AFIP - Basic Certification Course
1. The ________ issues UDAP violations to dealers, the CPFB, FTC
________ issues UDAAP violations to dealers.
2. (True/False) If circumstances require that a second False
lease agreement be executed - the customer must
be recontracted - the date recorded on the second
agreement must be the date of the original contract.
3. Which of the following events, if any, can terminate an A. Death or insanity of an
offer? offeree or offeror
4. What is "consideration" as it applies to a contract? A. The requirement that
each party to the contract
receives something of val-
ue in exchange for what is
given
5. If a customer is re-contracted five days after the orig- B. As an entirely new
inal agreement was executed, how should the second agreement, with the date
agreement be treated? the second contract is exe-
cuted recorded on the in-
stallment sale agreement.
6. (True/False) TILA/Reg Z treats "loans" and "credit False
sales" the same way since they are both essentially a
promise to pay.
7. Although not specifically required by the TILA or Reg True
Z., an installment sale contract may contain an accel-
eration clause. This is a contract provision that allows
the funding source who accepted the assignment of
the installment sale agreement to require the cus-
, AFIP - Basic Certification Course
tomer to pay all or part of the outstanding balance if
certain requirements are not met.
8. The CFPB issues UDAAP violations. UDAAP stands for: C. Unfair, Deceptive, Abu-
sive, Acts or Practices
9. A contract can be defined as an agreement that in- C. A promise or set of
cludes: promises that the law en-
forces or protects
10. Which of the following is considered a "credit sale" B. Karl arranges funding
transaction under TILA/Reg Z? through the F&I manager
for a vehicle purchased at
a dealership.
11. What is an acceleration clause? B. If the customer defaults
under the contract, the
lender can make the full
outstanding balance due
and payable
12. An installment sale contract may contain a provision A. force place
that allows the lender to _______ property insurance if
the customer fails to obtain insurance or lets it lapse.
13. What do the letters in UDAP stand for? E. Unfair, Deceptive, Acts,
Practices
14. What are the three required elements of a contract? D. An offer, acceptance,
and consideration.
15. What are the criteria for "acceptance" of an offer? D. All of the above
16. A. CFPB, FTC
, AFIP - Basic Certification Course
The __________ issues UDAP violations to dealers, the
__________ issues UDAAP violations to dealers.
17. (True/False) The dealer is the creditor in a typical credit True
transaction.
18. As noted in the Truth in Lending Act and Reg. Z, if the D. None of the above
customer owes more on the trade-in than the used car
manager allowed, should the F&I manager do?
19. Which of the following transactions are NOT regula- D. Both A and C
tion by TILA/Reg Z?
20. (True/False) True
With the exception of some Precomputed Interest
contracts used by secondary finance sources, all other
installment sales contracts are simple interest or in-
terest-bearing contracts. The following is a layman's
explanation of a simple interest installment sale trans-
action. 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 agree-
ment. If the customer pays-off the vehicle before the
scheduled end of the contract there is unearned fi-
nance charge money to refund, but it has been each
1. The ________ issues UDAP violations to dealers, the CPFB, FTC
________ issues UDAAP violations to dealers.
2. (True/False) If circumstances require that a second False
lease agreement be executed - the customer must
be recontracted - the date recorded on the second
agreement must be the date of the original contract.
3. Which of the following events, if any, can terminate an A. Death or insanity of an
offer? offeree or offeror
4. What is "consideration" as it applies to a contract? A. The requirement that
each party to the contract
receives something of val-
ue in exchange for what is
given
5. If a customer is re-contracted five days after the orig- B. As an entirely new
inal agreement was executed, how should the second agreement, with the date
agreement be treated? the second contract is exe-
cuted recorded on the in-
stallment sale agreement.
6. (True/False) TILA/Reg Z treats "loans" and "credit False
sales" the same way since they are both essentially a
promise to pay.
7. Although not specifically required by the TILA or Reg True
Z., an installment sale contract may contain an accel-
eration clause. This is a contract provision that allows
the funding source who accepted the assignment of
the installment sale agreement to require the cus-
, AFIP - Basic Certification Course
tomer to pay all or part of the outstanding balance if
certain requirements are not met.
8. The CFPB issues UDAAP violations. UDAAP stands for: C. Unfair, Deceptive, Abu-
sive, Acts or Practices
9. A contract can be defined as an agreement that in- C. A promise or set of
cludes: promises that the law en-
forces or protects
10. Which of the following is considered a "credit sale" B. Karl arranges funding
transaction under TILA/Reg Z? through the F&I manager
for a vehicle purchased at
a dealership.
11. What is an acceleration clause? B. If the customer defaults
under the contract, the
lender can make the full
outstanding balance due
and payable
12. An installment sale contract may contain a provision A. force place
that allows the lender to _______ property insurance if
the customer fails to obtain insurance or lets it lapse.
13. What do the letters in UDAP stand for? E. Unfair, Deceptive, Acts,
Practices
14. What are the three required elements of a contract? D. An offer, acceptance,
and consideration.
15. What are the criteria for "acceptance" of an offer? D. All of the above
16. A. CFPB, FTC
, AFIP - Basic Certification Course
The __________ issues UDAP violations to dealers, the
__________ issues UDAAP violations to dealers.
17. (True/False) The dealer is the creditor in a typical credit True
transaction.
18. As noted in the Truth in Lending Act and Reg. Z, if the D. None of the above
customer owes more on the trade-in than the used car
manager allowed, should the F&I manager do?
19. Which of the following transactions are NOT regula- D. Both A and C
tion by TILA/Reg Z?
20. (True/False) True
With the exception of some Precomputed Interest
contracts used by secondary finance sources, all other
installment sales contracts are simple interest or in-
terest-bearing contracts. The following is a layman's
explanation of a simple interest installment sale trans-
action. 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 agree-
ment. If the customer pays-off the vehicle before the
scheduled end of the contract there is unearned fi-
nance charge money to refund, but it has been each
