The dealer bond guarantees that an auto dealer will have clear title to any car sold and is in compliance with applicable laws concerning the sale of motor vehicles in Colorado. As part of the dealer license process, the state requires dealers to post a surety bond in the amount of $75,000. LMC Insurance & Risk Management has arranged bonding capacity with multiple surety companies depending on the financial condition of each individual member.
If you are interested in purchasing a dealer bond, contact Chris at CIADA at 303-239-8000.
To Obtain a Dealer Bond / New Application
Dealer license applicants are required to obtain a $50,000.00 bond and the premium is $450.00. Dealer bonds require a one-page application.
The insurance company does a credit bureau check and upon approval, you may receive the bond in our office. A dealer bond usually takes 1 or 2 days for completion. Those applying as an individual or as a partnership will need to make sure to use your full legal name as shown on your driver’s license or ID card. We also have the dealer application packets available in this office or you can download the forms for Motor Vehicle or Used Motor Vehicle Dealer, Powersports or Used Powersports Vehicle Dealer or Wholesaler at CIADA.org / Licensing & Bonds. New applicants applying for a used, wholesale or wholesale auto auction license also need to take the 8-hour pre-licensing class. Those applying for new (franchised) dealer or have had a dealer license in the past three years are exempt from this requirement.
Make sure to register for the Pre-Licensing Class here or by calling 303-239-8000 as you will need to include your Certificate of Completion when applying for a first time used car dealer or wholesale license. The Mastery Exam also must be completed for each owner and that can be accomplished in this office as well. Finally, we can check your packet for any obvious errors prior to submission of your completed dealer application to the state.
To Obtain a Salesperson Bond/New Application/Transfers
The salesperson bonds are $90 for the $15,000 bond required. Salesperson bonds may be issued upon request at the CIADA office. The auto industry requires each licensee to use the full legal name as it appears on the driver’s license or ID card.
Please fax a Salesperson Bond Request or the DR 2115 Salesperson License Application form available here. Make sure to send 2 copies of the DR2115, the bond, DR4679, ID copy and payment for license to the state along with the DR2097 Examination Affidavit.
If you would like, we can administer the Mastery examination here at this office. If you administer the examination at your dealership, keep a copy of the affidavit on file. Valid salesperson licenses that are transferred to a different dealer do not require a new bond, though the state does require the original salesperson transfer portion from the original license along with the fee to make the change. Those who have had a license within the past 12 months are not required to take the Mastery exam. Dealers needing a password to administer their own exams may request one through the link on the Mastery exam site from the Auto Industry Division.
For All Applications
Along with each new license application or renewal, each dealer and salesperson must submit a DR 4679 affidavit affirming lawful presence and a copy of a secure and verifiable ID. The affidavit is available here. If you do not have internet access, request a faxed copy. Make sure to keep a copy of your dealer bond and also a copy of each salesperson bond on file at your dealership. Remember, all applications and forms require a licensee to use their full legal name as shown on the driver’s license or ID card.
When your dealer license comes up for renewal, you will receive a renewal form from the Auto Industry Division approximately 4 to 6 weeks prior to your renewal date. If your bond is done through CIADA, we will mail out the renewal bond for your dealer license automatically as long as your membership dues are current, and the renewal is approved by the bond company. Fax us a copy of your dealer license renewal form when you receive it if you have not received your bond from us. Credit checks are done by the bond company prior to renewal so keep an eye on your credit score.
We only do salespersons bonds by request so please make sure to notify us as those renewals come up. The easiest thing for you to do is to fax the salesperson renewal form from the state to us, making sure that the name on each bond request matches the Driver’s License/ID exactly and we will have them ready for pick-up or mail usually on the same day. You may also use the Salesperson Bond Request form to request bond renewals.
Did you know that CIADA does title bonds? In many instances, a title cannot be facilitated for one reason or another such as ownership documents are not available or are incorrect. This procedure is also used when a vehicle has been left for storage or service for over 30 days with no contact from the person with whom an oral or written agreement was made. The applicant must have possession of the vehicle. If the vehicle is not roadworthy, then a Salvage title must be applied for.
For vehicles over 25 years old, follow the procedures on form DR2462, In Lieu of Bond, making sure to include a notarized bill of sale that is within 24 months after the sale. The State of Colorado has outlined the steps to take when going through the bond process on the form numbers DR 2711 (for title established by mechanics or storage lien) and DR 2922 (title or salvage title established by surety bond).
These forms can be found on the Colorado Department of Revenue’s website under the motor vehicle title forms section or just press the easy button and call us at 303-239-8000 or 1-800-569-1899 and we can fax you a copy. Follow the steps on the outline, then fax or stop by with the completed paperwork so that we can review it prior to issuing the bond. We need to see all of the paperwork including the certified vin inspection, the written appraisal, and the results of the Colorado title search.
Out of State vehicles need an additional search from that state unless the out of state title is being surrendered. If there is a lien, we need to see the lien release. We are able to issue title bonds here in our office for $100.00 minimum. Call for a quote based on your appraisal and we can walk you through the steps over the phone. Once you have the bond, simply take all of the paperwork to your county Division of Motor Vehicles to apply for your title.
Bonds are just one of the many services we offer so please take advantage of this members-only benefit and call us today. We want to be your source for all of your dealership needs.