Colorado Car Sales Practice Test

What must be included in the advertised price of a motor vehicle?

1. Dealer processing fee

2. Finance charge

3. Sales tax

4. Insurance costs

The correct answer is: Finance charge

The correct answer is that the advertised price of a motor vehicle must include the finance charge. This is crucial because when a dealer advertises a vehicle, they are obligated to present a transparent and comprehensive price that reflects the total cost to the consumer if they choose to finance the vehicle. The finance charge can substantially affect the overall price, making it essential for consumers to understand the full financial commitment required to purchase the car. Including the finance charge in the advertised price ensures consumers are not misled about the actual cost of the vehicle. It allows potential buyers to make informed decisions by providing a clearer picture of what they will ultimately pay over the term of the financing arrangement, including interest and associated fees. In contrast, while dealer processing fees, sales tax, and insurance costs are also considerations in the total cost of purchasing a vehicle, they are typically not required to be included in the advertised price. Dealer processing fees can vary significantly, sales tax may differ by location, and insurance rates depend on individual circumstances, meaning they are not standardized components of advertising the vehicle's price.