Colorado Auto Dealer Bond Overview
Colorado auto dealers selling new and used vehicles– as well as wholesalers and powersports vehicles dealers– must obtain a Colorado auto dealer bond when becoming licensed in the state of Colorado. This bond, along with the licensing application, must be posted with the Colorado Department of Revenue (CDOR).
The auto dealer bond functions as a protective measure for customers of Colorado car dealers, who have suffered financial loss due to auto dealer misconduct. In other words, the bond is a guarantee that auto dealers will comply with state regulations, and protection against those who don’t.
In essence, the bond is a binding agreement between the principal (the Colorado car dealer), the obligee (the CDOR), and the surety bond company which issues the bond, and pays out financial compensation if any claims are made.
Read on below, to learn about the cost of Colorado motor vehicle dealer bonds, and how you can get yours.
Colorado Auto Dealer Bond Cost
All Colorado vehicle dealers are required to obtain a $50,000 bond when applying for a state auto dealer license. This number is the full penal sum of the bond.
The cost of obtaining the bond is a fraction of the penal sum, and is determined by sureties upon receipt of a surety bond application form.
When setting the rate for an applicant’s bond, sureties perform a check on individuals, assessing their financial stability. They do so by checking:
- Personal credit score
- Financial statements (business and personal)
- Applicant industry experience and professional record
- Applicant asset profile
Depending on credit score, applicants can expect a cost for their bond that ranges between the following figures:
|Auto Dealer Bond Cost by Credit Score|
|Surety Bond Name||Bond Amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Colorado New & Used Motor Vehicle Dealer, Wholesale Dealer Bond and Powersports Vehicle Dealer Bond||$50,000||$500-$1,000||$750-$1,500||$1,000-$2,000||$1,500-$3,500|
Credit score is among the most important factors determining Colorado auto dealer bond rates. Sureties base their rate on credit scores because they serve as good risk-predicting tool.
Applicants who have a perfect credit score are offered what’s called standard market rates, which are 1,5%-3% of the total bond amount. Rates between 3%-4% are offered to applicants with high– but not exceptional– credit scores.
At the same time, it is important to know that the cost of your surety bond is also seriously affected by your choice of surety bond agency. Every agency has access to different markets through its surety partners, and some simply can’t offer you competitive rates.
What makes Bryant Surety Bonds the right bonding agency is the fact that we work with many of the best surety bond companies in the country. All our surety partners are A-rated and T-listed, making them exceptionally reliable and financially stable, and giving us access to a variety of the best markets. This enables us to offer the lowest and most competitive rates to our applicants.
Try the surety bond calculator on the right to get a rough estimate of what your Colorado car dealer bond may cost. You can also get a precise and free quote, by submitting a surety bond application form.
Apply online here, and we’ll get back to you with your quote. Applying takes only a minute or two, and your quote is entirely free and with no obligations attached.
You can always reach us at 866.450.3412 if you need further information about your bond or have any other surety bond-related questions. Our experts will gladly take your call!
If you want to read more about premium rates, be sure to visit our page dedicated to explaining surety bond costs.
Bad Credit Dealer Bonds
Having bad credit and trying to get bonded can be tough, because many sureties are averse to bonding bad credit applicants. But that doesn’t mean it’s impossible.
Bryant Surety Bonds’ Bad Credit Surety Bond Program offers you a chance to get bonded despite bad credit, at a rate between 4%-7%. We can offer these bonds through our excellent surety partners, who work with us to find solutions for all of our clients, regardless of their credit type.
And by improving your credit score continuously, you can get a better rate when you renew your dealer bond each year.
Colorado Auto Dealer License Application and Renewal
To renew your Colorado auto dealer license, Auto Industry Division (AID) office will send you a Renewal Packet as your license expiration date approaches. Both Colorado auto dealer licenses and Colorado auto dealer bonds expire on June 30, and are renewed annually. Send your original or renewal license application to this address:
Department of Revenue
Auto Industry Division
1881 Pierce St., #112
Lakewood, CO 80216
In order to qualify for your license you must:
- Supply the Department with a criminal background check
- Cover minimum net worth requirements of at least $100,000
- Have a Vantage score of at least 701
If you meet these requirements, you will also be asked to supply the following when applying for your Colorado car dealer license or for a renewal:
- Your auto dealer license application form
- A pre-licensing education program certificate
- A $50,000 Colorado auto dealer license bond (or a continuation certificate if you are applying for a renewal)
- A copy of your ID
- A Restrictions on Public Benefits Affidavit (DR 4679)
- Business documents and a business plan
- A Place of Business Affidavit (DR2044)
For the full list of requirements, make sure to visit the Department’s Auto Industry Division website.
Get Your Colorado Auto Dealer Bond Today
Getting your bond is simple, thanks to our easy online application form. Apply online here. Once you submit your application, we will process it and contact you with a free quote on your Colorado auto dealer bond.
For further information about your bond, just call us at 866.450.3412. Our staff is highly knowledgeable about all bonding requirements for Colorado auto dealers. If you need any other help or have other bond-related questions, we will gladly assist you.