How confident are you of your F&I knowledge? Take this 10-question quiz developed by the Association of Finance and Insurance Professionals (AFIP), a nonprofit group that works extensively with F&I professionals in the auto industry. Besides measuring your skills, the test can be used to determine the merit of a candidate for an F&I opening. The questions are based on federal F&I regulations, according to the AFIP.
1. An installment sale agreement, at the time it is consummated in the dealership, is between:
A. the customer and the lending institution that has agreed to the terms of the transaction.
B. the customers and the selling dealer.
2. An extended warranty describes a product that reimburses the customer for covered mechanical failures for a period of time expressed in months or miles after the factory warranty has expired.
3. If the customer purchases credit life insurance, the first beneficiary is:
A. the lienholder
B. an individual or the individuals named by the insured.
C. the estate, if no party is identified.
D. b and c.
4. An Accident & Health Insurance claim form must be signed by:
A. the customer, to affirm that the information is correct.
B. the selling dealer, to verify that the vehicle has been sold.
C. the attending physician, to verify that the customer is ill or injured.
D. the employer, to confirm that the person is working 30-plus hours a week.
E. the lender, to affirm the loan is still in force.
F. all of the above.
G. all of the above, except __, __.
5. After being quoted a 12 percent APR, if the customer asks whether that is the best rate available, the F&I practitioner should:
A. state that it is the best rate available based on the customer’s credit score.
B. state that it is the best rate the dealership currently has available.
C. attempt to avoid answering the question.
D. a or b, depending on the situation.
E. none of the above.
6. The F&I department has submitted a lease ad for the dealer to run in the local newspaper. Based on dealership policy and the requirements of the lease company, the vehicle featured in the ad will require a customer payment at delivery of $135 for applicable taxes and fees, the first monthly lease payment of $450, and a $3,000 security deposit. As required by law, the text of the ad should include:
A. an itemized breakdown of the items and amounts that are included in the total the customer must pay at lease signing or delivery, in at least 10-point type in an insert near the text promoting the deal.
B. a single statement posting the total amount due at lease signing or delivery.
7. The F&I practitioner completed the installment sale agreement and disclosed it to the customer. The customer refuses to sign the contract but wants to take a copy with him. The F&I manager should:
A. politely decline the request, stating that the customer is only entitled to a copy of a contract containing the terms of the transaction if it is signed by the customer. In some cases, you might state the request is in violation of dealer policy.
B. give the customer a copy of the contract.
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 exceed $10,000, the F&I person need not complete IRS/FinCEN Form 8300.
9. If an F&I practitioner leaves a number of deal jackets unattended in an unlocked office, it would be a violation of:
A. the Consumer Information Protection Act.
B. the Truth in Lending Act – Regulation Z.
C. the Safeguards Rule.
D. a and b.
E. a and c.
10. The following circumstances are to be applied below. The customer purchases an automobile for $20,000. The trade-in allowance was $8,000, but the customer owes $10,000 on the vehicle. The customer is paying $1,500 down. The F&I practitioner should:
A. increase the value of the vehicle and the trade on the Buyer’s Order by $500.
B. post $500 as an additional amount financed on the installment sale agreement.
C. depending on the situation, either a or b.
D. none of the above.
Source: Association of Finance and Insurance Professionals
1 – b, 2 – b, 3 – a, 4 – g all of the above, except b, 5 – e, 6 – b, 7 – b, 8 – b, 9 – c, 10 - b
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