Wholesale Motor Vehicle Dealer Auction Dealer ($50,000) Bond - Statewide in Colorado

Brief Summary

Colorado licenses wholesale auctions separately from dealers and wholesalers, but the bond is the same $50,000 on the same DR 2830 form. What auction applicants often miss is the second requirement: check and title insurance or written guarantees for your buyers and sellers. Line up both and the bond becomes a simple filing that renews with your license each year.

A wholesale motor vehicle auction dealer is a distinct Colorado license under C.R.S. 44-20-108, for auctions that sell to licensed dealers or sell government vehicles to consumers. Before the license issues, C.R.S. 44-20-112 requires a $50,000 bond from a Colorado licensed corporate surety, approved as to form by the attorney general, or a qualifying savings account, deposit or certificate of deposit. The bond is filed on Department of Revenue form DR 2830 and renewed annually with the license.

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How to Apply for a Wholesale Motor Vehicle Dealer Auction Dealer ($50,000) Bond:

• Confirm your operation fits the wholesale motor vehicle auction dealer license in C.R.S. 44-20-108.
• Arrange check and title insurance, or written title and payment guarantees, for your auction customers.
• Have the surety issue the $50,000 bond on form DR 2830 with your full legal name and DBA on the principal line.
• Sign the principal line as an owner, partner, corporate officer or LLC member.
• Submit the bond with the license application, DR 2114 financial statement and current DR 2246 fee to the Auto Industry Division.
• Renew the bond each year when the license renews.

Detailed Information About the Colorado Wholesale Motor Vehicle Dealer Auction Dealer ($50,000) Bond:

The bond is not the only financial guarantee

C.R.S. 44-20-108 separately requires a wholesale motor vehicle auction dealer to keep a check and title insurance policy for the benefit of its customers. The alternative is to give written guarantees of title to purchasing dealers and written guarantees of payment to selling dealers, with coverage customary in those policies. The $50,000 bond does not replace that requirement.

Who holds this license

The wholesale motor vehicle auction dealer license covers auction services in wholesale transactions where the buyers are motor vehicle dealers licensed in Colorado or another jurisdiction. It also allows sales of government vehicles to consumers at a time and place that does not conflict with the licensee's wholesale auctions.

Amount, form and alternatives

C.R.S. 44-20-112 requires the bond before a motor vehicle dealer's, wholesaler's, wholesale motor vehicle auction dealer's, business disposal or used motor vehicle dealer's license is issued. The amount is $50,000. The only lower figure in the statute is $5,000 for dealers who sell only small utility trailers under 2,000 pounds. Instead of a surety bond, the applicant may use a savings account, deposit or certificate of deposit meeting C.R.S. 11-35-101.

The Auto Industry Division uses form DR 2830, a single bond form for dealers, wholesalers and wholesale motor vehicle auction dealers. The principal line must show the full legal name and any DBA and be signed by an owner, partner, corporate officer or LLC member.

Who can claim

The bond reimburses retail consumers for loss caused by fraud or fraud related violations of the dealer statute. In a wholesale transaction the bond is available to each party, but a retail consumer involved in the deal has priority. The surety pays nothing until the board or a court makes a final determination of fraud, and total liability for all claims is capped at the bond amount.

Other parts of the application

The Division's dealer and wholesaler page and application information list a minimum net worth of $100,000, a financial statement on form DR 2114, a background check and the Mastery Exam. License fees are posted on form DR 2246, which the Division updates for each July to June license period. Confirm current fees and filing steps with the Auto Industry Division before the bond is issued.

Eligibility and Requirements for a Colorado Wholesale Motor Vehicle Dealer Auction Dealer ($50,000) Bond:

• Bond amount of $50,000 under C.R.S. 44-20-112.
• Corporate surety licensed in Colorado, bond approved as to form by the attorney general.
• Department of Revenue bond form DR 2830.
• Check and title insurance or written guarantees under C.R.S. 44-20-108.
• Minimum net worth of $100,000 and a DR 2114 financial statement, per the Auto Industry Division.

Colorado Wholesale Motor Vehicle Dealer Auction Dealer ($50,000) Bond FAQs:

Official and Additional Resources for the Colorado Wholesale Motor Vehicle Dealer Auction Dealer ($50,000) Bond: