Motor Vehicle Division FREE Motor Vehicle Division Dealer Operations and Compliance Questions and Answers 3

Question 1

What is the purpose of the dealer's established place of business requirement enforced by most MVDs?

Accepted Answer

To ensure the dealer has a permanent, publicly accessible location for consumer transactions and record inspection

Answer

To require dealers to own commercial real estate

Answer

To limit the number of dealers in a geographic area

Answer

To ensure dealers have at least ten vehicles on display

Question 2

Which action would most likely constitute an unfair or deceptive trade practice by a motor vehicle dealer?

Accepted Answer

Advertising a vehicle at a specific price but adding undisclosed mandatory fees at the time of sale

Answer

Offering a vehicle below the manufacturer's suggested retail price

Answer

Providing a free vehicle history report to prospective buyers

Answer

Displaying the dealer license number on advertisements

Question 3

How often are licensed motor vehicle dealers typically required to renew their dealer license?

Accepted Answer

Annually

Answer

Every five years

Answer

Monthly

Answer

A dealer license never expires once issued

Question 4

What document must a dealer provide to a buyer that outlines all charges, fees, and terms of a vehicle sale?

Accepted Answer

An itemized purchase agreement or bill of sale

Answer

A buyer's guide window sticker only

Answer

A verbal summary of the transaction

Answer

The vehicle's original factory invoice

Question 5

What is a common consequence for a dealer who engages in odometer tampering or rollback?

Accepted Answer

Criminal prosecution and permanent license revocation

Answer

A written warning with no further action

Answer

A requirement to attend a one-hour training seminar

Answer

Temporary suspension of advertising privileges only

Question 6

When a dealer takes a trade-in vehicle, what financial obligation must be addressed if the trade-in still has an outstanding lien?

Accepted Answer

The dealer must pay off the existing lien to obtain a clear title before reselling the vehicle

Answer

The lien automatically transfers to the new buyer

Answer

The dealer can ignore the lien if the trade-in value exceeds the loan balance

Answer

The previous lender must forgive the remaining balance