AFIP Basic Certification Course – AFIP –
Practice Questions with Answers and
Complete Exam Preparation Material
Introduction:
This document contains 151 practice questions and answers for
the AFIP Basic Certification Course, covering key federal
regulations affecting automotive finance and insurance (F&I)
professionals. It includes comprehensive material on
TILA/Regulation Z, CLA/Regulation M, ECOA/Regulation B,
FCRA, the Used Car Rule, Risk-Based Pricing, UDAP/UDAAP,
and advertising compliance.
The content focuses on compliance requirements, disclosure
obligations, criminal and civil penalties, contract law
fundamentals, and dealership best practices. It is structured in
a true/false and multiple-choice format, making it ideal for
exam preparation and certification review.
Exam Questions and Answers:
1. (True/False)According to Regulation Z, down payment
and total sale price must be dis- closed.-Answer:- True
2. (True/False)Any communication to a single individual -
verbally or in writing does not meet standards for an
advertisement.-Answer:- True
,3. (True/False)General phrase such as:Zero APR, no
downpayment, or financing available does meet the standards
for an ad.-Answer:- False
4. (True/False)A violation of the advertising rules may
result in a cease and desist order.-Answer:- True
5. (True/False)A potential fine of up to $43,792 per day /
per violation - if the cease and desist order is ignored - plus
potential UDAP action at the state level.-Answer:- True
6. (True/False)The dealer is liable for the actions of the
advertisement agency.-Answer:- True
7. What is the correct way to record negative equity on an
installment sale agreement and when the negative equity is
greater than the amount paiddown?-Answer:- A. Deduct the
cash down amount from the negative equity, record the down
payment on the contract as zero, and record the amount still
owed on the trade as an additional amount financed.
8. Which of the dollar amounts listed in the TILA box
disclosures are included in the Total Sale Price?-Answer:- D.
All of the above
9. (True/False)A principal purpose of TILA is to promote the
informed use of customer credit by requiring disclosures about
its terms and cost.-Answer:- True
, 10. The TILA/Reg. Z states that the customer must take
possession of the Retail Installment Sale Agreement prior to it
being disclosed.
Which of the following "best practice" steps should be
followed?-Answer:- D. All of the above
11. (True/False)A situation exists that requires the customer
to be re-contracted and sign a new Retail Installment Sale
Agreement five days after consummating the deal.
If the reconstruct period is less than seven business days, the
date recorded on the initial installment sale agreement can be
used for the second agreement.--Answer:- False
12. The TILA disclosures must be given prior to the
consummation and in a form the customer can keep. Best
practices dictate that -Answer:- B. you give a completely
filled in (but not executed) installment sale contract to the
buyer so the buyer has control of the contract and can review
its contents.
13. Which of the following is/are advertisement triggering
term(s) for a lease ad?-Answer:- D. All of the above
14. Which of the following are considered criminal violations
of TILA/Reg. Z?-Answer:- D. All of the above
15. A dealer receives a cease and desist order for an ad they
ran that violated TILA/Reg. Z.If that dealership continues to
run the ad, what are the potential penalties?-Answer:- C. The
Practice Questions with Answers and
Complete Exam Preparation Material
Introduction:
This document contains 151 practice questions and answers for
the AFIP Basic Certification Course, covering key federal
regulations affecting automotive finance and insurance (F&I)
professionals. It includes comprehensive material on
TILA/Regulation Z, CLA/Regulation M, ECOA/Regulation B,
FCRA, the Used Car Rule, Risk-Based Pricing, UDAP/UDAAP,
and advertising compliance.
The content focuses on compliance requirements, disclosure
obligations, criminal and civil penalties, contract law
fundamentals, and dealership best practices. It is structured in
a true/false and multiple-choice format, making it ideal for
exam preparation and certification review.
Exam Questions and Answers:
1. (True/False)According to Regulation Z, down payment
and total sale price must be dis- closed.-Answer:- True
2. (True/False)Any communication to a single individual -
verbally or in writing does not meet standards for an
advertisement.-Answer:- True
,3. (True/False)General phrase such as:Zero APR, no
downpayment, or financing available does meet the standards
for an ad.-Answer:- False
4. (True/False)A violation of the advertising rules may
result in a cease and desist order.-Answer:- True
5. (True/False)A potential fine of up to $43,792 per day /
per violation - if the cease and desist order is ignored - plus
potential UDAP action at the state level.-Answer:- True
6. (True/False)The dealer is liable for the actions of the
advertisement agency.-Answer:- True
7. What is the correct way to record negative equity on an
installment sale agreement and when the negative equity is
greater than the amount paiddown?-Answer:- A. Deduct the
cash down amount from the negative equity, record the down
payment on the contract as zero, and record the amount still
owed on the trade as an additional amount financed.
8. Which of the dollar amounts listed in the TILA box
disclosures are included in the Total Sale Price?-Answer:- D.
All of the above
9. (True/False)A principal purpose of TILA is to promote the
informed use of customer credit by requiring disclosures about
its terms and cost.-Answer:- True
, 10. The TILA/Reg. Z states that the customer must take
possession of the Retail Installment Sale Agreement prior to it
being disclosed.
Which of the following "best practice" steps should be
followed?-Answer:- D. All of the above
11. (True/False)A situation exists that requires the customer
to be re-contracted and sign a new Retail Installment Sale
Agreement five days after consummating the deal.
If the reconstruct period is less than seven business days, the
date recorded on the initial installment sale agreement can be
used for the second agreement.--Answer:- False
12. The TILA disclosures must be given prior to the
consummation and in a form the customer can keep. Best
practices dictate that -Answer:- B. you give a completely
filled in (but not executed) installment sale contract to the
buyer so the buyer has control of the contract and can review
its contents.
13. Which of the following is/are advertisement triggering
term(s) for a lease ad?-Answer:- D. All of the above
14. Which of the following are considered criminal violations
of TILA/Reg. Z?-Answer:- D. All of the above
15. A dealer receives a cease and desist order for an ad they
ran that violated TILA/Reg. Z.If that dealership continues to
run the ad, what are the potential penalties?-Answer:- C. The
