Colorado Motor Vehicle Dealer Bond Guide
If you are a motor vehicle dealer, salesperson or agent in Colorado, you need a surety bond to ensure proper business practice. Read on to learn more about what bond you need!
Bond Overview
- Purpose: To protect dealership customers from misconduct or fraudulent business practices
- Who Needs It: Motor vehicle dealers and salespeople in Colorado
- Regulating Body: The Colorado Department of Revenue
- Required Amount: $5,000, $15,000, $50,000 — varies by license type
- Premium Rates: Typically start at 0.9–2% of the bond amount, credit-based
What Is a Colorado Motor Vehicle Dealer Bond?
The Colorado Department of Revenue (CDOR) requires motor vehicle dealers and salespeople to purchase a surety bond to ensure ethical business practice. The bond protects customers from misconduct or fraud.
If you are a motor vehicle buyer agent, you need to purchase a different type of bond.
How Much Do Auto Dealer Bonds Cost in Colorado?
Colorado motor vehicle dealers must purchase the $50,000 surety bond with a starting premium of $450. Exact rates may vary based on credit score and other financial factors.
The $5,000 small trailer dealer bond typically costs $100 and the $15,000 motor vehicle salesperson bond starts at $150.
Select your bond below to get a free quote within one business day or less.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a Colorado Dealer Bond Work?
By purchasing a Colorado vehicle dealer bond, you enter a legally-binding contract between three parties:
- Principal: The dealer or salesperson purchasing the bond
- Obligee: The Colorado Department of Revenue
- Surety: The provider issuing the bond
If you, as the principal, break the bond terms, harmed parties can file claims for reimbursement. The surety will validate and pay claims up to the full bond amount. You are then responsible for refunding the surety for all expenses incurred.
Who Needs a Colorado Auto Dealer Bond?
If you sell three or more vehicles or trailers at a property in Colorado, you must be licensed and bonded. The following professionals must file a $50,000 surety bond:
- Motor vehicle dealers
- Used motor vehicle dealers
- Powersports vehicle dealers
- Used powersports vehicle dealers
- Wholesale motor vehicle dealers
- Business disposal dealers
For full definitions of dealer types refer to the Colorado Department of Revenue website
If you only sell small trailers (under 2,000 pounds), file the $5,000 trailer dealer bond instead. If you are a motor vehicle salesperson rather than a dealership owner, you simply need the $15,000 bond.
How Do I Get a Motor Vehicle Dealer Bond in Colorado?
SuretyBonds.com provides the fastest and easiest way to get an auto dealer bond in Colorado. Just follow these quick steps:
- Apply online at SuretyBonds.com
- Get a free quote within one business day
- Buy online or over the phone
- Receive your bond via email
- Sign and submit the bond form to the CDOR
Be sure to include your dealer type and county in your application.
How Fast Can I Get My Bond?
Most quotes are processed same-day. Once you receive your invoice, you can purchase it online 24/7. You’ll receive your bond form via email within minutes of purchase.
How Do I File My Bond?
The Colorado DOR’s Auto Industry Division and Motor Vehicle Board both accept dealer application paperwork online through the CDOR Specialized Business Group online system. Create an account and upload a copy of your signed bond form.
How Do I Renew My Motor Vehicle Dealer Bond?
Colorado motor vehicle dealer bonds expire annually on the last day of the month the bond was issued. A SuretyBonds.com representative will contact you during the renewal period to prepare a new bond. Follow the instructions provided to maintain your coverage for an additional term.
How to Become a Licensed Motor Vehicle Dealer in Colorado
To become a licensed motor vehicle dealer or wholesaler in Colorado, complete the following steps:
- Meet net worth requirement of at least $100,000
- Meet the Dealer Board’s 701+ credit score requirement
- Pass a background check
- Complete the application
- Earn your Pre-licensing Education Certificate
- Pass the mastery exam and provide a copy of the affidavit
- Get fingerprinted through IdentGO and submit the verification form
- File a $50,000 surety bond
- Submit a copy of your Colorado ID
- Submit all required business documents for your license type
- Submit the dealer plate affidavit
- Complete the State Tax Withholding Account Application form
- Pay all applicable fees
The application process differs for trailer dealers and vehicle salespeople. Check CDOR Auto Industry Division website for additional license requirements.
