AFIP STATE LAWS - RETAIL EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
What are the primary laws including licensing laws, which govern this type of
credit sale?
The Motor Vehicle Sales Finance Act, the Credit Reform Act, the Motor Vehicle Retail
Installment Sale Act, and the Motor Vehicle Code.
For how long must records be retained?
2 years
Must finance charges be computed on a precomputed or simple interest basis?
Either
What is the maximum finance charge that may be charged?
25%
Are document-preparation fees permitted?
Yes. However, it can't exceed 5% of the cash price or $200, whichever is less, and has
to be charged in both cash and credit sales.
Are lien-filing or -recording fees permitted?
Yes
May documentary-stamp fees or recording taxes be passed along to the
consumer?
Yes
, May non-filing insurance premiums be charged to the consumer for purchasing
non-filing insurance?
Yes
Are fees for providing payoff amounts to a consumer permitted?
Yes. The buyer is entitled to one free account statement. A $0.50 charge is permitted
for each additional account statement.
What are the maximum permitted late charges? (Specify whether the late charge
is for simple interest precomputed contracts, or revolving contracts and indicate
the applicable grace period.)
$15 or 5% of the delinquent installment payment, whichever is greater. No minimum
grace period.
May attorney fees be charged upon a default?
Yes, but they must be reasonable.
May court costs be collected following default?
Yes
Are balloon payments permitted? Is there a requirement that it be refinanced?
Yes and yes
Does the state impose a maximum term on credit transactions?
No
Does state law specify a refund method for finance charges on precomputed
transactions?
Yes, the actuarial method must be used
Is credit unemployment insurance (joint or single) permitted to be offered?
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
What are the primary laws including licensing laws, which govern this type of
credit sale?
The Motor Vehicle Sales Finance Act, the Credit Reform Act, the Motor Vehicle Retail
Installment Sale Act, and the Motor Vehicle Code.
For how long must records be retained?
2 years
Must finance charges be computed on a precomputed or simple interest basis?
Either
What is the maximum finance charge that may be charged?
25%
Are document-preparation fees permitted?
Yes. However, it can't exceed 5% of the cash price or $200, whichever is less, and has
to be charged in both cash and credit sales.
Are lien-filing or -recording fees permitted?
Yes
May documentary-stamp fees or recording taxes be passed along to the
consumer?
Yes
, May non-filing insurance premiums be charged to the consumer for purchasing
non-filing insurance?
Yes
Are fees for providing payoff amounts to a consumer permitted?
Yes. The buyer is entitled to one free account statement. A $0.50 charge is permitted
for each additional account statement.
What are the maximum permitted late charges? (Specify whether the late charge
is for simple interest precomputed contracts, or revolving contracts and indicate
the applicable grace period.)
$15 or 5% of the delinquent installment payment, whichever is greater. No minimum
grace period.
May attorney fees be charged upon a default?
Yes, but they must be reasonable.
May court costs be collected following default?
Yes
Are balloon payments permitted? Is there a requirement that it be refinanced?
Yes and yes
Does the state impose a maximum term on credit transactions?
No
Does state law specify a refund method for finance charges on precomputed
transactions?
Yes, the actuarial method must be used
Is credit unemployment insurance (joint or single) permitted to be offered?
