AFIP Quiz
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1. Which of the following dis- · Detailed information regarding the lessee's responsibility for
closures are required by the maintaining and servicing the vehicle
Consumer Leasing Act/Reg. · Excess wear and use standards
M to be on a lease agree- · An early termination fee
ment? · The lessee's requirement to provide the vehicle insurance re-
quired by the lessor
· Other items not addressed in the question
2. The APR or Annual Percent- That's the "cost of credit" as a yearly rate.
age Rate is a mandated dis-
closure. It must be used in
oral discussions with a cus-
tomer, in funding-related ad-
vertisements, and on the re-
tail installment sale agree-
ment. A customer asks, what
does APR mean? Your re-
sponse should be:
3. As noted in the Truth in A. Record the deficiency as a negative down payment.
Lending Act and Reg. Z, if B. Increase the price of the vehicle and/or the trade-in so the
the customer owes more on numbers still add up correctly.
the trade-in than the used C. Depending on the situation, either A or B.
car manager allowed, what D. None of the above
should the F&I manager do?
4. If a Dealer receives a cease They could be required to pay a fine of up to $41,484 per day,
and desist order for an ad per violation
they ran that violated the
Truth in Lending Act/Reg. Z.
If the Dealer continues to run
, AFIP Quiz
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the ad, what are the potential
penalties?
5. Which Act does Regulation Z Truth in Lending Act
implement?
6. How are deferred down pay- A deferred downpayment occurs when the customer commits to
ments treated under Truth in a larger dollar amount than the unencumbered funds he is able
Lending Act and Regulation to provide at the time the request for credit is submitted to a
Z? 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 pay-
ment. (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 fi-
nanced - it must be recorded (included in) the recorded down-
payment
· 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.
7. TRUE
, AFIP Quiz
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Whenever discussing financ-
ing with a prospective cus-
tomer regarding the cost of
credit, regardless of if it's in
an oral discussion, advertise-
ment or during disclosure on
an installment sale contract,
the term "APR" or "annual
percentage rate" should be
used. TRUE / FALSE
8. According to Regulation Z, TRUE
it is necessary to disclose
APR and the Finance Charge?
TRUE?False
9. The Truth In Lending Act TRUE
(TILA) is implemented by
Regulation Z? TRUE ? FALSE
10. With the exception of some TRUE
Precomputed Interest con-
tracts used by secondary
finance sources, all other
installment sales contracts
are simple interest or in-
terest-bearing contracts. The
following is a layman's expla-
nation of a simple interest
installment sale transaction.
In a precomputed contract
the finance charge is com-
, AFIP Quiz
Study online at https://quizlet.com/_hza9qj
puted on the assumption the
contract will run full term. If
the customer terminates the
agreement during the repay-
ment term, he will receive a
refund of the unearned pre-
mium.
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 vehi-
cle before the scheduled end
of the contract there is un-
earned finance charge mon-
ey to refund, but it has been
each month the contract has
been in force. There is no re-
fund of the unearned finance
chargE
TRUE /FALSE
11. The term Contract Provisions A contractual right to accelerate the balance of the installment
is a TILA box statement. It sale agreement if the customer fails to make timely monthly
alerts the customer to the payments or to secure and maintain the required property in-
important information found surance
on the front and back of
the agreement. If in reading
contract provisions, the cus-
Study online at https://quizlet.com/_hza9qj
1. Which of the following dis- · Detailed information regarding the lessee's responsibility for
closures are required by the maintaining and servicing the vehicle
Consumer Leasing Act/Reg. · Excess wear and use standards
M to be on a lease agree- · An early termination fee
ment? · The lessee's requirement to provide the vehicle insurance re-
quired by the lessor
· Other items not addressed in the question
2. The APR or Annual Percent- That's the "cost of credit" as a yearly rate.
age Rate is a mandated dis-
closure. It must be used in
oral discussions with a cus-
tomer, in funding-related ad-
vertisements, and on the re-
tail installment sale agree-
ment. A customer asks, what
does APR mean? Your re-
sponse should be:
3. As noted in the Truth in A. Record the deficiency as a negative down payment.
Lending Act and Reg. Z, if B. Increase the price of the vehicle and/or the trade-in so the
the customer owes more on numbers still add up correctly.
the trade-in than the used C. Depending on the situation, either A or B.
car manager allowed, what D. None of the above
should the F&I manager do?
4. If a Dealer receives a cease They could be required to pay a fine of up to $41,484 per day,
and desist order for an ad per violation
they ran that violated the
Truth in Lending Act/Reg. Z.
If the Dealer continues to run
, AFIP Quiz
Study online at https://quizlet.com/_hza9qj
the ad, what are the potential
penalties?
5. Which Act does Regulation Z Truth in Lending Act
implement?
6. How are deferred down pay- A deferred downpayment occurs when the customer commits to
ments treated under Truth in a larger dollar amount than the unencumbered funds he is able
Lending Act and Regulation to provide at the time the request for credit is submitted to a
Z? 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 pay-
ment. (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 fi-
nanced - it must be recorded (included in) the recorded down-
payment
· 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.
7. TRUE
, AFIP Quiz
Study online at https://quizlet.com/_hza9qj
Whenever discussing financ-
ing with a prospective cus-
tomer regarding the cost of
credit, regardless of if it's in
an oral discussion, advertise-
ment or during disclosure on
an installment sale contract,
the term "APR" or "annual
percentage rate" should be
used. TRUE / FALSE
8. According to Regulation Z, TRUE
it is necessary to disclose
APR and the Finance Charge?
TRUE?False
9. The Truth In Lending Act TRUE
(TILA) is implemented by
Regulation Z? TRUE ? FALSE
10. With the exception of some TRUE
Precomputed Interest con-
tracts used by secondary
finance sources, all other
installment sales contracts
are simple interest or in-
terest-bearing contracts. The
following is a layman's expla-
nation of a simple interest
installment sale transaction.
In a precomputed contract
the finance charge is com-
, AFIP Quiz
Study online at https://quizlet.com/_hza9qj
puted on the assumption the
contract will run full term. If
the customer terminates the
agreement during the repay-
ment term, he will receive a
refund of the unearned pre-
mium.
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 vehi-
cle before the scheduled end
of the contract there is un-
earned finance charge mon-
ey to refund, but it has been
each month the contract has
been in force. There is no re-
fund of the unearned finance
chargE
TRUE /FALSE
11. The term Contract Provisions A contractual right to accelerate the balance of the installment
is a TILA box statement. It sale agreement if the customer fails to make timely monthly
alerts the customer to the payments or to secure and maintain the required property in-
important information found surance
on the front and back of
the agreement. If in reading
contract provisions, the cus-
