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| Colorado – Motor Vehicle Dealer ($50,000) Bond |  |
| Colorado – Powersports Vehicle Dealer ($50,000) Bond | |
| Colorado – Used Motor Vehicle Dealer ($50,000) Bond | |
| Colorado – Used Powersports Vehicle Dealer ($50,000) Bond | |
| Colorado – Wholesale Motor Vehicle Dealer Auction-Dealer ($50,000) Bond | |
Introduction
A Colorado Vehicle Dealer is an individual or business licensed by the Colorado Department of Revenue – Auto Industry Division to buy, sell, lease, or exchange motor vehicles, powersports vehicles, or trailers within the state. To legally operate, dealers must obtain the appropriate license type (e.g., new, used, wholesale, or powersports) and comply with state laws, including maintaining a $50,000 surety bond, securing a permanent business location, and following strict recordkeeping and sales practices.
Explanation: Colorado Vehicle Dealer Bond
The Colorado Vehicle Dealer Bond is a surety bond required by the Colorado Department of Revenue, Auto Industry Division for individuals or businesses applying for a license to operate as a motor vehicle dealer, powersports dealer, or used motor vehicle dealer in the state. It serves as a financial guarantee that the dealer will comply with state laws and regulations governing vehicle sales and business practices.
Purpose of the Bond
The Colorado Vehicle Dealer Bond protects the public and the state by ensuring that licensed dealers:
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Operate ethically and lawfully
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Pay all applicable taxes, fees, and penalties
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Do not commit fraud, misrepresentation, or breach of contract
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Fulfill their obligations related to title transfer and vehicle financing
If a dealer violates any legal duties, affected parties can file a claim against the bond for financial compensation.
Read our City of Canon City, CO – Right of Way Bond.
Who Needs the Bond?
All applicants for the following licenses must file a bond:
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New Motor Vehicle Dealer
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Used Motor Vehicle Dealer
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Wholesale Motor Vehicle Dealer
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Powersports Vehicle Dealer
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Wholesale Auction Dealer
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Key Parties to the Bond
- Principal – The vehicle dealer (individual or business)
- Obligee – Colorado Department of Revenue – Auto Industry Division
- Surety – The licensed surety bond company that issues the bond
See our Aspen, CO – Maintenance Bond.
When is the Bond Required?
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The bond must be submitted as part of the initial dealer license application.
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It must remain active and in force during the entire period of licensure.
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A new bond may be required upon license renewal or business structure change.
Process of Getting the Colorado Vehicle Dealer Bond
Step 1: Determine License Type
- Identify the type of motor vehicle license you’re applying for under the Colorado Auto Industry Division (AID).
Step 2: Know the Bond Requirement
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Bond Amount: $50,000
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Bond Term: Must be active for the entire license period
Step 3: Contact a Licensed Surety Bond Provider
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Choose a licensed surety bond company or agency
Step 4: Underwriting and Bond Issuance
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Surety reviews credit and financials
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If approved, they issue a Colorado Motor Vehicle Dealer Bond
Step 5: Submit Bond with Dealer License Application
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Visit the Auto Industry Division Dealer Portal
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Upload the signed bond
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Keep a copy of the original bond for your records
Conclusion
The Colorado Vehicle Dealer Bond is a mandatory $50,000 surety bond that ensures licensed dealers follow Colorado’s motor vehicle laws and protects consumers from fraudulent or unethical dealer practices. It is a core requirement for licensure and must be maintained in good standing throughout the license term.
Get our Arapahoe County, CO – Right of Way Bond.
Frequently Asked Questions (FAQs)
Can I get bonded with bad credit?
Yes, but expect higher premiums. Some sureties specialize in high-risk applicants.
Can I use one bond for multiple locations?
No. Each dealership license generally requires its own bond, even for the same owner, unless otherwise permitted by the Auto Industry Division.
Can claims be filed against the bond?
Yes. Valid claims (e.g., failure to provide title, fraud, unpaid taxes) may be paid out by the surety. The dealer must then reimburse the surety.
What happens if my bond lapses?
Your dealer license can be suspended or revoked by the Auto Industry Division. Always renew your bond on time.
Does the bond cover multiple owners in a dealership?
No. The bond covers the licensed dealership entity as a whole, not individual owners. However, all owners may be subject to underwriting during the bond approval process.
Can I get the bond before receiving my dealer license?
Yes. In fact, you must obtain and submit the bond as part of your license application. Without it, your license will not be issued.
Need our Colorado – Mileage and Fuel Tax Bond.