CAR DEALER LICENSE PRACTICE TEST PAPER
2026 EXAM QUESTIONS WITH SOLUTIONS
GRADED A+
● When a dealer sells a vehicle that was consigned to them to sell, they
must:
a. Provide the seller an accounting and payment within 20 days of the
sale
b. Test drive it before agreeing to sell it
c. Provide a warranty
d. None of the above. Answer: a. Provide the seller an accounting and
payment within 29 days of the sale.
● Which of the following are permitted methods for computing interest
rate?
a. The Pre-Computed Basis Method
b. The Simple Interest Basis Method
c. The Friedman Method
d. Both A and B. Answer: d. Both A and B
, ● What is the maximum a dealer may charge a customer for a smog
test?. Answer: $50.00
● What is the basic DMV transfer fee to transfer the title into the buyer's
name?. Answer: $15.00
● If the buyer defaults on a Conditional Sales Contract, the dealer may,
subject to proper notification to the buyer:
a. Accelerate the amount do
b. Repossess vehicle
c. Sell the vehicle
d. All of the above. Answer: d. All of the above
● Which of the following are taxable in a vehicle sales transaction?
a. Document preparation fee
b. $50 smog fee paid to seller/dealer
c. Both A and B
d. Insurance fees. Answer: c. Both A and B
● Which of the following are not taxable in a vehicle sales transaction?
2026 EXAM QUESTIONS WITH SOLUTIONS
GRADED A+
● When a dealer sells a vehicle that was consigned to them to sell, they
must:
a. Provide the seller an accounting and payment within 20 days of the
sale
b. Test drive it before agreeing to sell it
c. Provide a warranty
d. None of the above. Answer: a. Provide the seller an accounting and
payment within 29 days of the sale.
● Which of the following are permitted methods for computing interest
rate?
a. The Pre-Computed Basis Method
b. The Simple Interest Basis Method
c. The Friedman Method
d. Both A and B. Answer: d. Both A and B
, ● What is the maximum a dealer may charge a customer for a smog
test?. Answer: $50.00
● What is the basic DMV transfer fee to transfer the title into the buyer's
name?. Answer: $15.00
● If the buyer defaults on a Conditional Sales Contract, the dealer may,
subject to proper notification to the buyer:
a. Accelerate the amount do
b. Repossess vehicle
c. Sell the vehicle
d. All of the above. Answer: d. All of the above
● Which of the following are taxable in a vehicle sales transaction?
a. Document preparation fee
b. $50 smog fee paid to seller/dealer
c. Both A and B
d. Insurance fees. Answer: c. Both A and B
● Which of the following are not taxable in a vehicle sales transaction?
