Colorado Motor Vehicle Dealer Bond
What is a Motor Vehicle Dealer Surety Bond? [Why do I need a bond?]
Car dealers must meet The Colorado Department of Revenue Motor Vehicle Dealer Board requirements by having a license and Surety Bond to legally sell vehicles. A Surety Bond is a mix between a line-of-credit and insurance. However, unlike insurance, the bond doesn’t benefit you. Instead, the Surety Bond serves as protection for your customers if you commit a fraudulent act.
If your customer makes a claim against your bond and the surety finds the claim to be valid, the surety will pay out up to the full amount of your bond. The responsibility of paying the surety back in full for a valid claim rests on you, not the state.
The following types of dealers require a $50,000 Surety Bond to receive a Colorado dealer license.
- Motor Vehicle Dealer – New or Used
- Powersports Vehicle Dealer – New or Used
- Wholesaler
- Wholesale Motor Vehicle Auction-Dealer
Select your license type to get free bond quotes.
| Bond Type | Bond Amount | Quotes |
|---|---|---|
| Motor Vehicle or Powersports Dealer Bond - New | $50,000 | Get Quotes |
| Motor Vehicle or Powersports Dealer Bond - Used | $50,000 | Get Quotes |
| Wholesaler or Wholesale Motor Vehicle Dealer Bond | $50,000 | Get Quotes |
What does a Motor Vehicle Dealer Bond cost in Colorado? [How often do I have to pay?]
The necessary bond amount for a Motor Vehicle Dealer Bond is set at $50,000. However, you are not responsible for paying the full bond amount. In fact, you may only have to pay as little as 1% ($500) of the bond amount with Surety Solutions, A Gallagher Company. A soft-pull on your credit is a requirement for this bond type to determine the total cost for your Surety Bond.
Read more on the connection between your credit score and Surety Bond here.
The Colorado Motor Vehicle Dealer Bond is active for a 1-year term and renews annually. If secured through us, you’ll receive a renewal notice within 90 days prior to the expiration of your bond. This notice is to prevent you from having a lapse in coverage and keep you in compliance with the state.
Can I get a bond with bad credit?
Yes, it is possible to get a Surety Bond with non-standard credit. However, you might have to pay a higher rate for your bond, if approved. Typically, applicants with non-standard credit receive a quote at 5% or more of the total bond amount.
Regardless of your credit status, our quotes are free with no obligation to buy. We’ll perform a soft-pull on your credit, meaning your credit score will not adversely be affected.
See what your Colorado Motor Vehicle Dealer Bond will cost.
| Bond Type | Bond Amount | Quotes |
|---|---|---|
| Motor Vehicle or Powersports Dealer Bond - New | $50,000 | Get Quotes |
| Motor Vehicle or Powersports Dealer Bond - Used | $50,000 | Get Quotes |
| Wholesaler or Wholesale Motor Vehicle Dealer Bond | $50,000 | Get Quotes |
Where to get a Motor Vehicle Dealer Bond?
We’ve partnered with leading surety companies to offer you competitive quotes for your Surety Bond.
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Have a question? Our team of surety experts is happy to help! Leave us a message here, send an email to info@suretysolutions.com or call our office at (866) 722-9239 for assistance with getting your bond.
How to get a Colorado Car Dealer License
The state of Colorado requires individuals who sell 3 or more vehicles within a year to secure a license and Surety Bond.
Step 1: Qualify for the license
- $100,000 minimum net worth
- 701 vantage score through Experian
- Pass criminal background check (If you’ve been found guilty of a felony or misdemeanor, review the categories for license disqualification in Colorado)
Step 2: Fill out the Colorado Dealer License Application
Complete the Colorado Dealer License Application here.
Step 3: Include the following documents with your completed application:
- Addendum (DR 2109-B) for every member, officer, owner or partner (Include copy of photo ID for each individual on the addendum)
- Affidavit (DR 4679) – Restriction of Public Benefits for all owners
- Business Plan
- Dealer Plate Affidavit (DR 2640)
- Location photos
- Mastery Examination Affidavit (DR 2097)
- Pre-Licensing Education Certificate (Licensing training provided by Colorado (IADA) Independent Auto Dealer Association)
- Sales Tax License
- Statement of Financial Condition (DR 2114) for applicant and owners
Additional information may be required with your application submission.
Step 4: Secure a $50,000 Motor Vehicle Dealer Surety Bond
Get your CO Motor Vehicle Dealer Bond in under five minutes.
| Bond Type | Bond Amount | Quotes |
|---|---|---|
| Motor Vehicle or Powersports Dealer Bond - New | $50,000 | Get Quotes |
| Motor Vehicle or Powersports Dealer Bond - Used | $50,000 | Get Quotes |
| Wholesaler or Wholesale Motor Vehicle Dealer Bond | $50,000 | Get Quotes |
Step 5: Submit finalized documents to the state
Submit your complete documents, Surety Bond and $455 licensing fee to the Colorado Department of Revenue Auto Industry Division. For licensing assistance or questions, please contact the division at (303) 205-5604.
Additional Resources for Colorado Motor Vehicle Dealers
Find out everything you need to know about becoming a licensed dealer.
Step-by-step tutorial on how to become a licensed car dealer in Colorado.
Answer to frequently asked questions about getting your dealer license.
Make sure you are applying for the correct bond amount with our bond amount calculator.
Worried about a felony on your record? Check out this resource.
Download our free ebook on being a licensed dealer.
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