sales tax rate? - CORRECT ANSWER 8.25%" "How many days does a dealer have to get the notice to DMV, not counting the date of sale? - CORRECT ANSWER 5 days" "How many days does a dealer have to get the fees to DMV, not counting the date of sale? - CORRECT ANSWER 20 days" "How many days does a dealer have to get the documents to DMV, not counting the date of sale? - CORRECT ANSWER 30 days" "Which item is required in your sales office? - CORRECT ANSWER Locked Cabinet" "Who must post a valid resale permit from the board of equalization? - CORRECT ANSWER Every Dealer" "Which of the following must be displayed in a retail location? - CORRECT ANSWER Dealer license, Inspection of vehicle notice, and No cooling off/ cancellation option notices" "Where are you to hold the blank report of sale forms? - CORRECT ANSWER Locked Cabinet" "What must the dealer post when a salesperson is hired? - CORRECT ANSWER Sales Person License" "How soon must the dealer notify DMV when a salesperson is hired or fired? - CORRECT ANSWER Notify DMV within 10 days" "How much space is required for retail display area? - CORRECT ANSWER 1 for each type of vehicle" "How much signage is required for retail license? - CORRECT ANSWER 2 square feet" "The dealer erected sign must be visible from what distance? - CORRECT ANSWER 50 Feet" "What is required for a wholesale dealer accepting a consignment? - CORRECT ANSWER Illegal transaction" "What is required for a licensed dealer acting as a broker? - CORRECT ANSWER Broker agreement" "What is required for a retail dealer accepting a consignment? - CORRECT ANSWER Consignment agreement" "When may a dealer engage in off site sales? - CORRECT ANSWER W/ temporary branch location" "What does the term ROS stand for? - CORRECT ANSWER Report of Sale" "How many types of ROS does the used retail dealer use? - CORRECT ANSWER Three (Wholesale, Retail, Auction)" "What must the dealer do when selling from a branch location? - CORRECT ANSWER Use branch location on ROS form" "Who is required to sign the buyer's guide? - CORRECT ANSWER Buyer" "What of the following is the renewal Ilicense fee? - CORRECT ANSWER $125" "What of the following is the branch location fee? - CORRECT ANSWER $70" "How soon must the dealer notify DM when there is a change of dealer ownership? - CORRECT ANSWER 10 days prior to sale" "How soon must the dealer notify DMV when there is a change of dealer ownership involving a corporation? - CORRECT ANSWER 30 days prior to sale" "What of the following is the corporate change fee?. - CORRECT ANSWER $70" "What color is a valid resale permit from the board of equalization? - CORRECT ANSWER Goldenrod" "In a mixed use setting, what else is required for retail display area? - CORRECT ANSWER Clearly marked space" "How soon must the retail dealer pay the buyer when he sells a consigned vehicle? - CORRECT ANSWER Pay within 20 days" "What is required on the back side of the buyer's guide? - CORRECT ANSWER Contact name and phone" "What is the maximum the dealer can charge for document preparation? - CORRECT ANSWER $55" "What is the penalty the dealer faces for excessive fees for smog inspection? - CORRECT ANSWER Unenforceable contract" "What items must the dealer charge sales tax upon? - CORRECT ANSWER Price of accessories, Price of the vehicle, Document Prep Fee" "What must the dealer create and have in his office with every sale? - CORRECT ANSWER Jacket" "The dealer must hold ROS forms in his office for how long? - CORRECT ANSWER 4 years" "In what order must the dealer use ROS forms? - CORRECT ANSWER Numerical Order" "The temporary memo regarding DMV fees due on the retail ROS allows posting within how many business days to avoid a $ 5 ASF ? - CORRECT ANSWER 30 days" "What of the following ASF penalties carry a $25 fine? - CORRECT ANSWER Title application & corrections not cleared in 50 days" "What must the dealer do with the temporary operating permit? - CORRECT ANSWER Place in any window visible from outside the vehicle" "What must the dealer do for DMV compliance if he is sells a vehicle for out of state delivery? - CORRECT ANSWER Secure one way vehicle permit OR preregister vehicle" "What must the dealer charge for one way trip permkt when selling a car for O/S delivery? - CORRECT ANSWER $19" "What is the minimum time allowed for the contract cancellation option? - CORRECT ANSWER 48 hours" "Who must be offered the contract cancellation option? - CORRECT ANSWER Every retail buyer w/ cash price less than 40k" "What is the maximum contract cancellation option fee a dealer may charge for a $ 28,000 vehicle? - CORRECT ANSWER $250" "When may the option fee be waived? - CORRECT ANSWER Anytime at the dealers discretion" "What is the minimum allowable miles if the buyer purchases the cancellation option? - CORRECT ANSWER 250" "What is the maximum total option and restocking fee allowed? - CORRECT ANSWER $500" "What is the definition of a full refund? - CORRECT ANSWER total price minus option and restocking fee" "Which of the following must be displayed in a retail location? - CORRECT ANSWER Contract Cancellation Option notice, Inspection of vehicle notice, and No cooling off period notice" "Under AB 68, when the buyer elects to purchase the cancellation option the dealer must? - CORRECT ANSWER Perform a written inspection report" "Under AB 68, when the buyer elects to exercise the return option the dealer must? - CORRECT ANSWER Perform a written inspection report" "The new law, AB 68 increases the penalties for failure to disclose to? - CORRECT ANSWER Misdemeanor" "When must a dealer make a credit score disclosure? - CORRECT ANSWER Whenever the dealer runs a credit check" "What is the maximum allowable dealer markup for loan assignment on a 60 month contract? - CORRECT ANSWER 2.5%" "What advertising terms under AB 68 have new requirements? - CORRECT ANSWER certified" "Under AB 68, when may a flood vehicle be sold as "certified" ? - CORRECT ANSWER Never" "Under AB 68, when may a lemon law buyback car be sold as "certified " ? - CORRECT ANSWER Never" "Under AB 68, when a dealer advertises a " certified " vehicle the dealer must maintain? - CORRECT ANSWER A vehicle certification program" "How many credit score disclosures must be presented? - CORRECT ANSWER One for each credit agency contacted" "How many disclosures are required for dealer add-ons? - CORRECT ANSWER One for each credit agency contacted" "How many disclosures are required for dealer add-ons? - CORRECT ANSWER One for each item, with a total for all add-ons" "Under AB 68, when a dealer rejects an optioned return the dealer must? - CORRECT ANSWER Issue a written explanation for rejection" "How much is contract cancellation option for a vehicle with a cash price of $5,000 or less - CORRECT ANSWER $75" "How much is contract cancellation option for a vehicle with a cash price of $5,000, but not more than $10,000 - CORRECT ANSWER $150" "How much is contract cancellation option for a vehicle with a cash price of $10,000, but not more than $30,000 - CORRECT ANSWER $250" "How much is contract cancellation option for a vehicle with a cash price of $30,000 but not more than $40,000? - CORRECT ANSWER 1% of purchase price" "Display areas must be within how many feet of the office? - CORRECT ANSWER 1000 feet" "How much is the sales license fee? And how long is it good for? - CORRECT ANSWER $93, good for 3 years, no test" "How much is initial DMV Licensing Original Application fee? - CORRECT ANSWER $175" "How much are dealer plates? - CORRECT ANSWER $50" "How much are fingerprint cards? - CORRECT ANSWER $42" "What size should the sign at each retail location be that allows buyers to bring independent third party inspectors? - CORRECT ANSWER at least 8x10" "California law allows 2 day contract cancellation option on used cars that are less than... - CORRECT ANSWER $40,000" "How much is a salespersons license? - CORRECT ANSWER $93" 1 conditional sales contracts must be completed _____? - CORRECT ANSWER In writing" "A contract cancellation display at each sales office and cubicle must have dimensions of _________? - CORRECT ANSWER 8" x 10"" "If a customer purchases a vehicle for $5,000 and decides to purchase a contract cancellation option, the dealer may charge the customer up to ________? - CORRECT ANSWER $75" "If a customer purchases a vehicle for $10,000 and decides to purchase a contract cancellation option, the dealer may charge the customer up to ________? - CORRECT ANSWER $150" "If a customer purchases a vehicle for $30,000 and decides to purchase a contract cancellation option, the dealer may charge the customer up to ________? - CORRECT ANSWER $250" "If the customers purchases a vehicle price $30,000 - $39,999 and decides to purchase a contract cancellation option, the dealer may charge the customer up to __________? - CORRECT ANSWER 1% of the selling price" "If a customer purchases a vehicle for $40,001 ,how much can the dealer charge for a contract cancellation option? - CORRECT ANSWER $0" "What is Reg Z? - CORRECT ANSWER Law that states all terms and costs of financing must be disclosed to the buyer" "What must be furnished to the buyer after a sale? - CORRECT ANSWER A Conditional Sales Contract" "What is the maximum deposit an auto broker may accept from a customer? - CORRECT ANSWER 2.5% of the selling price" "What is consignment? - CORRECT ANSWER An arrangement under which a dealer agrees to accept possession of a vehicle from an owner on record for the purpose of selling the vehicle" "If a dealer notices curbstoning, what agency should you file a complaint to? - CORRECT ANSWER DMV" "If a customer purchased a vehicle less than $5,000 and a contract cancellation option, and decides to return the vehicle within the time specified, the dealer can charge a maximum restocking fee of __________? - CORRECT ANSWER $175" "If a customer purchased a vehicle less than $10,000 and a contract cancellation option, and decides to return the vehicle within the time specified, the dealer can charge a maximum restocking fee of __________? - CORRECT ANSWER $350" "If a customer purchased a vehicle costing $10,000 - $39,999 and a contract cancellation option, and decides to return the vehicle within the time specified, the dealer can charge a maximum restocking fee of __________? - CORRECT ANSWER $500" "AB 86 states that if a customer purchases a contract cancellation option, the dealer only has to allow the customer to return the vehicle how many times in a 30 day period? - CORRECT ANSWER 1 time" "If a customer purchases a contract cancellation option, and decides to return the vehicle within the specified time frame, what does the dealer have to return? - CORRECT ANSWER A full refund" "Which type of vehicle being sold to customers must be disclosed in writing? - CORRECT ANSWER Former Taxicab" "Allowable interest rates for financing for auto finance companies and buy here pay here dealerships - CORRECT ANSWER Do not apply" "Simple interest and _______? Interest are the two permissible methods for computing interest for financing - CORRECT ANSWER Pre computed" "AB 68 dealer finance income is limited to _______% for contracts of 60 months - CORRECT ANSWER 2.5%" "AB 68 dealer finance income is limited to _______% for contracts over 60 months - CORRECT ANSWER 2.0%" "What is the maximum a dealer can charge a customer for a document preparation fee? - CORRECT ANSWER $85" "Repossession has five basic steps what is the correct order? - CORRECT ANSWER Send buyer a 15 day notice certified,accelerate balance due, repossess the vehicle, sell the vehicle, sue the buyer for any loss or deficiency" "Deficiency is? - CORRECT ANSWER The amount the buyer is behind on their payment to the dealer/financer" "If a dealer carries own contract (buy here pay here) what must be complied with ? - CORRECT ANSWER Reg Z" "When collecting sales and use tax, who should the dealer remit fees to? - CORRECT ANSWER Board of equalization" "What tax rate is used to determine the amount of sales and use tax to be collected from the customer - CORRECT ANSWER The county where the registered owner lives" "What is the size of a classified print ad? - CORRECT ANSWER 2 column width by 7"" "What cannot be waived even with customer consent? - CORRECT ANSWER Safety inspection" "What is the second primary type of advertisement ? - CORRECT ANSWER Display print ad" "What is not required to be checked as part of division 12 safety equipment? - CORRECT ANSWER Air conditioning" "What location is prohibited to drive to using special dealers license plates - CORRECT ANSWER Funerals" "How much is the fine per vehicle if the dealer does not affix the federal buyers guide ? - CORRECT ANSWER $11,000" "How much extra can dealers charge to buyers financing the vehicle? - CORRECT ANSWER Cannot charge extra" "A dealer cannot advertise a vehicle as certified if? - CORRECT ANSWER The title was branded as a lemon law buyback" "What is the maximum a dealer can charge for the smog certification fee - CORRECT ANSWER $8.25" "Non-complying tile means? - CORRECT ANSWER Older California title such ass "pink slips" and pre 1994 "rainbow" titles" "The transfer fee is currently? - CORRECT ANSWER $15" "Dealers must submit application and fees to the DMV ______ days from the date of sale? - CORRECT ANSWER 30 days" "ASF Means? - CORRECT ANSWER Administrative service fee" "Failing to notify the dmv of sale within 5 calendar days of date of sale is a fine of? - CORRECT ANSWER $5" "Failing to submit transfer/registration application to dmv within 30 days of date of sale is a fine of? - CORRECT ANSWER $5" "When a dealer sells a vehicle for export to another country the selling dealer must mark the report of sales (reg 51 or reg 396)? - CORRECT ANSWER For export to another country" "VLF Means? - CORRECT ANSWER Vehicle License Fee" "The VLF is calculated on the vehicle's? - CORRECT ANSWER Market value" "What is not permitted to be used on registration paperwork? - CORRECT ANSWER Highlighter" "A temporary branch location may be operated for a time period not to be exceed how many days ? - CORRECT ANSWER 30 days" "Bird dog Fees are? - CORRECT ANSWER People that the dealer pays to refer customers to the dealer" "Transfer of vehicles _____ model years old or less no longer require smog tests? - CORRECT ANSWER 4 years" "Smog Certificates are valid only ________ days for private parties? - CORRECT ANSWER 90" "Smog certificates issued to a motor vehicle are valid for ______ years? - CORRECT ANSWER 2 years" "The maximum a dealer may charge the buyer for smoging a vehicle is? - CORRECT ANSWER $50" "Reg 51 is? - CORRECT ANSWER Report of sales" "Reg 396 is? - CORRECT ANSWER Wholesale report of sales" "The lemon law is valid for the first _______ months or _______ miles? - CORRECT ANSWER 12/12,000" "_________ vehicles sold in California will generally come with a manufacturer's extended warranty? - CORRECT ANSWER New" "In order to be an auto broker you must be licensed as a? - CORRECT ANSWER Dealer" "What will happen if you fail to renew your dealer license on time and enter the 30- day grace period? - CORRECT ANSWER " "Every retail dealer shall have a sign erected or posted at his place of business. The sign shall have a total size of not less than: - CORRECT ANSWER Two square feet" "Each retail dealer is required to maintain a proper display area: - CORRECT ANSWER At all times" "Signs on all vehicles indicating the main location address: - CORRECT ANSWER Is not required at a licensed dealer location" "A licensed dealer location must have all of the following: - CORRECT ANSWER An office for the exclusive use of the dealer, A Sign indicating the name and address of the dealer, and A Display area large enough to display the types" "Should the dealer change the site or location of his established place of business, he shall notify the department: - CORRECT ANSWER Immediately" "The basic fee for transfer of ownership on a California registered vehicle is: - CORRECT ANSWER $15" "Any dealer who sells a vehicle when the title is branded "Lemon law buyback "shall provide a disclosure statement to the buyer: - CORRECT ANSWER Prior to the sale of the vehicle" "It is legal to reset the odometer reading on a vehicle: - CORRECT ANSWER It is never legal to reset the odometer reading" "A dealer MUST withdraw any advertisement of a vehicle that has been sold within: - CORRECT ANSWER 48 hours" "A dealer may generate an electronic report of sale book to: - CORRECT ANSWER It is never legal to generate a report of sale book to anyone." "An auto broker must also be licensed as a: - CORRECT ANSWER Retail dealer" "A conditional sales contract is: - CORRECT ANSWER An agreement between the buyer and dealer for payments." "If a dealer accepts a vehicle as a trade-in if it is stolen, which of the following will happen? - CORRECT ANSWER The vehicle is returned to the rightful owner" "Licensing requirements for a dealer's license in California are from: - CORRECT ANSWER The vehicle code" "A dealer must include in all advertisements all of the following except: - CORRECT ANSWER The color of the vehicle" "A dealer must include in all advertisements all of the following: - CORRECT ANSWER The total price of the vehicle, The make of the vehicle and The vehicle identification number or license plate number" "You may keep DMV licensing fees in excess of DMV fees paid to you. - CORRECT ANSWER You may never keep any excess DMV fees paid to you" "Which employees of dealership must be licensed as a DMV vehicle salesperson? - CORRECT ANSWER Salespersons, Sales managers, and Finance managers" "A dealer, changing ownership as a sole proprietor or partnership, is required to submit a new application and pay all fees within: - CORRECT ANSWER 10 days prior to the effective date of the change" "A retail dealer must maintain a surety bond or cash deposit in the amount of: - CORRECT ANSWER $50,000" "How must safety equipment in division 12 of the vehicle be at the time of the sale? - CORRECT ANSWER in good working order" "All dealers must renew their license prior to the expiration date. If a dealer fails to renew the license, but is within the 30 day expiration period. Which of the following will occur? - CORRECT ANSWER The dealer can still renew, but will be required to pay a late fee penalty" "If a dealer is unable to find financing for a customer: - CORRECT ANSWER The down payment must be returned" "According to the California code of regulation, which safety items must a dealer comply with? - CORRECT ANSWER Brakes, Lights, Windshield" "When a dealer sells a vehicle to a retail buyer he must: - CORRECT ANSWER Pay the full sales tax due to the CDTFA, Pay all the registration fees and/or penalties due DMV, and Transfer title and/or registration for the buyer" "When a dealer sells a consigned vehiçle, the consignor must be paid the agreed amount within: - CORRECT ANSWER 20 days" "A dealer may charge a smog inspection and certification fee not to exceed: - CORRECT ANSWER $50 plus the actual cost of the smog inspection certificate" "All advertisements made by a dealer must identify the dealer: - CORRECT ANSWER By the name under which the license does business" "The department, after notice and hearing, may suspend or revoke a license issued, to a dealer for doing which of the following: - CORRECT ANSWER Knowingly or negligently permitting any illegal use of dealer plates" "The department, after notice and hearing, may suspend or revoke a license issued, to a dealer for doing which of the following: - CORRECT ANSWER Knowingly make any false statement or concealing any material fact in any application for registration" "The department, after notice and hearing, may suspend or revoke a license issued, to a dealer for doing which of the following: - CORRECT ANSWER Submitting a check, draft, or money order to the department for fees due which was not honored by the bank" "Prior to entering into negotiations, the selling dealer must notify a purchaser if the vehicle has been: - CORRECT ANSWER A previous daily rental, A taxicab or publicity owned vehicle, and/or An insurance salvage or revived salvage vehicle" "A dealer must post a sign in a conspicuous place in the office that says: - CORRECT ANSWER The prospective buyer may have a vehicle inspected by a third party" "Suspension or revocation of the dealer seller's permit by the CDFTA is cause for: - CORRECT ANSWER Automatic cancellation of the dealer's license" "If a vehicle has over 100,000 miles on it you must - CORRECT ANSWER Notify the customer and properly mark the odometer statement form" "A used vehicle dealer is required to obtain a smog certificate: - CORRECT ANSWER Prior to offering a vehicle for retail sale" "Division 12 Safety Requirements may be waived: - CORRECT ANSWER Never" "After selling a vehicle in California, how many days does a dealer have to submit the report of sale application copy, supporting documents and fees to the DMV? - CORRECT ANSWER 30 Days" "What are examples of when a dealer MUST disclose vehicle history in writing? - CORRECT ANSWER Frame Damage, Salvage Title, Lemon Law Buyback Title, Fire, flood or odometer discrepancies" "Which is a DMV policy, but not an actual law? - CORRECT ANSWER Dealer may not use highlighter pens" "What will happen if you fail to renew your dealer license on time and do not renew within the 30-day grace period? - CORRECT ANSWER Your dealer license will be automatically cancelled" "Which one of the following statements is considered unlawful dealer activity? - CORRECT ANSWER Unlicensed location, Failure to pay Administrative Service fee (ASF) within 30 days, and Submission of dishonored check to the Department" "Which of the following part is not considered Division 12 equipment? - CORRECT ANSWER Engine and Transmission" "Which of the following part is considered Division 12 equipment? - CORRECT ANSWER Brakes, Lights, Tires, Horn, Mirrors, Hand brake, Windows, Seat belts, and Air bags" "Vehicle transfer form REG. 262 is required to be filled when: - CORRECT ANSWER Title is unavailable at the time of transfer, Appointing power of attorney, and when an error or alteration has been made in odometer section of title." "Dealer can use the word broker in advertising if: - CORRECT ANSWER Dealer carries broker license as well as dealer license" "When is a sales contract fully executed? - CORRECT ANSWER When the retail buyer takes delivery of vehicle" "How much is the maximum amount a dealer can charge for a Documentation Preparation Fee? - CORRECT ANSWER $55" "What is the purpose of Division 12? - CORRECT ANSWER Regulates the manner in which vehicles are equipped for safe operation" "Division 12 requirements maybe waived only: - CORRECT ANSWER Division 12 requirements may NEVER be waived" "What is required by law for salespersons? - CORRECT ANSWER Only employed licensed salespersons may sell cars, Salespersons licenses must be displayed at the established place of business, Salesperson employment/termination notification is required within 10 days" "What is an example of when a smog check is NOT needed? - CORRECT ANSWER A wholesale transaction selling one vehicle to another dealer through the dealer auction" "Once a dealer gets a smog check for a vehicle in inventory, how long is the smog check valid? - CORRECT ANSWER 2 years" "When can you run a customer credit report? - CORRECT ANSWER Only when you have their signature permitting you to do so" "What is the most a dealer can charge a retail buyer for smog fee? - CORRECT ANSWER $50 plus $8.25 certificate fee" "How many cars can a private individual legally sell per year without the intent to profit? - CORRECT ANSWER 5 cars" "What must be done with the buyer's guide? - CORRECT ANSWER Buyer's guide must be placed where it is visible from outside the vehicle, Buyer's guide must be signed by buyer, Buyer's guide must be presented in any language spoken to the customer" "What is the minimum sign size requirement for the established place of business? - CORRECT ANSWER Minimum 2 sq feet and can be read from 50 feet away" "When must the dealer complete another dealer continuing education class? - CORRECT ANSWER After One Year, then Every 2 Years" "Sales or use tax is levied on which of the following items? - CORRECT ANSWER Selling Price, Smog Inspection Fee, Document Fee" "What will happen if you don't pay the Administrative Service Fee ( ASF )? - CORRECT ANSWER DMV will send you a notice, if it has not been paid ASF will charged against your bond" "Any Retail Consignment agreement must include the following: - CORRECT ANSWER Assign responsibility for safety inspection & cost of repairs, Complete vehicle description including odometer reading, Duration of the consignment agreement, any outstanding liens, and current market value" "How many days is the cooling off period allowed under contract cancellation option regulation? - CORRECT ANSWER 2 Dealer posted business days" "How much time does the DMV have to tell you if they accept or deny your application? - CORRECT ANSWER 120 Days" "What is the minimum time allowed for the contract cancellation option? - CORRECT ANSWER 48 hours" "Who must be offered the contract cancellation option? - CORRECT ANSWER Every retail buyer w/ cash price less than 40k" "What is the maximum contract cancellation option fee a dealer may charge for a $28,000 vehicle? - CORRECT ANSWER $250" "When may the option fee be waived? - CORRECT ANSWER Anytime at the dealers discretion" "What is the minimum allowable miles if the buyer purchases the cancellation option? - CORRECT ANSWER 250" "What is the maximum total option and restocking fee allowed? - CORRECT ANSWER $500" "What is the definition of a full refund? - CORRECT ANSWER total price minus option and restocking fee" "Which of the following must be displayed in a retail location? - CORRECT ANSWER Contract Cancellation Option notice, Inspection of vehicle notice, No cooling off period notice" "Under AB 68, when the buyer elects to purchase the cancellation option the dealer must? - CORRECT ANSWER Perform a written inspection report" "Under AB 68, when the buyer elects to exercise the return option the dealer must? - CORRECT ANSWER Perform a written inspection report" "The new law, AB 68 increases the penalties for failure to disclose to? - CORRECT ANSWER Misdemeanor" "When must a dealer make a credit score disclosure? - CORRECT ANSWER Whenever the dealer runs a credit check" "What is the maximum allowable dealer markup for loan assignment on a 60 month contract? - CORRECT ANSWER 2.5 %" "What advertising terms under AB 68 have new requirements? - CORRECT ANSWER certified" "Under AB 68, when may a flood vehicle me sold as " certified" ? - CORRECT ANSWER Never" "Under AB 68, when may a lemon law buyback car be sold as "certified"? - CORRECT ANSWER Never" "Under AB 68, when a dealer advertises a" certified " vehicle the dealer must maintain? - CORRECT ANSWER A vehicle certification program" "How many credit score disclosures must be presented? - CORRECT ANSWER One for each credit agency contacted" "How many disclosures are required for dealer add-ons? - CORRECT ANSWER One for each item, with a total for all add-ons" "Under AB 68, when a dealer Return the trade-in rejects an optioned return the dealer must? - CORRECT ANSWER Issue a written explanation for rejection" "How many days does a dealer have to return corrections to DMV, not counting the date of sale? - CORRECT ANSWER 50 days" "What is the dollar amount of penalty, ASF, when a dealer fails to send the 5 day notice? - CORRECT ANSWER $5" "What is the dollar amount of penalty, ASF, when a dealer fails to post the correct notice in the vehicle? - CORRECT ANSWER $5" "What is the dollar amount of penalty, ASF, when a dealer fails to send the documents to DMV within 30 days? - CORRECT ANSWER $5" "What is the dollar amount of penalty, ASF, when a dealer fails to complete the transaction within 50 days? - CORRECT ANSWER $25" "What is the dollar amount of a ONE WAY permit when a dealer sends a vehicle out of state? - CORRECT ANSWER $19" "What is the dollar amount of a quick title request? - CORRECT ANSWER $15" "How quickly is a quick title issued? - CORRECT ANSWER 72 hours" "What is the minimum percentage of brake pad allowable to pass the Division 12 safety inspection? - CORRECT ANSWER 30%" "What is the minimum depth of tire tread allowable to pass the Division 12 safety inspection? - CORRECT ANSWER 2/32"" "What is the maximum mileage to register a vehicle without having to pass a smog inspection? - CORRECT ANSWER 7500 miles" "What percentage of the price do you use to figure the monthly tax basis for personal use of the dealer plate? - CORRECT ANSWER 1/40" "What percentage of the price do you use to figure the salesperson's monthly tax basis for personal use of the dealer plate? - CORRECT ANSWER 1/60" "When a dealer places an ad, the license plate or how many of the VIN must be used in the ad ? - CORRECT ANSWER Last 6" "When a dealer sells a vehicle, how much time is allowed to make notification to remove the ad? - CORRECT ANSWER 48 hours" "When a dealer hires or fires a vehicle salesperson how much time is allowed to notify DMV? - CORRECT ANSWER 10 days" "How often must the license be renewed with the DMV? - CORRECT ANSWER Every 2 years" "How much bond is required for retail sales? - CORRECT ANSWER $50,000" "How much bond is required for wholesale? - CORRECT ANSWER Varies by sales volume" "When may a lesser bond of $ 10,000. be allowed? - CORRECT ANSWER Wholesale < 25/ year" "How much grace time is allowed for license or bond renewal? - CORRECT ANSWER None" "How often must the dealer attend training for license renewal? - CORRECT ANSWER Every 2 years" "Who should attend training for license renewal? - CORRECT ANSWER Owner" "When may a class exemption be granted? - CORRECT ANSWER Wholesale < 50/ year" "If not the owner, who is required to attend training for license renewal? - CORRECT ANSWER Manager with Salesperson License" "What must the dealer do when showing buyer's guide to a buyer? - CORRECT ANSWER Obtain buyer signature and give them а сору" "Who is required to sign the conditional sales contract? - CORRECT ANSWER Both Buyer and Seller" "What must the dealer do if he is unable to provide financing for the buyer? - CORRECT ANSWER Return all money & the trade-in" "What must the dealer do when a buyer has added accessories prior to delivery and backs out? - CORRECT ANSWER Return all money" "The DMV applies penalties called ASF's. The term ASF means? - CORRECT ANSWER Administrative Service Fee" "What must the dealer do when selling to a Spanish speaking customer? - CORRECT ANSWER Attach Spanish copy to English sales contract" "The DMV notice of the retail ROS must be posted within how many calendar days to avoid a $5 ASF? - CORRECT ANSWER 5 days" "The DMV fees due on the retail ROS must be posted within how many calendar days to avoid a $25 ASF? - CORRECT ANSWER 50 days" "The documents on the retail ROS must be posted within how many calendar days to avoid a $ 5 ASF? - CORRECT ANSWER 30 days" "What must the dealer submit with every retail sale? - CORRECT ANSWER REG 262 (bill of sale)" "What must the dealer do if he collects too much money from the buyer? - CORRECT ANSWER Return the excess" "What does the Federal Division 12 rules for retail delivery require? - CORRECT ANSWER Implied Warranty" "What does compliance with the Federal Division 12 rules for retail delivery certify? - CORRECT ANSWER Minimum safety standard has been met"