COMPLETE EXAM GUIDE - the enforcement of vehicle safety standards in ...

DMV

Car Dealer License

COMPLETE EXAM GUIDE

• / 3

1. Question: Which of the following regulatory bodies oversees

the enforcement of vehicle safety standards in the U.S.?

• Federal Trade Commission (FTC)
• Environmental Protection Agency (EPA)
• National Highway Traffic Safety Administration (NHTSA)
• Securities and Exchange Commission (SEC)

Answer: C) National Highway Traffic Safety Administration

(NHTSA)

Rationale: NHTSA is responsible for setting and enforcing

vehicle safety standards.

2. Question: What is the primary purpose of the Truth in

Lending Act (TILA) in vehicle financing?

• To provide consumers with leasing options
• To require full disclosure of credit terms
• To regulate auto dealerships’ advertising practices
• To promote electric vehicle sales

Answer: B) To require full disclosure of credit terms

Rationale: TILA mandates clear disclosure of credit terms to

protect consumers in financing transactions. 2 / 3

3. Question: Under the Dealer Franchise Rule, which statement

is true regarding termination of a dealership agreement?

• A dealer can be terminated without cause.
• A dealer must be provided written notice and an opportunity

to cure.

• Termination does not require any notice.
• A dealer can appeal to the FTC after termination.

Answer: B) A dealer must be provided written notice and an

opportunity to cure.

Rationale: The rule requires dealers to receive appropriate

notice and a chance to correct any issues.

4. Question: In compliance with the Fair Credit Reporting Act

(FCRA), which document must a dealership provide if a credit application is denied based on a consumer’s credit report?

• Purchase Agreement
• Adverse Action Notice
• Vehicle Sales Receipt
• Credit Score Disclosure

Answer: B) Adverse Action Notice

• / 3