Surety Bond Encyclopedia

Vehicle Wholesaler ($50,000) Bond - Statewide in Colorado

Brief Summary

A Colorado wholesaler license lapses 12 months after the month it was issued, and if you miss the 30-day grace period you cannot renew at all. You start over with an original application. Keeping the $50,000 bond or its continuation certificate current is what lets the renewal packet go through on time.

Colorado requires a $50,000 bond from every licensed motor vehicle wholesaler under C.R.S. 44-20-112. It is filed with the Department of Revenue Auto Industry Division on form DR 2830, naming the State of Colorado. The bond answers for fraud and violations of the dealer licensing law, and in a wholesale deal it is available to each party to the transaction. Wholesalers get no reduced amount. The only $5,000 bond in the statute is for dealers who sell only small utility trailers under 2,000 pounds.

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How to Apply for a Vehicle Wholesaler ($50,000) Bond:

Confirm you sell solely to licensed dealers, which is the wholesaler license class.
Have the full legal name and any DBA exactly as they will appear on the license application.
Provide owner details for the credit review and complete the bond application.
Get the executed $50,000 bond on form DR 2830 naming the State of Colorado.
Submit it to the Auto Industry Division with your application and the fee on the current DR 2246 fee schedule.
At each renewal, send a new DR 2830 or a DR 2830A continuation certificate before the license expiration date.

Detailed Information About the Colorado Vehicle Wholesaler ($50,000) Bond:

Who has to post this bond

C.R.S. 44-20-102(28) defines a wholesaler as a person who, for commission or with intent to make a profit, sells, exchanges or negotiates the sale, lease or exchange of new or used motor vehicles solely to motor vehicle dealers or used motor vehicle dealers. If you sell only to dealers, this is your license class, and it carries the full $50,000 bond. C.R.S. 44-20-112 sets the same $50,000 figure for motor vehicle dealers, used motor vehicle dealers, wholesale auction dealers, business disposers and wholesalers. A dealer already bonded under C.R.S. 44-20-412 does not need to furnish a second bond.

The form

The Auto Industry Division uses form DR 2830, the Bond of Motor Vehicle Dealer, Powersports Vehicle Dealer, Used Motor Vehicle Dealer, Used Powersports Vehicle Dealer, Business Disposal Dealer, Wholesaler, or Wholesale Motor Vehicle Auction-Dealer. The obligee is the State of Colorado. Renewals can use a DR 2830A continuation certificate instead of a new bond. The Division states that the bond must show the full legal name, and the DBA must appear on the principal line. Mismatched names are a common reason a packet gets sent back.

Who can claim on it

The bond covers loss or damage caused by fraud or a violation of the dealer licensing law. For a wholesale transaction, the bond is available to each party to the transaction, which means the dealers you sell to can claim. If a retail consumer is involved, the consumer has priority. A corporate surety does not have to pay until the Motor Vehicle Dealer Board or a court makes a final determination of fraud. The surety's aggregate liability is capped at the $50,000 bond amount no matter how many claims are filed. Any amount the surety pays, the wholesaler repays.

Renewal deadlines

The license expires 12 months after the month of issuance. The Division mails a renewal packet 30 days before expiration, and renewals cannot be done online. The renewal must arrive before the expiration date. A 30-day courtesy grace period follows, with a renewal fee and a late fee. After that you may not renew and must apply for an original license.

Bond or deposit

C.R.S. 44-20-112 allows a savings account, deposit or certificate of deposit meeting the statute's requirements instead of a surety bond. Most wholesalers choose the bond so they do not tie up $50,000.

How premium is set

The surety prices the bond from the owners' personal credit, the business's financial strength and any history of dealer complaints or bond claims.

Eligibility and Requirements for a Colorado Vehicle Wholesaler ($50,000) Bond:

Bond amount of exactly $50,000 for the wholesaler license class.
State of Colorado named as obligee on form DR 2830.
Full legal name and DBA on the principal line.
Bond conditioned on no fraud and no violation of Parts 1 or 4 of Title 44, Article 20, C.R.S.
Owner credit review by the surety.

Colorado Vehicle Wholesaler ($50,000) Bond FAQs:

Is the wholesaler bond smaller than a dealer bond?

No. C.R.S. 44-20-112 sets $50,000 for wholesalers, the same as motor vehicle and used motor vehicle dealers. The only reduced figure, $5,000, applies to dealers who sell only small utility trailers weighing less than 2,000 pounds.

I only sell to dealers. Who could claim against my bond?

For a wholesale transaction the bond is available to each party to the transaction, so a dealer who buys from you can claim for fraud or a licensing law violation. If a retail consumer is involved in the transaction, the consumer recovers first.

What happens if I miss my renewal date?

The Division gives a 30-day courtesy grace period with a late fee added. After that you may not renew. You have to apply for an original license again, with a bond.

Can I renew with a continuation certificate?

Yes. The Division accepts either a new DR 2830 bond or a DR 2830A continuation certificate for $50,000, as long as the full legal name and DBA are on the principal line.

Can I renew online?

No. The Auto Industry Division states license renewals cannot be obtained online. The renewal packet comes by mail about 30 days before expiration.