VA Sales License Test Flashcards

Questions and Answers

If a vehicle is to be titled out of state and the purchaser does not have the required liability insurance, what must the dealer do?

Return the vehicle to the manufacturer

Provide full insurance coverage

Issue a permanent title

Collect 1/12 of the uninsured motorist fee and submit to DMV (correct)

The line item 'Balance Due at Settlement' on the buyer's order is used in:

Cash transactions only

Finance transactions only

Both cash and finance transactions (correct)

None of the above

When is a completed buyer's order considered legally binding?

Both parties agree on a price and sign the buyer's order.

A dealer can occasionally rent a vehicle without a rental license.

False Signup and view all the answers

The sales and use tax for a good will substitution is refundable.

False Signup and view all the answers

To whom is the sales tax on a warranty or service agreement sold to a customer paid?

The Virginia Department of Taxation. Signup and view all the answers

Temporary Supplemental Sales (Off-Site Sales) applications (MVDB 22) must be received at MVDB __________ days prior to the off-site sale.

15 Signup and view all the answers

How many years is a dealership required to maintain proof that a Virginia Safety Inspection was performed prior to sale at retail?

5 years. Signup and view all the answers

What is the penalty for violating the disclosure provisions of the Virginia Dealer Licensing Act's 'As Is' law?

A $1000 civil penalty; the customer may return the vehicle. Signup and view all the answers

Vehicles can be sold in Virginia 'As Is' if:

All of the above. Signup and view all the answers

When must a vehicle be inspected?

Between the time it comes into a dealer's inventory and the time it is sold at retail. Signup and view all the answers

What happens if a vehicle does not pass inspection?

Both B and C. Signup and view all the answers

What license must a dealer have to buy and sell motorcycles, trailers, and motor homes?

License issued by MVDB. Signup and view all the answers

Under what conditions may a second set of temporary tags be issued?

All of the above. Signup and view all the answers

When issuing temporary license plates, the dealer may charge the customer more than the fee charged to the dealer for the plates.

False Signup and view all the answers

How long may temporary transport plates be issued for?

5 days. Signup and view all the answers

A salesperson's 'certificate of qualification' must be obtained before applying for a salesperson's license.

True Signup and view all the answers

What are the penalties for violating the statutes pertaining to motor vehicle salespersons?

All of the above. Signup and view all the answers

Define a new motor vehicle.

Both B and C. Signup and view all the answers

What must any person licensed in another state obtain to sell vehicles at Dealer Only wholesale auctions in Virginia?

Certificate of registration. Signup and view all the answers

Who must be licensed to engage in business in Virginia?

All of the above. Signup and view all the answers

No salesperson shall be employed by more than one dealer unless the dealerships are owned by the same person.

True Signup and view all the answers

Each dealership must post a list of the salespersons that work there.

True Signup and view all the answers

Salespersons must carry their license at all times and show it when asked.

True Signup and view all the answers

What must temporary certificates of registration issued by dealers contain?

All of the above. Signup and view all the answers

If you do not renew your salesperson's license by the expiration date, you cannot sell motor vehicles until a current license has been obtained.

True Signup and view all the answers

What can happen if a salesperson is found guilty of violating Virginia Dealer Laws?

All of the above. Signup and view all the answers

What must happen if a customer wishes to demonstrate a vehicle in the inventory of the dealer?

Both A and B. Signup and view all the answers

The Motor Vehicle Transportation Recovery Fund is funded by whom?

Dealers and salespersons. Signup and view all the answers

What is the purpose of the Motor Vehicle Transaction Recovery Fund?

To satisfy unpaid judgments against a dealer or salesperson that has defrauded a purchaser. Signup and view all the answers

When must the dealer or salesperson reimburse the Motor Vehicle Transaction Recovery Fund?

Within 30 days or the dealer's or salesperson's license is automatically revoked. Signup and view all the answers

What is a temporary certificate of registration?

Both A and B. Signup and view all the answers

Temporary license plates should be destroyed after expiration or when permanent plates are issued.

True Signup and view all the answers

Payments to individuals by a salesperson for procuring a customer are lawful.

False Signup and view all the answers

Used vehicles in the inventory of a dealer without a Virginia inspection sticker can be operated on the highway.

False Signup and view all the answers

Within how many days must applications, taxes, and fees collected be submitted to the DMV?

30 days. Signup and view all the answers

What is the penalty for registering a vehicle in Virginia without liability insurance?

$600 uninsured motorist fee. Signup and view all the answers

When a thirty-day tag is issued to a customer without insurance, the dealer must:

Both A and B. Signup and view all the answers

Temporary Tags and Temporary Transport Tags can be loaned to another dealer.

False Signup and view all the answers

What defines a 'Demonstrator' vehicle?

Both A and B. Signup and view all the answers

Regarding 'Internet employees,' what are the regulations?

Both A and B. Signup and view all the answers

What is an 'Open Title'?

One that has been signed by the title's owner leaving blank information on the buyer. Signup and view all the answers

On extended service contracts, what must the dealer collect?

Retail sales tax on one half of the retail cost. Signup and view all the answers

The IRS definition of 'cash' includes personal checks.

False Signup and view all the answers

What personal penalties can result from the IRS Cash Reporting Rule?

All of the above. Signup and view all the answers

What does the anti-structuring provision of the IRS Cash Reporting Rule prohibit?

Advising customers on how to get around the rule. Signup and view all the answers

In financing a vehicle on an installment sales contract, what does APR stand for?

Annual Percentage Rate. Signup and view all the answers

Finance charges must be stated in:

Annual Percentage Rate. Signup and view all the answers

Full disclosure of credit terms must be made before a sale is consummated.

True Signup and view all the answers

What is required to be disclosed under Regulation Z of the Consumer Credit Protection Act?

All of the above. Signup and view all the answers

If a financing company denies a loan application, what must it provide the applicant?

A written statement explaining the reason for denial within 30 days. Signup and view all the answers

When can an inquiry be made of a credit-reporting bureau?

When the customer signs a credit application. Signup and view all the answers

Which charges must be disclosed to the customer when financing an automobile under the Truth in Lending Act?

Annual Percentage Rate. Signup and view all the answers

When must the end date of a sale be included in advertisements?

It must always be stated. Signup and view all the answers

In any advertisement placed by a dealer, the advertisement must give the dealer's name or 'VADLR' must be used.

True Signup and view all the answers

A dealer's processing fee must be disclosed in an advertisement when the advertised prices include the processing fee.

False Signup and view all the answers

Advertisements placed on television, radio, or the internet are subject to the Advertising Laws.

True Signup and view all the answers

What must advertisements for internet sales comply with?

The same advertising guidelines as print or television. Signup and view all the answers

Advertisements placed on social media platforms are not subject to the Advertising Laws.

False Signup and view all the answers

What is the Federal Trade Commission Used Car Rule known for?

The buyers guide window sticker rule. Signup and view all the answers

The Buyers Guide must be placed on a vehicle before it is offered for sale.

True Signup and view all the answers

A Buyers Guide must be placed on which types of vehicles?

All of the above. Signup and view all the answers

Where is the Buyers Guide attached?

In a conspicuous place so both sides can be seen. Signup and view all the answers

What does the Federal Trade Commission Used Car Rule state about vehicles offered at public auctions?

A guide must be on the vehicle if the auction is open to the public. Signup and view all the answers

Under the Federal Trade Commission Used Car Rule, a vehicle can be sold 'As Is' if:

The 'As Is-No Dealer Warranty' box on the Buyers Guide is checked. Signup and view all the answers

What is the penalty for violating the Federal Trade Commission Used Car Rule?

Over $40,000 plus CPI. Signup and view all the answers

Full and Limited are terms given to what?

Warranties. Signup and view all the answers

What is considered an unfair and deceptive practice under the Federal Trade Commission Used Car Rule?

Representing that a used automobile is sold with a warranty when it's not. Signup and view all the answers

According to the Federal Trade Commission Used Car Rule, dealers must display conspicuously on each used car a:

Buyers Guide. Signup and view all the answers

Where should the Buyers Guide be displayed?

Both A and B. Signup and view all the answers

A dealer must make a copy of the written warranty available for the customer to read prior to the sale.

True Signup and view all the answers

A dealer can sell a vehicle 'As Is' or without a warranty in Virginia.

True Signup and view all the answers

Under the Federal Trade Commission Used Car Rule, the terms of the warranty as stated on the Buyers Guide:

Can be changed and noted on the original Guide. Signup and view all the answers

When giving a warranty on a used vehicle, the dealer must:

Both A and B. Signup and view all the answers

What must be included on the Buyers Guide?

Purchaser's signature. Signup and view all the answers

If a retail installment contract is not approved and the deal is canceled, what must you return?

The customer's trade-in. Signup and view all the answers

The reverse of the Buyers Guide must be signed in every retail sale of a used vehicle.

True Signup and view all the answers

What does an 'A' after the odometer reading indicate?

Actual miles driven. Signup and view all the answers

What does the term 'mileage' mean as used in the Truth In Mileage Act?

The actual distance the vehicle has been driven. Signup and view all the answers

What does an 'E' after the odometer reading signify?

Mileage in excess of odometer's mechanical limits. Signup and view all the answers

Which statements are true regarding the Truth In Mileage Act?

All of the above. Signup and view all the answers

The customer must receive a copy of the odometer statement.

True Signup and view all the answers

An 'N' after the odometer reading means the reading is not actual.

True Signup and view all the answers

What must be included in the written statement regarding the mileage of a leased vehicle?

All of the above. Signup and view all the answers

Under Federal law, how can a customer receive a copy of the odometer disclosure statement?

A and B only. Signup and view all the answers

When is a Power of Attorney (Form VAD-70) used?

Both A and B. Signup and view all the answers

What does Section 'B' on a Power of Attorney (Form VAD-70) cover?

Vehicle sold prior to the dealer receiving the title. Signup and view all the answers

What is required in Section 'C' on the Power of Attorney (Form VAD-70)?

Both A and B. Signup and view all the answers

What is the 'Processing Fee'?

A charge by the dealer for processing a transaction. Signup and view all the answers

If a dealer charges a processing fee, what must they do?

Both A and B. Signup and view all the answers

What is the dealer processing fee subject to?

Sales tax. Signup and view all the answers

A salesperson may use a dealer plate if they work at least 25 hours a week and are compensated.

True Signup and view all the answers

Dealer license plates may be used on vehicles that:

Are in the inventory of the dealer. Signup and view all the answers

How long may a dealer allow prospective purchasers to use dealer license plates?

Up to 5 days, and may be renewed once. Signup and view all the answers

After the DSD 27 form is complete, dealer plates can be used on a vehicle in a dealer's inventory:

Both A and B. Signup and view all the answers

How long can the form granting permission to use dealer's plates be issued for?

5 days and may be renewed for another 5 days. Signup and view all the answers

When may dealer plates be used on consignment vehicles?

If the vehicle is on consignment from another dealer. Signup and view all the answers

What is the maximum period a person authorized by the dealer can transport a vehicle on a dealer plate?

24 hours. Signup and view all the answers

What does a vehicle identification number (VIN) consist of?

17 alpha numeric characters. Signup and view all the answers

Which character in VIN identifies the model year?

10th character. Signup and view all the answers

Study Notes

Virginia Dealer Licensing Act - Key Points

Penalty for Disclosure Violation: A civil penalty of $1,000; customer may return the vehicle.
"As Is" Sale Conditions: Requires a completed buyer's guide, prior written disclosure to the buyer, and proper disclosure on the buyer's order.
Vehicle Inspection Requirement: Must be inspected before retail sale.
Inspection Failure Options: Dealers can bring vehicles into compliance or sell with a rejection sticker and written disclosure.
Dealer Licensing for Motorcycles and Trailers: Franchise or independent dealers must have the appropriate MVDB license.

Temporary and Sales Practices

Issuance of Temporary Tags: A second set can be issued under specific conditions, such as title unavailability or out-of-state registration.
Fees for Temporary Plates: Dealers cannot charge more than their cost for temporary plates.
Temporary Transport Plates: Limited to 5 days of use.

Salesperson Licenses and Penalties

Salesperson's Certificate: Must be obtained prior to applying for a salesperson's license.
Violation Penalties: Up to $1,000 per violation; potential suspension or revocation of the license.

Vehicle Classification and Registration

Definition of a New Vehicle: Must not have been previously titled and have less than 7,500 miles.
Out-of-State Dealers: Must obtain a certificate of registration to sell in Virginia.

Dealer and Salesperson Regulations

Required Licensing: Includes motor vehicle dealer, distributor, manufacturer, and salesperson.
Employment Restrictions: Salespersons may only work for one dealer at a time, unless ownership is the same.
Salesperson License Display: Must be carried and shown upon request.

Buyers Guide and Advertising Regulations

Buyer’s Guide Requirements: Must be displayed before a vehicle is sold; includes the option for "As Is" sales.
Advertising Laws Compliance: All advertisements must include dealer identification and truthfully represent sales conditions.
Disclosure Obligations: Financial terms must be disclosed prior to the sale, including the annual percentage rate (APR).

Odometer Disclosure and Vehicles

Odometer Terms: Must include "actual miles," "exceeds mechanical limits," and "not actual mileage" indicators.
Truth in Mileage Act: Requires both buyer and seller signatures on odometer statements.

Processing Fees and Taxes

Dealer Processing Fees: Must be registered with MVDB and visible to the public; subject to sales and use tax.
Tax Refund Policy: Sales and use tax on goodwill substitutions is not refundable.

Temporary Off-Site Sales

Temporary Off-Site Sales Licensing: Requires application submission 15 days in advance; only 8 such sales allowed per year.

Importance of Record Keeping

Inspection Records: Must be maintained for 5 years post-sale as proof of safety inspections.

Fund and Recovery Provisions

Motor Vehicle Transaction Recovery Fund: Aimed at satisfying judgments against fraudulently acting dealers or salespersons; dealers must reimburse within 30 days.

These notes provide a concise overview of key facts and rules essential for the VA dealer licensing exam preparation.

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Description

Prepare for the Virginia Sales License exam with these flashcards focused on key regulations of the Virginia Dealer Licensing Act, specifically the 'As Is' law. Test your knowledge on the penalties for violations and the conditions for selling vehicles 'As Is'.