A Refresher Quiz for 2024 By Barrett “Barrie” Charapp Beaty, Esq., Charapp & Weiss LLP This quiz is to refresh dealers on everyday scenarios that impact a dealership’s business. Many of the questions will appear clear, while others may jog a memory that needs to be refreshed. This quiz tests your knowledge on the status of issues for your dealership. The answers are on page 17. 1. True or False? This advertisement is correct: “3.25% Annual Percentage Rate financing available on all new cars.” 2. True or False? We have some especially low lease rates. Even though those are like the annual percentage rate, we cannot advertise those as low APR leases. For example, this language is improper: “We have 0.9% annual lease rate leases available on any new car.” 3. True or False? We do not use the NADA Fair Lending program but still train our sales and F&I employees that finance rates should be provided to customers on a non-discriminatory basis. Our fair lending training should protect us from lawsuits. 4. Choose the Correct Answer: When a subprime lender charges a lending fee we wish to pass to the vehicle buyer, we may only do so if we (choose one answer): a. Show it as an addition to the vehicle price; b. Show it on the RISC as an amount paid to others; c. Either a or b; or d. Neither a nor b. 5. True or False? We spot-delivered a car, and we cannot find a finance source to accept the RISC. We also cannot find the customer or the car to repossess it despite diligent efforts to locate them. We can report the vehicle as stolen. 6. True or False? We feel the best way to determine whether employees are working the hours required is to have them punch a time clock. Some of our commissioned employees are objecting. We feel we must do this to protect the company. 7. True or False? We hired a new sales manager. He wanted a minimum pay guarantee for six months. I met him at the local diner, and we scratched out a pay plan on a napkin, which stated his rate of pay and a minimum pay guarantee for six months. The manager did not work out. He was fired after one month. He is claiming his pay for the remaining five months. The dealership is not obligated to pay him. 8. True or False? An employee filed a claim of harassment. After a thorough investigation, it was determined that she was not harassed and that the claim was groundless. Since we didn’t violate federal law by harassing the employee in the first place, we can’t be found liable for taking action against the employee for filing a complaint. 9. True or False? We are doing a deal with a $8,500 cash down payment. The buyer is someone I know to be a drug dealer because he is my brother-inlaw’s supplier. I believe the down payment funds are the proceeds of illegal drug dealing. Even though the $8,500 down is below the threshold for notification to the government on IRS Form 8300, we should file an 8300 form anyway and mark it as a suspicious deal. 10. True or False? Nine years ago, our service manager signed an agreement with a supplier for three years. It contains a provision that, unless we give six months’ notice of termination, it automatically renews for a similar term at the end of a term. We no longer want to be in this contract because it costs too much. We sent notice to the company and let them know we are canceling. They have refused to cancel since we did not give six months’ notice, and it rolled over to a new three-year term. Unfortunately, it looks like we are stuck with this contract for the next three years. 6 Virginia Auto Dealer
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