OMVIC Practice Test

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Dive into the OMVIC Practice Test and test your knowledge on laws, regulations, and ethical practices in the automotive industry. Perfect for aspiring dealers and salespersons to validate their expertise!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

To sell an extended warranty, a dealer must ensure the warranty:

Has an unlimited total liability
Is either insured or backed by a letter of credit
Only covers manufacturer's defects
Is transferable without any fees

The correct answer is: Is either insured or backed by a letter of credit

The reason option A is incorrect is because having an unlimited total liability would be financially risky for the dealer. Option C is incorrect because limited warranties do cover certain kinds of damage, like accidental damage or normal wear and tear. Option D is incorrect because transfer fees may still apply even if the warranty is transferable. Therefore, option B is the best choice as it ensures that the warranty is backed by insurance or a letter of credit, providing financial security for both the dealer and the customer.