How to Get a Dealer License in Colorado in 8 Easy Steps

Are you looking to open your own dealership in Colorado? Whether you’re selling new or used vehicles or dealing in wholesale transactions, you’ll need to obtain a Colorado Dealer License from the Colorado Department of Revenue.

This guide will walk you through each step of the process to help you understand what’s involved in obtaining a motor vehicle dealer license in Colorado. Follow these steps to apply for your Colorado auto dealer license:

1. Ensure You Meet the Eligibility Requirements

Before applying for a Colorado Dealer License, ensure you meet the following criteria:

• Minimum Net Worth: You must have a net worth of at least $100,000.
• Credit Score: Your Experian Vantage credit score should be at least 701.
• Background Check: You must pass a criminal background check. Any felony convictions related to fraud, theft, or auto-related crimes within the last 10 years will disqualify you.

2. Select the Correct License Type

Choose the correct license type based on the vehicles you wish to sell:

• Franchised Dealer: For new or used cars.
• Used Motor Vehicle Dealer: For used cars only.
• Wholesale Auction Dealer: For selling to other dealers via auctions.
• Wholesale Dealer: For selling to other dealers directly.
• Wholesale Power Sports Dealer: For selling power sports vehicles to other dealers.
• Franchised Power Sports Dealer: For new or used power sports vehicles.

3. Establish a Permanent Business Location

Your dealership must have a permanent, compliant business location that includes:

• Office space
• Electrical service
• Restrooms
• Display space for at least one vehicle
• Storage for records
• Clearly displayed hours of operation

The business location must also comply with all local zoning and municipal requirements.

4. Complete Pre-Licensing Education

If you’re applying for the first time, you must complete an 8-hour pre-licensing education program. This includes:

• Completing a mandatory course.
• Passing the Auto Industry Mastery Examination.
• Submitting the affidavit with your application.

5. Secure a Motor Vehicle Dealer Bond

You must purchase an auto dealer bond to protect the public and the state. The bond amount is $50,000 for auto dealers. The bond cost varies based on your credit score, ranging from $500 to $1,500.

6. Submit Your Application

Submit your application to the Colorado Department of Revenue, including the following documents:

• Proof of identity and ownership
• Pre-licensing education certificate
• Mastery examination affidavit
• Business plan
• Sales tax license
• Surety bond form
• A copy of your lease agreement
• Location compliance documents: Including photographs of the business location, signage, and display areas.
• Statement of Financial Condition (DR 2114) for the applicant and all owners.
• Affidavit – Restriction on Public Benefits (DR 4679) for all owners, partners, members, or officers.
• Dealer Plate Affidavit (DR 2640).

7. Pay the Licensing Fees

The fees associated with your application include:

• $623 for wholesalers and dealers
• $231 for salespersons
• $39.50 for fingerprint processing
• Renewal fees:
  • $508 for dealers
  • $178 for salespersons

8. Mail Your Documents

Mail your completed application and documents to:

Auto Industry Division
P.O. Box 17087
Denver, CO 80217-0087

Important Updates for Colorado Dealers

• New Pre-Licensing Education Requirement (Effective January 1, 2025)
  All first-time applicants for a Colorado Dealer License must complete a pre-licensing education program and pass the Auto Industry Mastery Examination. This requirement ensures that all new dealers are well-versed in state regulations and industry standards.
• Increased Surety Bond Amount (Effective February 15, 2025)
  The required surety bond amount for auto dealers has been increased from $25,000 to $50,000. This update aims to enhance consumer protection and align with national standards for dealer bonding.
• Transition to Electronic Dealer Licensing System (Effective March 1, 2025)
  The Colorado Department of Revenue has transitioned to an electronic dealer licensing system. All applicants are now required to submit their applications and track their license status online, reducing paperwork and improving efficiency.
• Updated Business Location Requirements (Effective January 15, 2025)
  New regulations effective January 15, 2025, specify that dealership offices must be separate from residential living spaces. Retail dealers must now have a display lot with space for at least five vehicles, while wholesale dealers are exempt from this requirement.
• Fingerprinting Requirement for All Dealer Applicants (Effective March 10, 2025)
  All dealer applicants, including owners with 5% or more ownership, will be required to undergo fingerprinting as part of the background check process. This update is aimed at strengthening the integrity of the licensing process.
• Sales Tax License Requirement (Effective February 20, 2025)
  All dealers must register for a sales tax license with the Colorado Department of Revenue. This requirement ensures compliance with Colorado state tax laws and facilitates the proper collection of sales tax.

Frequently Asked Questions

How long does it take to get a Colorado dealer license?

The process typically takes several weeks, depending on the completeness of your application and the time it takes for the Colorado Motor Vehicle Dealer Board to review it.

Can I sell cars without a dealership in Colorado?

No, Colorado law requires that motor vehicle dealers have a permanent location to operate legally.

How do I check the status of my application?

To check your application status, you can use the Web Lookup/Verification tool provided by the Colorado Department of Revenue.