Final answer:
Proof of financial responsibility is required when purchasing or leasing vehicles to demonstrate insurance coverage, and by banks in the financial capital market before granting a loan to ensure income sources and the ability to repay.
Step-by-step explanation:
Proof of financial responsibility is typically required in several instances, especially related to vehicle ownership and borrowing in financial markets. When purchasing or leasing a new or used vehicle, proof of car insurance is often needed as it is a mandated requirement in most states. Car insurance rates can vary based on factors such as the vehicle's safety rating, your driving history, and the vehicle's history, among others. As for the financial capital market, proof of financial responsibility is necessary before a bank makes a loan, where a prospective borrower must disclose income sources, and undergo a credit check. Additionally, banks might require a cosigner on the loan or collateral such as property or equipment that can be seized if the loan is not repaid.