Houston Independent Automobile Dealers Association January 2016 Issue: How Compliant Are You? | Page 7

4. Which of the following statements regarding odometers is correct?
a. Only a licensed mechanic may legally
change out an instrument cluster.
b. Generally speaking, the true mileage on a vehicle is not considered
to be a material fact that the buyer
relies upon when making a purchase decision.
c. If an instrument cluster is repaired or
replaced, the owner of the vehicle or
agent of the owner shall attach a written
notice to the left door frame of the vehicle specifying the mileage before the service, repair, or replacement and the date
of the service, repair, or replacement.
d. None of the above

5. The legal term for a court order that directs
an officer to take possession of property is a
writ of _______________:
a. Possession
b. Replevin
c. Sequestration
d. Trover

6. True or False: Both the state’s and the
inspection station’s portion of the
inspection fee may be passed through
to the customer, provided the dealer
actually incurs those costs and retains
the inspection station receipt.

7. A lien on a vehicle becomes “perfected”
at what point?
a. When the state issues a title certificate with the lien recorded on it.
b. When the county tax office accepts
the assigned title and transfer fees.
c. When the buyer signs the motor
vehicle installment contract.
d. When the buyer signs the Form 130U.

8. True or False: Under current law (as of
December 2015), in order for a dealer
to register his/her customer’s vehicle,
that vehicle must have had a current,
passing inspection in the 90 day period
prior to the registration application.

9. True or False:
A dealer can avoid being obligated for
the sales tax on a vehicle sale by delivering the title certificate and filled-in
transfer papers to the buyer.
December 2015

T e x a s

D e a l e r

10. A licensed VSF’s (Vehicle Storage
Facility) storage lien is ______ to a
prior recorded car creditor’s lien.
a. Inferior
b. Superior
c. Equal
d. Second cousin, once removed

11. True or False:
A Related Finance Company is
required to have a separate OCCC
Vehicle Finance License even if
ownership is 100 per cent identical
to the dealership.

12. Changing your business form from
sole proprietor to LLC is ______ .
a. An undertaking with potential
complications.
b. Something upon which an
attorney and/or CPA should
be consulted.
c. Illegal in Texas
d. Both a) and b)

13. Which of the following puts a creditor
on official notice that a debtor has filed
bankruptcy:
a. A hand-written note from the
debtor.
b. A file-marked notice from a
bankruptcy court.
c. A fax from the debtor’s attorney’s
office.
d. A phone call from the debtor.
e. All of the above

14. When it comes to a vehicle with an
open safety recall…
a. Dealers may not sell such a
vehicle.
b. Dealers do not need to disclose
the open safety recall status to a
potential buyer.
c. There is no VIN-specific way to
verify if a particular vehicle has
an open safety recall.
d. none of the above

15. True or False:
A car creditor that requires property-damage coverage on its collateral
can reject a policy with a term of
less than six months.

16. True or False:
The consent order issued
by NHTSA to Fiat Chrysler
Automobiles (FCA) earlier this
year that required FCA to buy back
certain unrepaired vehicles (mainly
Dodge Rams 2008-2012) does not
apply to vehicles held by independent dealers.

17. The debt cancellation provisions of a
Debt Cancellation Agreement kick in upon
which of the following:
a. The collateral is totaled.
b. The collateral is stolen.
c. The collateral is used in the
commission of a crime.
d. The engine locks up.
e. Both a. and b.

18. Which of the following documents is
NOT required in every deal jacket for a
Texas buyer?
a. VTR 136 County of Title Issuance
b. VTR 271 Power of Attorney to
Transfer Motor Vehicle
c. VTR 500 Title Application
Receipt (the “white slip”)
d. Buyer’s guide (As-Is)
e. Customer’s ID

19. The IRS requires BHPH dealers to use
which accounting basis in calculating
taxable gain on receivables:
a. Cash basis
b. Accrual basis
c. The declining balance basis
d. Accrual less deduction for
anticipated losses

20. True or False: A study by the
American Customer Satisfaction
Index indicates that car buyer
satisfaction is down for the third
straight year.
The study suggests that Obama administration policies and a surge in
safety recalls (nearly 64 million in
2014) are the primary driving forces
behind consumers’ increasing disgruntlement.

Answers can be found on page 44.
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