Used Powersports Vehicle Dealer ($50,000) Bond - Statewide in Colorado

Brief Summary

Selling used ATVs, snowmobiles or personal watercraft does not earn a smaller bond in Colorado. A used powersports vehicle dealer posts the same $50,000 as a new unit dealer under C.R.S. 44-20-412, on the state's DR 2830 form. The bond is issued once, renewed with the license each year, and a used car lot already bonded under 44-20-112 can skip it entirely.

Anyone in Colorado who sells ten or more used off-highway vehicles, personal watercraft or snowmobiles in a calendar year, or offers more than ten for sale from the same address or phone number, is presumed to be a used powersports vehicle dealer and must be licensed. C.R.S. 44-20-412 requires a $50,000 bond from each used powersports vehicle dealer applicant, payable to the State of Colorado and renewed annually with the license.

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How to Apply for a Used Powersports Vehicle Dealer ($50,000) Bond:

• Count your used powersports sales. Ten or more in a calendar year, or more than ten offered from one address or phone number, points to a dealer license.
• Check whether the business already holds a 44-20-112 motor vehicle dealer bond, which removes the need for this one.
• Give the surety the full legal name and DBA exactly as they will appear on the license application.
• Have the $50,000 bond issued on form DR 2830 with the used powersports vehicle dealer box marked and signed by an owner, partner, officer or LLC member.
• File the bond with the dealer license application to the Auto Industry Division.
• Renew the bond each year when the license renews, inside the 30 day grace period at the latest.

Detailed Information About the Colorado Used Powersports Vehicle Dealer ($50,000) Bond:

Ten units is the line

C.R.S. 44-20-402 defines a used powersports vehicle dealer as anyone who, for commission or profit, sells, exchanges, leases or offers an interest in used powersports vehicles. The statute treats the sale of ten or more used units, or offering more than ten for sale at the same address or telephone number in one calendar year, as prima facie evidence that you are in the business. Part time sellers moving units out of a garage or shop can reach that count faster than they expect.

The definition leaves out some sellers. Anyone selling powersports vehicles only to wholesalers is excluded, as is a mortgagee or secured party selling collateral without making a profit beyond the balance owed and collection costs. Court appointed fiduciaries, public officers doing their official duties, a dealer's own employees and motor vehicle auctioneers are also outside it.

The amount is the same as a new dealer

There is no reduced bond for used only operations. C.R.S. 44-20-412 sets the bond at $50,000 for each wholesaler, powersports vehicle dealer and used powersports vehicle dealer applicant alike.

The one way around a separate bond is to already have the motor vehicle version. A used powersports vehicle dealer need not furnish an additional bond if it already furnishes a bond, savings account, deposit or certificate of deposit under C.R.S. 44-20-112, which covers motor vehicle dealers and used motor vehicle dealers. A licensed used car lot adding powersports inventory relies on that existing security.

How a claim works

The bond reimburses retail consumers for loss or damage caused by the dealer's fraud or by a violation of part 4 related to fraud. When the dealer sells to another dealer, each party to that wholesale transaction may claim, with any retail consumer involved getting priority. All claims together cannot exceed $50,000. The surety owes nothing until the Motor Vehicle Dealer Board or a court makes a final determination of fraud. A surety bond is not insurance for the dealer, and the surety can recover what it pays from the dealer.

Paperwork and premises

The bond goes on Colorado form DR 2830, the single form used for every dealer and wholesaler license, with the used powersports vehicle dealer box marked. The principal line must carry the full legal name and DBA, and an owner, partner, corporate officer or LLC member signs it. A savings account, deposit or certificate of deposit meeting C.R.S. 11-35-101 may be filed instead.

The Auto Industry Division also inspects the location. It requires a permanent enclosed office, space to display one or more vehicles, a permanent sign showing the licensed name, books and records available for inspection, and hours of at least three days a week for four continuous hours between 8 AM and 9 PM. Powersports dealers are exempt from the exclusive use rule that applies to car dealers. The license lasts 12 months from the month of issuance, with a 30 day grace period after expiration before the dealer must apply for a new original license.

Eligibility and Requirements for a Colorado Used Powersports Vehicle Dealer ($50,000) Bond:

• A $50,000 bond, the same amount required of new powersports vehicle dealers.
• State of Colorado named as obligee on form DR 2830.
• A corporate surety licensed in Colorado.
• A place of business with an enclosed office, display space, permanent signage and posted hours.
• Dealer Board standards of $100,000 net worth with $25,000 liquid and a Vantage score of 675 or higher for each applicant.
• Annual renewal of the bond together with the license.

Colorado Used Powersports Vehicle Dealer ($50,000) Bond FAQs:

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