CAR General Business Operations 2 — Questions and Answers
Question 1: Which document is most critical when purchasing a vehicle for dismantling to ensure the recycler legally acquires ownership?
- Bill of sale only
- Certificate of title (Correct answer)
- Insurance declaration page
- Vehicle registration card
Correct answer: Certificate of title
A certificate of title is the legal proof of ownership required to lawfully acquire and dismantle a vehicle.
Question 2: Under federal law, which agency oversees the National Motor Vehicle Title Information System (NMVTIS) that auto recyclers must report to?
- EPA
- NHTSA
- DOJ (Correct answer)
- FMCSA
Correct answer: DOJ
NMVTIS is administered by the U.S. Department of Justice (DOJ) to prevent title fraud and track vehicle histories.
Question 3: An automotive recycler receives a vehicle with a salvage title. What must the recycler report to NMVTIS?
- Only the vehicle's color and mileage
- VIN, acquisition date, and disposition status (Correct answer)
- The name of the previous insurance carrier
- The estimated parts value only
Correct answer: VIN, acquisition date, and disposition status
NMVTIS requires recyclers to report the VIN, date of acquisition, and the vehicle's disposition within the required timeframe.
Question 4: What is the typical purpose of a 'core charge' in the automotive recycling parts business?
- A fee charged for storing vehicles outdoors
- A refundable deposit to encourage return of rebuildable parts (Correct answer)
- A penalty for selling non-OEM parts
- A surcharge for hazardous material handling
Correct answer: A refundable deposit to encourage return of rebuildable parts
A core charge is a refundable deposit that incentivizes customers to return worn or rebuildable parts for remanufacturing.
Question 5: Which of the following best describes a 'green' or 'OEM-equivalent' grade for a recycled part?
- A part that has been painted green for identification
- An original manufacturer part removed from a low-mileage vehicle in good condition (Correct answer)
- A remanufactured aftermarket part with a green label
- A part certified emission-free by the EPA
Correct answer: An original manufacturer part removed from a low-mileage vehicle in good condition
OEM-equivalent or 'green' grade parts are original factory parts pulled from vehicles in good, usable condition.
Question 6: Which business practice best reduces shrinkage and inventory discrepancies at an auto recycling yard?
- Accepting verbal purchase orders from regular customers
- Implementing a perpetual inventory management system with barcodes or RFID (Correct answer)
- Storing all parts inside the office building
- Limiting sales to walk-in customers only
Correct answer: Implementing a perpetual inventory management system with barcodes or RFID
A perpetual inventory system with tracking technology provides real-time accuracy and reduces losses from theft or misplacement.
Question 7: When an auto recycler sells a part online through a national locator network, which step is essential before confirming the sale?
- Immediately ship without checking stock
- Verify the part is physically in inventory and graded accurately (Correct answer)
- Relist the part at a higher price
- Wait for the customer to send payment first
Correct answer: Verify the part is physically in inventory and graded accurately
Confirming physical availability and accurate grading prevents chargebacks, disputes, and damage to business reputation.
