AFIP TEST FINAL ASSESSMENT TEST 2026
TESTED QUESTIONS WITH FULL SOLUTION
GRADED A+
◉ The APR or Annual Percentage Rate is a mandated disclosure. It
must be used in oral discussions with a customer, in funding-related
advertisements, and on the retail installment sale agreement. A
customer asks, what does APR mean? Your response should be:
Answer: That's the "cost of credit" as a yearly rate.
◉ As noted in the Truth in Lending Act and Reg. Z, if the customer
owes more on the trade-in than the used car manager allowed, what
should the F&I manager do? Answer: A. Record the deficiency as a
negative down payment.
B. Increase the price of the vehicle and/or the trade-in so the
numbers still add up correctly.
C. Depending on the situation, either A or B.
D. None of the above
◉ If a Dealer receives a cease and desist order for an ad they ran that
violated the Truth in Lending Act/Reg. Z. If the Dealer continues to
run the ad, what are the potential penalties? Answer: They could be
required to pay a fine of up to $41,484 per day, per violation
,◉ Which Act does Regulation Z implement? Answer: Truth in
Lending Act
◉ How are deferred down payments treated under Truth in Lending
Act and Regulation Z? Answer: A deferred downpayment occurs
when the customer commits to a larger dollar amount than the
unencumbered funds he is able to provide at the time the request for
credit is submitted to a finance source. (Also referred to as a "hold-
check")
(The customer tenders $3,000 in cash at the time the credit
application is completed and sent to a funding source. However, the
customer promises to provide another $2,000 in cash within five
days. The request for credit sent to the funding source indicates a
downpayment of $5,000.)
· The total amount of the deferred downpayment must be paid in full
before the second otherwise regularly scheduled payment. (Before
that second direct withdrawal is taken from the customer's bank
account, 100% of the deferred amounts must have been paid.0
· A finance charge cannot be imposed on the deferred amount. · The
deferred amount cannot be included in the amount financed - it
must be recorded (included in) the recorded downpayment
· With the exception of California, the deferred downpayment
NOTE:
If the customer provides one or more check to be included in the
total amount of money recorded as the downpayment (hold-checks)
all of the checks have to be dated as of the date of the transaction.
You cannot collect "post-dated" checks.
,◉ Whenever discussing financing with a prospective customer
regarding the cost of credit, regardless of if it's in an oral discussion,
advertisement or during disclosure on an installment sale contract,
the term "APR" or "annual percentage rate" should be used. TRUE /
FALSE Answer: TRUE
◉ According to Regulation Z, it is necessary to disclose APR and the
Finance Charge? TRUE?False Answer: TRUE
◉ The Truth In Lending Act (TILA) is implemented by Regulation Z?
TRUE ? FALSE Answer: TRUE
◉ With the exception of some Precomputed Interest contracts used
by secondary finance sources, all other installment sales contracts
are simple interest or interest-bearing contracts. The following is a
layman's explanation of a simple interest installment sale
transaction. In a precomputed contract the finance charge is
computed on the assumption the contract will run full term. If the
customer terminates the agreement during the repayment term, he
will receive a refund of the unearned premium.
In a simple interest- or interest-bearing installment sale agreement,
the finance charge is computed daily and paid monthly throughout
the term of the agreement. If the customer pays-off the vehicle
before the scheduled end of the contract there is unearned finance
charge money to refund, but it has been each month the contract has
been in force. There is no refund of the unearned finance chargE
, TRUE /FALSE Answer: TRUE
◉ The term Contract Provisions is a TILA box statement. It alerts the
customer to the important information found on the front and back
of the agreement. If in reading contract provisions, the customer
asked you to explain the Acceleration Clause, your response would
be? Answer: A contractual right to accelerate the balance of the
installment sale agreement if the customer fails to make timely
monthly payments or to secure and maintain the required property
insurance
◉ There is a government requirement for an advertisement if you
mention certain terms in the ad known as triggering terms then you
must include all of another set of terms known as the triggered
terms.
Which of the terms listed below does NOT qualify as triggering
term? Answer: The name of the financing source is not a triggered
term.
◉ If an installment sale advertisement includes any one of the
triggering terms, which of the following must also be included in the
ad? Answer: There is a government requirement for an
advertisement, that if you mention certain terms in the ad known as
triggering terms, then you must include all of the triggered terms.
TESTED QUESTIONS WITH FULL SOLUTION
GRADED A+
◉ The APR or Annual Percentage Rate is a mandated disclosure. It
must be used in oral discussions with a customer, in funding-related
advertisements, and on the retail installment sale agreement. A
customer asks, what does APR mean? Your response should be:
Answer: That's the "cost of credit" as a yearly rate.
◉ As noted in the Truth in Lending Act and Reg. Z, if the customer
owes more on the trade-in than the used car manager allowed, what
should the F&I manager do? Answer: A. Record the deficiency as a
negative down payment.
B. Increase the price of the vehicle and/or the trade-in so the
numbers still add up correctly.
C. Depending on the situation, either A or B.
D. None of the above
◉ If a Dealer receives a cease and desist order for an ad they ran that
violated the Truth in Lending Act/Reg. Z. If the Dealer continues to
run the ad, what are the potential penalties? Answer: They could be
required to pay a fine of up to $41,484 per day, per violation
,◉ Which Act does Regulation Z implement? Answer: Truth in
Lending Act
◉ How are deferred down payments treated under Truth in Lending
Act and Regulation Z? Answer: A deferred downpayment occurs
when the customer commits to a larger dollar amount than the
unencumbered funds he is able to provide at the time the request for
credit is submitted to a finance source. (Also referred to as a "hold-
check")
(The customer tenders $3,000 in cash at the time the credit
application is completed and sent to a funding source. However, the
customer promises to provide another $2,000 in cash within five
days. The request for credit sent to the funding source indicates a
downpayment of $5,000.)
· The total amount of the deferred downpayment must be paid in full
before the second otherwise regularly scheduled payment. (Before
that second direct withdrawal is taken from the customer's bank
account, 100% of the deferred amounts must have been paid.0
· A finance charge cannot be imposed on the deferred amount. · The
deferred amount cannot be included in the amount financed - it
must be recorded (included in) the recorded downpayment
· With the exception of California, the deferred downpayment
NOTE:
If the customer provides one or more check to be included in the
total amount of money recorded as the downpayment (hold-checks)
all of the checks have to be dated as of the date of the transaction.
You cannot collect "post-dated" checks.
,◉ Whenever discussing financing with a prospective customer
regarding the cost of credit, regardless of if it's in an oral discussion,
advertisement or during disclosure on an installment sale contract,
the term "APR" or "annual percentage rate" should be used. TRUE /
FALSE Answer: TRUE
◉ According to Regulation Z, it is necessary to disclose APR and the
Finance Charge? TRUE?False Answer: TRUE
◉ The Truth In Lending Act (TILA) is implemented by Regulation Z?
TRUE ? FALSE Answer: TRUE
◉ With the exception of some Precomputed Interest contracts used
by secondary finance sources, all other installment sales contracts
are simple interest or interest-bearing contracts. The following is a
layman's explanation of a simple interest installment sale
transaction. In a precomputed contract the finance charge is
computed on the assumption the contract will run full term. If the
customer terminates the agreement during the repayment term, he
will receive a refund of the unearned premium.
In a simple interest- or interest-bearing installment sale agreement,
the finance charge is computed daily and paid monthly throughout
the term of the agreement. If the customer pays-off the vehicle
before the scheduled end of the contract there is unearned finance
charge money to refund, but it has been each month the contract has
been in force. There is no refund of the unearned finance chargE
, TRUE /FALSE Answer: TRUE
◉ The term Contract Provisions is a TILA box statement. It alerts the
customer to the important information found on the front and back
of the agreement. If in reading contract provisions, the customer
asked you to explain the Acceleration Clause, your response would
be? Answer: A contractual right to accelerate the balance of the
installment sale agreement if the customer fails to make timely
monthly payments or to secure and maintain the required property
insurance
◉ There is a government requirement for an advertisement if you
mention certain terms in the ad known as triggering terms then you
must include all of another set of terms known as the triggered
terms.
Which of the terms listed below does NOT qualify as triggering
term? Answer: The name of the financing source is not a triggered
term.
◉ If an installment sale advertisement includes any one of the
triggering terms, which of the following must also be included in the
ad? Answer: There is a government requirement for an
advertisement, that if you mention certain terms in the ad known as
triggering terms, then you must include all of the triggered terms.
