F&I IQ Test Welcome to your F&I IQ Test A lack of product knowledge may result in a dissatisfied customer and the hassles on the service aisle or in the sales manager’s office. A lack of regulatory knowledge will result in lawsuits, TV exposes or government agency administrative action. Name Email 1. An installment sale contract, at the time of consummation in the dealership, is between: A. the customer and a funding source willing to accept assignment of the contract. B. the customer and the selling dealer. 2. An extended warranty describes an aftermarket product purchased by a customer to reimbursehim or her for the cost of mechanical failures covered by the agreement after the factorywarranty expires and within the coverage period and other terms set forth in the contract. A. True B. False 3. With certain exceptions, if after purchasing GAP coverage, the customer does not haveproperty insurance (comprehensive and collision coverage) in force at the time of loss, then: A. the terms of the GAP coverage have been violated, and no money will be paid. B. depending on the provisions of the GAP coverage, the NADA Used Car Guide retail value – or agreed-upon value from another authoritative source – will be used to determine the GAP. C. the money paid to the dealer for the GAP coverage will be refunded to the customer. D. a and c 4. Under a dealership’s Red Flags Rule-mandated Identity Theft Prevention Program, if a redflag discrepancy cannot be cleared at the time of delivery, as a courtesy, the vehicle can bespot delivered, with the understanding that the sale has not been officially consummated. A. True B. False 5. If an installment finance buyer is quoted a 12% APR, and the customer asks whether it’s thebest rate available, the F&I practitioner should: A. state, “It’s the best rate available based on your credit worthiness.” B. state, “It’s the best rate the dealership currently has available.” C. attempt to not provide a direct answer. D. a or b, depending on the situation E. None of the above 6. According to the Consumer Leasing Act / Reg. M, a lessor has the option of extending anexisting lease on a month-to-month basis without new disclosures as long as the maximumterm is six months or less. A. True B. False 7. For the F&I practitioner, the Equal Credit Opportunity Act / Reg. B prohibition of disparatepricing practices means: A. that the spread between the Buy Rate and the Retail Rate charged the customer must be the same for every deal, regardless of the circumstances. B. that members of a protected class (based on their race, sex or other protected status) cannot be assessed a higher markup than other similarly situated customers. C. that members of a protected class can’t be charged a higher selling price for a vehicle; it has nothing to do with the spread between the Buy Rate and the Retail Rate. 8. A customer is paying for a used car with four cashier’s checks, each drawn from a differentbank, in the amounts of $3,500, $3,000, $3,150 and $500. Since none of the checksexceeds $10,000, an IRS 8300/FinCEN 8300 form should not be filed. A. True B. False 9. Under the Risk-Based Pricing Rule, dealers employing the NADA-negotiated Credit ScoreDisclosure Exception Notice (Exception Notice, for short) must: A. give a copy of the notice to the individual who will be listed on the agreement as the primary buyer B. give a copy of the notice to any individual who applies for credit and for whom a consumer report was obtained. C. a or b; it’s left to the discretion of the F&I practitioner whether to give the co-buyer a copy of the notice. However, the primary buyer must always receive a copy of the notice. 10. A customer buying a new car is paying $5,000 cash down and owes $7,500 more on thevehicle being traded in than was allowed. The negative equity may be posted on theinstallment sale agreement as: A. a downpayment of zero and an additional amount financed of $2,500. B. a downpayment of $5,000 and an additional amount financed of $7,500. C. an increase in the selling price of the vehicle and the appraised value of the trade-in to offset the deficiency D. a or b E. All of the above – any of the above options are acceptable.