Colorado Sales License Practice Test 2026 – Your All-in-One Guide to Passing the Exam!

New and used motor vehicle dealers, powersports dealers, and wholesale auction dealers are required to obtain a surety bond as part of the licensing process in Colorado. A surety bond is essentially a financial guarantee that ensures the dealer will adhere to state laws and regulations governing their business practices. This requirement serves to protect consumers and the public by ensuring that the dealer can fulfill their obligations, such as paying taxes and honoring warranties. If the dealer fails to meet their obligations, consumers or the state can claim on the bond to seek compensation.

Having a surety bond is a critical aspect of establishing trust and reliability in the marketplace, particularly in industries like vehicle sales, where large financial transactions and consumer protections are at stake. While a business insurance policy, document of incorporation, and a state license are important components of running a lawful business, the surety bond specifically provides the necessary financial backing that protects against potential misconduct and ensures compliance with the law.