Business Disposal Dealer ($50,000) Bond - Statewide in Colorado
Table of Contents
Brief Summary
A business disposal license lets a Colorado company sell off its own used work vehicles without becoming a full used car dealer. The $50,000 bond on form DR 2830 is one of the filings the Auto Industry Division needs before the Motor Vehicle Dealer Board issues it, and it renews each year with the license.
This bond has nothing to do with trash or waste hauling. Colorado's business disposal license, under C.R.S. 44-20-108(1)(i), lets a business sell used motor vehicles it has owned more than a year and used only for business, as long as those sales stay at or below 20 percent of the business's gross revenue. C.R.S. 44-20-112 requires a $50,000 bond, or a qualifying savings account, deposit or certificate of deposit, filed with the Motor Vehicle Dealer Board through the Department of Revenue's Auto Industry Division.
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How to Apply for a Business Disposal Dealer ($50,000) Bond:
- Confirm vehicle sales will stay at or below 20 percent of the business's gross revenue.
- Have the full legal name and any DBA exactly as they will appear on the license application.
- Provide owner information for the credit review.
- Pay the premium and receive the $50,000 bond on the Auto Industry Division's DR 2830 format.
- Have an owner, partner, corporate officer or LLC member sign the bond.
- Submit a copy of the bond with the Business Disposal License Application (DR 2995) and the rest of the checklist.
Detailed Information About the Colorado Business Disposal Dealer ($50,000) Bond:
What a business disposal license covers
The name trips people up. A business disposal license is a motor vehicle sales license, issued by the Colorado Motor Vehicle Dealer Board. Under C.R.S. 44-20-108(1)(i) it lets a business sell used vehicles that have been owned more than one year, used only for business, titled in the business's name, and fully tax paid. Vehicle sales cannot exceed 20 percent of the business's gross revenue.
It does not cover passenger vehicles. The license reaches vehicles not designed or used mainly to carry passengers, with two carve backs written into the statute: a vehicle built to carry more than ten people, and a truck with an enclosed cab and an open cargo area. A company selling retired pickups, box trucks, shuttle buses or heavy equipment carriers is the typical applicant.
The bond
C.R.S. 44-20-112 sets the bond at $50,000 for a business disposal applicant, the same figure required of motor vehicle dealers, used dealers and wholesalers. Instead of a bond, an applicant can file a savings account, deposit or certificate of deposit that meets C.R.S. 11-35-101. A business disposer that already furnishes a bond under the powersports section, 44-20-412, does not need a second one.
The bond reimburses retail consumers for loss caused by fraud, or by a violation of part 1 related to fraud. The surety does not pay until the board or a court makes a final determination of fraud. Total liability is capped at $50,000 no matter how many claims are made. A surety that honors a claim must report it to the board within 30 days.
The Auto Industry Division provides an example bond, form DR 2830. Your full legal name and any DBA must appear on the principal line, and an owner, partner, corporate officer or LLC member must sign.
Other application requirements
The Auto Industry Division application page lists a total net worth of $100,000, with $25,000 in liquid assets, and a Vantage score of 675 or higher for each applicant. Every applicant goes through a background check and fingerprinting.
Renewal
The license runs one year from the month of issuance. The bond renews at the same time, and a surety continuation certificate (DR 2830A) is accepted. A 30 day grace period after expiration allows renewal with a late fee, but only if the bond stays in force during those 30 days. Miss the grace period and you start over with a new application.
Premium
The surety sets the premium after reviewing the owners' credit and the business's finances.
Eligibility and Requirements for a Colorado Business Disposal Dealer ($50,000) Bond:
- Bond amount of $50,000 under C.R.S. 44-20-112.
- Surety licensed to do business in Colorado, bond form approved by the attorney general.
- Total net worth of $100,000 with $25,000 liquid, per the Auto Industry Division.
- Vantage score of 675 or higher for each applicant.
- Fingerprint background check for each applicant.
Colorado Business Disposal Dealer ($50,000) Bond FAQs:
No. A Colorado business disposal license is a motor vehicle sales license. It lets a business sell its own used business vehicles under C.R.S. 44-20-108(1)(i). The bond protects buyers against fraud in those sales.
Not ordinary passenger cars. The license covers vehicles not designed or used mainly to carry passengers. Vehicles built for more than ten people and trucks with an enclosed cab and open cargo area are allowed.
Yes. C.R.S. 44-20-112 also accepts a savings account, deposit or certificate of deposit that meets C.R.S. 11-35-101.
You have a 30 day grace period to renew with a late fee, as long as your bond stays in full force during that time. After the grace period you must file a new original application.
