YOUR GATEWAY TO ACADEMIC EXCELLENCE
AFIP Certification Exam Questions And
Answers 2025/2026 [100% Correct]
, YOUR GATEWAY TO ACADEMIC EXCELLENCE
(True/False): Ignorance of the law will shield you from liability if you are noncompliant. -
✓✓-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. - ✓✓-True
In a typical credit transaction the (bank)/(dealer) is the creditor. - ✓✓-The dealer is the
creditor
What is a contract? - ✓✓-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: - ✓✓-
1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - ✓✓-
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: - ✓✓-
1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - ✓✓-
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 - ✓✓-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. - ✓✓-$500
What is required in order for the parties (the individuals entering into the contract) to
have "legal capacity?" - ✓✓-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: - ✓✓-1. The need for a written
agreement under the Statute of Frauds and certain provisions of the Uniform
Commercial Code (U.C.C.)
, YOUR GATEWAY TO ACADEMIC EXCELLENCE
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? - ✓✓-The requirement that each
party to the contract receives something of value in exchange for what is given.
Finance Charge - ✓✓-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 - ✓✓-
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
4 Key Sections of an installment sale contract - ✓✓-
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 - ✓✓-Promise to Pay - This section outlines the purpose of the
transaction and the primary obligations that will be incurred from signing the contract.
The difference between full or partial recourse and no recourse assignments. - ✓✓-
Essentially determines the length of time, if any, the seller is responsible for the actions
of the buyer.
Warranty disclaimers do not apply to _______ warranties on new or used vehicles to
which that warranty still applies. - ✓✓-Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding balance due
and payable. - ✓✓-Acceleration
As recorded on an installment sale agreement, the total sale price or deferred contract
price would be the total of the ________. - ✓✓--Payments
-Downpayment
-Net Trade-In
, YOUR GATEWAY TO ACADEMIC EXCELLENCE
Which is NOT listed as a mandated TILA box disclosure? - ✓✓-Holder-in-Due Course
Notice
In most states, the _______ is deemed to be part of the purchase agreement. - ✓✓-
Buyer's Guide
(True/False) Because the late charges that may be imposed on an installment sale
agreement are regulated at the state level, the amount of the late charge is NOT a
required disclosure item. - ✓✓-False
At the time of consummation, an installment sale contract is between the _______ and
the _______. - ✓✓-Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transactions for vehicles
purchased for what type(s) of uses? - ✓✓-Personal, Family or Household
What is always the largest number on an installment sale agreement? - ✓✓-The total
sale price
What does "force-placed" or "creditor-placed" mean? - ✓✓-Allows the creditor to force
place insurance - that is, buy physical damage insurance to cover the creditor's interest
in the vehicle or the creditor's and the buyer's interest in the vehicle if the buyer fails to
do so.
(True/False) Installment sale agreements notify the customer of the state's laws
regarding repossession and how (if applicable) the customer can redeem the vehicle or
reinstate the contract. - ✓✓-True
How are installment sale contracts regulated? - ✓✓-By federal and state law
(True/False) If the vehicle is declared a total loss, the creditor may claim the proceeds
from the physical damage insurance. - ✓✓-True
Closed-End Credit - ✓✓-A fixed amount of money borrowed for a specified period of
time, such as for home mortgages, vehicle purchases and other types of installment-
based financing.
Closed-End Credit Terminology (Customer Arranged) - ✓✓-Transaction -- Loan
Document -- Note
Cost of Credit -- Interest
Cost of credit stated as -- APR
Parties to the agreement -- Lender- customer
Closed-End Credit Terminology (Dealer Arranged) - ✓✓-Transaction -- Credit Sale
Document -- Installment Sale Agreement
AFIP Certification Exam Questions And
Answers 2025/2026 [100% Correct]
, YOUR GATEWAY TO ACADEMIC EXCELLENCE
(True/False): Ignorance of the law will shield you from liability if you are noncompliant. -
✓✓-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. - ✓✓-True
In a typical credit transaction the (bank)/(dealer) is the creditor. - ✓✓-The dealer is the
creditor
What is a contract? - ✓✓-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: - ✓✓-
1. Offer
2. Acceptance
3. Consideration
An offer consists of three elements: - ✓✓-
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: - ✓✓-
1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - ✓✓-
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 - ✓✓-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. - ✓✓-$500
What is required in order for the parties (the individuals entering into the contract) to
have "legal capacity?" - ✓✓-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: - ✓✓-1. The need for a written
agreement under the Statute of Frauds and certain provisions of the Uniform
Commercial Code (U.C.C.)
, YOUR GATEWAY TO ACADEMIC EXCELLENCE
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? - ✓✓-The requirement that each
party to the contract receives something of value in exchange for what is given.
Finance Charge - ✓✓-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 - ✓✓-
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
4 Key Sections of an installment sale contract - ✓✓-
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 - ✓✓-Promise to Pay - This section outlines the purpose of the
transaction and the primary obligations that will be incurred from signing the contract.
The difference between full or partial recourse and no recourse assignments. - ✓✓-
Essentially determines the length of time, if any, the seller is responsible for the actions
of the buyer.
Warranty disclaimers do not apply to _______ warranties on new or used vehicles to
which that warranty still applies. - ✓✓-Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding balance due
and payable. - ✓✓-Acceleration
As recorded on an installment sale agreement, the total sale price or deferred contract
price would be the total of the ________. - ✓✓--Payments
-Downpayment
-Net Trade-In
, YOUR GATEWAY TO ACADEMIC EXCELLENCE
Which is NOT listed as a mandated TILA box disclosure? - ✓✓-Holder-in-Due Course
Notice
In most states, the _______ is deemed to be part of the purchase agreement. - ✓✓-
Buyer's Guide
(True/False) Because the late charges that may be imposed on an installment sale
agreement are regulated at the state level, the amount of the late charge is NOT a
required disclosure item. - ✓✓-False
At the time of consummation, an installment sale contract is between the _______ and
the _______. - ✓✓-Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transactions for vehicles
purchased for what type(s) of uses? - ✓✓-Personal, Family or Household
What is always the largest number on an installment sale agreement? - ✓✓-The total
sale price
What does "force-placed" or "creditor-placed" mean? - ✓✓-Allows the creditor to force
place insurance - that is, buy physical damage insurance to cover the creditor's interest
in the vehicle or the creditor's and the buyer's interest in the vehicle if the buyer fails to
do so.
(True/False) Installment sale agreements notify the customer of the state's laws
regarding repossession and how (if applicable) the customer can redeem the vehicle or
reinstate the contract. - ✓✓-True
How are installment sale contracts regulated? - ✓✓-By federal and state law
(True/False) If the vehicle is declared a total loss, the creditor may claim the proceeds
from the physical damage insurance. - ✓✓-True
Closed-End Credit - ✓✓-A fixed amount of money borrowed for a specified period of
time, such as for home mortgages, vehicle purchases and other types of installment-
based financing.
Closed-End Credit Terminology (Customer Arranged) - ✓✓-Transaction -- Loan
Document -- Note
Cost of Credit -- Interest
Cost of credit stated as -- APR
Parties to the agreement -- Lender- customer
Closed-End Credit Terminology (Dealer Arranged) - ✓✓-Transaction -- Credit Sale
Document -- Installment Sale Agreement
