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F&I IQ Test

A lack of product knowledge may result in a dissatified 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.

The questions below are based on regulations that apply to F&I.
  1. An installment sale agreement, at the time it is consummated in the dealership, is between:
    1. the customer and the lending institution


    2. the customer and the selling dealer


  2. An extended warranty describes the aftermarket product purchased by a customer to reimburse him or her for the cost of mechanical failures that occur after the factory warranty expires and within the coverage period limitations set forth in the contract.
    1. True


    2. False


  3. With certain exceptions, if after purchasing GAP coverage, the customer does not have property insurance(comprehensive and collision coverage) in force at the time of loss, then:
    1. the terms of the GAP coverage have been violated, and no money will be paid.


    2. the money paid to the dealer for the GAP coverage will be refunded to the customer.


    3. depending on the provisions of the coverage, the NADA Used Car Guide retail value or other authoritative source will he used to determine the GAP.


  4. According to the provisions of the Red Flags Rule, if a red flag discrepancy has not been fully cleared by the customer and confirmed by management, the vehicle can be spot delivered, but the sale cannot be officially consummated.
    1. True


    2. False


  5. After being quoted a 12% APR, if the customer asks whether that is the best rate available, the F&I practitioner should:
    1. state that it is the best rate available based on the customer's credit score.


    2. state that it is the best rate the dealership currently has available.


    3. attempt to avoid answering the question.


    4. a or b, depending on the situation.


    5. none of the above.


  6. According to the Customer Leasing Act, a lessor may extend an existing lease without new disclosures on a month-to-month basis so long as the maximum term is six months or less.
    1. True


    2. False


  7. The Dodd-Frank Act increased the dollar amount governed by the Consumer Leasing Act and the Truth In Lending Act to a base of $54,600, adjusted for inflation.This threshold is based on:
    1. situations in which the selling price of the vehicle exceeds $54,600.


    2. the amount financed on an installment sale agreement


    3. the total contractual obligation on a consumer lease agreement


    4. b and c


    5. none of the above - there is no limit


  8. A customer wishes to pay for a used car with four cashier’s checks drawn on four different banks in the amounts of $7,500, $6,800, $3,000, and $8,300. Since none of the checks exceeds $10,000, the F&I person need not complete IRS I FinCEN Form 8300.
    1. True


    2. False


  9. As mandated by the Risk-Based Pricing Rule, the NADA-model consumer credit score disclosure form must be disclosed:
    1. at the F&I practitioner’s option at any point during the documentation process, so long as it gets disclosed.


    2. only if the customer doesn’t qualify for credit.


    3. as soon as practicable, but prior to disclosing the installment sale agreement.


  10. A customer buying a new car is paying $5,000 cash down and owes $7,500 more on the trade-in than was allowed. In this case, the postings on the installment sale agreement can be:
    1. a downpayment of zero and an additional amount financed of $2,500.


    2. a downpayment of $5,000 and an additional amount financed of $7,500.


    3. an increase in the selling price of the vehicle and the trade allowance in the amounts of $7,500 for each.


    4. a or b


    5. all of the above.

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