AFIP Certification Exam| Complete questions and 100% correct answers| Latest 2026

AFIP Certification Exam| Complete questions and 100% correct answers| Latest 2026 (True/False): Ignorance of the law will shield you from liability if you are noncompliant. False (True/False): As an F&I manager working directly with customers, you are individually responsible for your actions and what you say to each customer. True In a typical credit transaction the (bank)/(dealer) is the creditor. The dealer is the creditor What is a contract? A contract is an agreement involving a promise or set of promises that the law enforces or protects. The formation of a contract requires three elements: 1. Offer 2. Acceptance 3. Consideration An offer consists of three elements: 1. An expression of a promise or commitment (intent) to enter a contract 2. An expression of definite and certain terms 3. The communication of the offer to the offeree (in this case, the customer) An offer may be terminated by: 1. An act of the parties 2. The operation of law There are three criteria for the acceptance of an offer: 1. The offer is accepted by one who is entitled to accept 2. The acceptance takes the proper form and is timely 3. The terms of acceptance reflect closely the terms of the offer and, therefore, do not amount to a counteroffer The Statute of Frauds Generally requires that all contracts involving the sale of goods for a price of $500 or more be in writing. The Statute of Frauds requires a written contract for the sale of goods for a price of _______ or more. $500 What is required in order for the parties (the individuals entering into the contract) to have "legal capacity?" The parties to the contract must be of legal age under the laws of the state in which the contract is written. Criteria that can block the formation of a valid contract: 1. The need for a written agreement under the Statute of Frauds and certain provisions of the Uniform Commercial Code (U.C.C.) 2. The need for legal capacity of a party to contract 3. The act of fraudulent inducement What is "consideration" as it applies to a contract? The requirement that each party to the contract receives something of value in exchange for what is given. Finance Charge The Finance Charge is the resulting dollar amount calculated by applying the Annual Percentage Rate to the Amount Financed over the term of the contract. How the Itemization of Amount Financed is completed 1. Cash Price (Agreed to price of vehicle) 2. Total Downpayment 3. Unpaid Balance of Cash Price(Cash Price-Downpayment) 4. Other Charges (GAP, VSC, Etc.) 5. Amount Financed 4 Key Sections of an installment sale contract Section A) General Information -- Identifies the parties to the agreement. Section B) Mandated Disclosures -- Disclosures required by TILA Section C) Insurance-Related Disclosures --Credit insurance is optional Section D) Signature Blocks - Notice to Buyer Disclosures --Bind all parties to contract The introductory information and promise to pay contained in Section A of Retail Installment Form Promise to Pay - This section outlines the purpose of the transaction and the primary obligations that will be incurred from signing the contract. The difference between full or partial recourse and no recourse assignments. Essentially determines the length of time, if any, the seller is responsible for the actions of the buyer. Warranty disclaimers do not apply to _______ warranties on new or used vehicles to which that warranty still applies. Manufacturer's A(n) _______ clause allows the creditor to declare the entire outstanding balance due and payable. Acceleration As recorded on an installment sale agreement, the total sale price or deferred contract price would be the total of the ________. -Payments -Downpayment -Net Trade-In Which is NOT listed as a mandated TILA box disclosure? Holder-in-Due Course Notice In most states, the _______ is deemed to be part of the purchase agreement. Buyer's Guide (True/False) Because the late charges that may be imposed on an installment sale agreement are regulated at the state level, the amount of the late charge is NOT a required disclosure item. False At the time of consummation, an installment sale contract is between the _______ and the _______. Customer, Dealer The Truth in Lending Act and Reg. Z govern installment sale transactions for vehicles purchased for what type(s) of uses? Personal, Family or Household What is always the largest number on an installment sale agreement? The total sale price What does "force-placed" or "creditor-placed" mean? Allows the creditor to force place insurance - that is, buy physical damage insurance to cover the creditor's interest in the vehicle or the creditor's and the buyer's interest in the vehicle if the buyer fails to do so. (True/False) Installment sale agreements notify the customer of the state's laws regarding repossession and how (if applicable) the customer can redeem the vehicle or reinstate the contract. True How are installment sale contracts regulated? By federal and state law (True/False) If the vehicle is declared a total loss, the creditor may claim the proceeds from the physical damage insurance. True Closed-End Credit A fixed amount of money borrowed for a specified period of time, such as for home mortgages, vehicle purchases and other types of installment-based financing. Closed-End Credit Terminology (Customer Arranged)