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Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
A Colorado dealer selling new snowmobiles, personal watercraft or off-highway vehicles files this $50,000 bond with the license application, unless the business already carries a $50,000 motor vehicle dealer bond under C.R.S. 44-20-112. In that case the statute says no second bond is needed. Everyone else posts it once on the state's DR 2830 form and keeps it in force at each annual renewal.
C.R.S. 44-20-412 sets the bond at $50,000 for every powersports vehicle dealer applicant in Colorado. The license covers sales of new, or new and used, off-highway vehicles, personal watercraft and snowmobiles. The bond runs to the State of Colorado on form DR 2830, is renewed each year with the license, and reimburses retail consumers for losses caused by dealer fraud after the Motor Vehicle Dealer Board or a court makes a final determination of fraud.
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This is the point most applicants miss. C.R.S. 44-20-412 says a powersports vehicle dealer need not furnish an additional bond, savings account, deposit or certificate of deposit if the dealer already furnishes one under section 44-20-112, which is the $50,000 bond for motor vehicle dealers and used motor vehicle dealers. A car or truck dealership adding an off-highway vehicle or snowmobile line can rely on the security it already has on file. A standalone powersports store cannot, and posts the full $50,000.
Under C.R.S. 44-20-402, a powersports vehicle is an off-highway vehicle, a personal watercraft or a snowmobile. A powersports vehicle dealer is a person who, for profit or commission, sells, leases, exchanges or offers an interest in new or new and used powersports vehicles. Selling or leasing ten or more of them, or offering more than ten for sale or lease at the same address or telephone number in one calendar year, is prima facie evidence that you are acting as a dealer. Court appointed fiduciaries, public officers doing their official duties and employees of a licensed dealer working within their jobs are excluded.
The bond reimburses any retail consumer for loss or damage caused by fraud, or by a violation of part 4 related to fraud, by the dealer. In a wholesale deal each party to the transaction can claim, but a retail consumer involved in it has priority. The surety's total liability for all claims is capped at $50,000 no matter how many claimants there are, and the surety does not pay anyone until the board or a court of competent jurisdiction has made a final determination of fraud.
Colorado uses one bond form, DR 2830, for every dealer and wholesaler type. Mark the powersports vehicle dealer box. The Auto Industry Division requires the full legal name and any DBA on the principal line, and the bond must be signed by an owner, partner, corporate officer or LLC member. The surety must be licensed to do business in Colorado, and the form provides for 45 days written notice of cancellation, shortened to 10 days for nonpayment or during the first 60 days of coverage. Instead of a bond, the statute allows a savings account, deposit or certificate of deposit that meets C.R.S. 11-35-101.
The bond is one item in a long application. The Dealer Board requires a total net worth of $100,000 with $25,000 in liquid assets, a Vantage score of at least 675 for each applicant, a background check, a business plan, and a passed Mastery Exam for owners who will sell under the license. A franchised dealer must show an agreement stating the vehicle types and makes it may sell, from a manufacturer licensed to do business in Colorado. Powersports dealers are exempt from the exclusive use rule that keeps car dealers from sharing an office or display area with another business. The license expires 12 months after the month it was issued, and fees follow the DR 2246 fee schedule, which can change every July 1.
No. C.R.S. 44-20-412 says a powersports vehicle dealer need not furnish an additional bond if it already furnishes a bond, savings account, deposit or certificate of deposit under section 44-20-112. Tell the Auto Industry Division which bond you are relying on when you apply.
C.R.S. 44-20-402 defines a powersports vehicle as an off-highway vehicle, a personal watercraft or a snowmobile. A powersports vehicle dealer sells, leases or exchanges new, or new and used, units of those vehicles.
Only after the Motor Vehicle Dealer Board or a court of competent jurisdiction makes a final determination of fraud. The bond then reimburses retail consumers for loss or damage caused by the dealer's fraud, up to a combined total of $50,000 for all claims.
Yes. The statute allows a savings account, deposit or certificate of deposit that meets C.R.S. 11-35-101 in place of the bond. That ties up the full $50,000, while a surety bond costs only a yearly premium.
The statute requires the bond to be renewed annually when the dealer license is renewed. Colorado dealer licenses expire 12 months after the month of issuance, and form DR 2830 requires 45 days written notice before the surety cancels, or 10 days for nonpayment or during the first 60 days of coverage.
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