AFIP Cer fica on Ques ons and answers | Updated
RATED A+ | 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 ac#ons and what you say to each customer.
True
In a typical credit transac#on 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 forma#on of a contract requires three elements:
1. Offer
2. Acceptance
3. Considera#on
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 communica#on of the offer to the offeree (in this case, the customer)
An offer may be terminated by:
1. An act of the par#es
2. The opera#on of law
There are three criteria for the acceptance of an offer:
1. The offer is accepted by one who is en#tled to accept
2. The acceptance takes the proper form and is #mely
,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
wri#ng.
The Statute of Frauds requires a wri5en contract for the sale of goods for a price of _______ or
more.
$500
What is required in order for the par#es (the individuals entering into the contract) to have
"legal capacity?"
The par#es to the contract must be of legal age under the laws of the state in which the
contract is wri5en.
Criteria that can block the forma#on of a valid contract:
1. The need for a wri5en 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 "considera#on" 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 resul#ng dollar amount calculated by applying the Annual Percentage
Rate to the Amount Financed over the term of the contract.
How the Itemiza#on 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 Sec#ons of an installment sale contract
,Sec#on A) General Informa#on -- Iden#fies the par#es to the agreement.
Sec#on B) Mandated Disclosures -- Disclosures required by TILA
Sec#on C) Insurance-Related Disclosures --Credit insurance is op#onal
Sec#on D) Signature Blocks - No#ce to Buyer Disclosures --Bind all par#es to contract
The introductory informa#on and promise to pay contained in Sec#on A of Retail Installment
Form
Promise to Pay - This sec#on outlines the purpose of the transac#on and the primary
obliga#ons that will be incurred from signing the contract.
The difference between full or par#al recourse and no recourse assignments.
Essen#ally determines the length of #me, if any, the seller is responsible for the ac#ons of the
buyer.
Warranty disclaimers do not apply to _______ warran#es on new or used vehicles to which that
warranty s#ll applies.
Manufacturer's
A(n) _______ clause allows the creditor to declare the en#re outstanding balance due and
payable.
Accelera#on
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 No#ce
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 #me of consumma#on, an installment sale contract is between the _______ and the
_______.
Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transac#ons 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 no#fy 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 #me, such as for home mortgages,
vehicle purchases and other types of installment-based financing.
Closed-End Credit Terminology (Customer Arranged)
Transac#on -- Loan
Document -- Note
Cost of Credit -- Interest
RATED A+ | 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 ac#ons and what you say to each customer.
True
In a typical credit transac#on 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 forma#on of a contract requires three elements:
1. Offer
2. Acceptance
3. Considera#on
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 communica#on of the offer to the offeree (in this case, the customer)
An offer may be terminated by:
1. An act of the par#es
2. The opera#on of law
There are three criteria for the acceptance of an offer:
1. The offer is accepted by one who is en#tled to accept
2. The acceptance takes the proper form and is #mely
,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
wri#ng.
The Statute of Frauds requires a wri5en contract for the sale of goods for a price of _______ or
more.
$500
What is required in order for the par#es (the individuals entering into the contract) to have
"legal capacity?"
The par#es to the contract must be of legal age under the laws of the state in which the
contract is wri5en.
Criteria that can block the forma#on of a valid contract:
1. The need for a wri5en 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 "considera#on" 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 resul#ng dollar amount calculated by applying the Annual Percentage
Rate to the Amount Financed over the term of the contract.
How the Itemiza#on 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 Sec#ons of an installment sale contract
,Sec#on A) General Informa#on -- Iden#fies the par#es to the agreement.
Sec#on B) Mandated Disclosures -- Disclosures required by TILA
Sec#on C) Insurance-Related Disclosures --Credit insurance is op#onal
Sec#on D) Signature Blocks - No#ce to Buyer Disclosures --Bind all par#es to contract
The introductory informa#on and promise to pay contained in Sec#on A of Retail Installment
Form
Promise to Pay - This sec#on outlines the purpose of the transac#on and the primary
obliga#ons that will be incurred from signing the contract.
The difference between full or par#al recourse and no recourse assignments.
Essen#ally determines the length of #me, if any, the seller is responsible for the ac#ons of the
buyer.
Warranty disclaimers do not apply to _______ warran#es on new or used vehicles to which that
warranty s#ll applies.
Manufacturer's
A(n) _______ clause allows the creditor to declare the en#re outstanding balance due and
payable.
Accelera#on
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 No#ce
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 #me of consumma#on, an installment sale contract is between the _______ and the
_______.
Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale transac#ons 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 no#fy 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 #me, such as for home mortgages,
vehicle purchases and other types of installment-based financing.
Closed-End Credit Terminology (Customer Arranged)
Transac#on -- Loan
Document -- Note
Cost of Credit -- Interest
