AFIP TEST FINAL EXAM AND
PRACTICE EXAM QUESTIONS
2025 NEWEST ACTUAL EXAM
COMPLETE 450 QUESTIONS WITH
DETAILED VERIFIED ANSWERS
/A+ STUDY MATERIAL
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant. - ANSWER 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. - ANSWER True
(True/False) The CLA and Reg. M disclosures must be made prior to
consummation in a form the lessee can keep. - ANSWER True
(True/False) When completing the "Amount Due at Lease Signing or
Delivery" section of a lease agreement, it's permissible to enter a single
amount that represents the total of the various amounts that will be due
and payable when the contract is executed. - ANSWER False
In a typical credit transaction the (bank)/(dealer) is the creditor. -
ANSWER The dealer is the creditor
What is a contract? - ANSWER 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: - ANSWER 1. Offer
2. Acceptance
3. Consideration
, An offer consists of three elements: - ANSWER 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: - ANSWER 1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - ANSWER 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 - ANSWER 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. - ANSWER $500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?" - ANSWER The parties to the contract
must be of legal age under the laws of the state in which the contract is
written.
In most states, the _______ is deemed to be part of the purchase
agreement. - ANSWER Buyer's Guide
Criteria that can block the formation of a valid contract: - ANSWER 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? - ANSWER The
requirement that each party to the contract receives something of value in
exchange for what is given.
Finance Charge - ANSWER 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 - ANSWER 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 - ANSWER 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 - ANSWER 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. - ANSWER 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. - ANSWER Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding
balance due and payable. - ANSWER Acceleration
As recorded on an installment sale agreement, the total sale price or
deferred contract price would be the total of the ________. - ANSWER -
Payments
-Downpayment
-Net Trade-In
Which is NOT listed as a mandated TILA box disclosure? - ANSWER
Holder-in-Due Course Notice
, (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. - ANSWER False
At the time of consummation, an installment sale contract is between the
_______ and the _______. - ANSWER Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale
transactions for vehicles purchased for what type(s) of uses? - ANSWER
Personal, Family or Household
What is always the largest number on an installment sale agreement? -
ANSWER The total sale price
What does "force-placed" or "creditor-placed" mean? - ANSWER
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. - ANSWER True
How are installment sale contracts regulated? - ANSWER 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. - ANSWER True
Closed-End Credit - ANSWER 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) - ANSWER
Transaction -- Loan
Document -- Note
Cost of Credit -- Interest
Cost of credit stated as -- APR
Parties to the agreement -- Lender- customer
Closed-End Credit Terminology (Dealer Arranged) - ANSWER
Transaction -- Credit Sale
Document -- Installment Sale Agreement
PRACTICE EXAM QUESTIONS
2025 NEWEST ACTUAL EXAM
COMPLETE 450 QUESTIONS WITH
DETAILED VERIFIED ANSWERS
/A+ STUDY MATERIAL
(True/False): Ignorance of the law will shield you from liability if you are
noncompliant. - ANSWER 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. - ANSWER True
(True/False) The CLA and Reg. M disclosures must be made prior to
consummation in a form the lessee can keep. - ANSWER True
(True/False) When completing the "Amount Due at Lease Signing or
Delivery" section of a lease agreement, it's permissible to enter a single
amount that represents the total of the various amounts that will be due
and payable when the contract is executed. - ANSWER False
In a typical credit transaction the (bank)/(dealer) is the creditor. -
ANSWER The dealer is the creditor
What is a contract? - ANSWER 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: - ANSWER 1. Offer
2. Acceptance
3. Consideration
, An offer consists of three elements: - ANSWER 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: - ANSWER 1. An act of the parties
2. The operation of law
There are three criteria for the acceptance of an offer: - ANSWER 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 - ANSWER 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. - ANSWER $500
What is required in order for the parties (the individuals entering into the
contract) to have "legal capacity?" - ANSWER The parties to the contract
must be of legal age under the laws of the state in which the contract is
written.
In most states, the _______ is deemed to be part of the purchase
agreement. - ANSWER Buyer's Guide
Criteria that can block the formation of a valid contract: - ANSWER 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? - ANSWER The
requirement that each party to the contract receives something of value in
exchange for what is given.
Finance Charge - ANSWER 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 - ANSWER 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 - ANSWER 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 - ANSWER 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. - ANSWER 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. - ANSWER Manufacturer's
A(n) _______ clause allows the creditor to declare the entire outstanding
balance due and payable. - ANSWER Acceleration
As recorded on an installment sale agreement, the total sale price or
deferred contract price would be the total of the ________. - ANSWER -
Payments
-Downpayment
-Net Trade-In
Which is NOT listed as a mandated TILA box disclosure? - ANSWER
Holder-in-Due Course Notice
, (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. - ANSWER False
At the time of consummation, an installment sale contract is between the
_______ and the _______. - ANSWER Customer, Dealer
The Truth in Lending Act and Reg. Z govern installment sale
transactions for vehicles purchased for what type(s) of uses? - ANSWER
Personal, Family or Household
What is always the largest number on an installment sale agreement? -
ANSWER The total sale price
What does "force-placed" or "creditor-placed" mean? - ANSWER
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. - ANSWER True
How are installment sale contracts regulated? - ANSWER 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. - ANSWER True
Closed-End Credit - ANSWER 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) - ANSWER
Transaction -- Loan
Document -- Note
Cost of Credit -- Interest
Cost of credit stated as -- APR
Parties to the agreement -- Lender- customer
Closed-End Credit Terminology (Dealer Arranged) - ANSWER
Transaction -- Credit Sale
Document -- Installment Sale Agreement
