Licensing Requirements

A car dealer in the state of Colorado is basically defined as one who sells or leases, with a profit in mind, at least three vehicles (new or used) from the same address during the cycle of a calendar year.

A person, or persons, with this business intent requires a license issued by the state Motor Vehicle Dealer Board (MVDB), a nine-member group appointed to three-year terms by the Governor essentially to oversee the regulatory aspects of the state auto industry.

There are various types of licenses: New, Used, Wholesaler, Wholesale Auction Dealer, Buyer Agent, and Salesperson. Each license is only valid for one year and must be renewed each year before or on the day it terminates.

The complete application process for new and used dealers, along with wholesalers, to obtain the coveted license is rather involved. Luckily, the Auto Industry Division (AID), which acts as the MVDB's enforcement arm, offers a wealth of resources to make the procedure go as smoothly as possible, starting with the Dealer/Wholesaler Application Information Sheet.

The information sheet gives a methodical overview of the nuts and bolts of the MVDB review process and the requirements for application. It also includes a Dealer Packet Request form, which you can cut off, fill out, and fax to AID at (303) 205-5977. You can also mail the form to:

• Department of Revenue

• AID

• Denver, CO 80261-0016

The packet forms in printable PDF versions are also available on the AID Web site. The division also provides a handy checklist to guide you through each of the requirements.

Dealer Licensing Requirements

• Completion of Application Dealer License form.

• Completion of Addendum to the Original Application form.

• Providing a Statement of Financial Condition.

• Completion of Place of Business Affidavit form and the taking and submitting of necessary photos.

• Completion of Dealer Plate Affidavit form.

• Evidence of a sales tax license or completion of a Colorado Business Registration using the included instructions.

• Proof of a surety bond in the amount of $30,000. Proper forms are available at most banks or insurance companies; view an online sample.

• If not already licensed, the completion of the Mastery Exam with a passing score of 100%. Check out testing instructions. The test is based on the License Law Manual.

• A minimum net worth of $50,000.

• A credit report for all applicants with a minimum score of 600 for each.

• A background check for every applicant and the presenting of any court reports for prior arrests.

• If franchising, a copy of the agreement on the manufacturer's letterhead.

• Payment of all appropriate fees.

The finished application can be mailed to:

• Department of Revenue

• Auto Industry Division

• Denver, CO 80261-0016

Or dropped off at:

• Department of Revenue

• Auto Industry Division

• 1881 Pierce, Room 142

• Lakewood, CO 80214

Make checks payable to the Department of Revenue and allow two to four weeks for the review process.

For more additional dealer guidelines, see Dealers & Auto Industry, Dealer Forms, and Dealer-related Information on this site.