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Colorado Auto Dealer Bond

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What is a Colorado Auto Dealer Bond?

Licensed auto dealers operating a business in Colorado are required to have a license to sell new or used vehicles. Wholesale and auction dealers must also meet this statewide requirement. Part of the licensing process involves obtaining a Colorado auto dealer bond which works to safeguard customers from fraudulent business practices. A Colorado auto dealer bond also ensures that any licensed dealer complies with state regulations and industry standards.

Three parties are involved in a Colorado auto dealer bond: the principal is the auto dealer, the surety company provides the bond, and the obligee, the Colorado Department of Revenue, requires a bond to be posted. Once a bond is in place, claims against the bond are paid by the surety company initially, but the principal is required to repay bond claims.

What Does a Colorado Auto Dealer Bond Cost?

A Colorado auto dealer bond allows customers who suffer financial losses to make a claim for compensation, up to the total bond amount. That bond amount for licensed dealers is $50,000, but you only pay a small percentage of the total. The percentage, known as the bond premium, ranges from 1 to 10% for most auto dealers in Colorado.

The bond premium is determined after the surety company evaluates your personal credit history and business financial standing. Auto dealers with a low credit score due to financial missteps in the past are seen as a higher risk than those who have a clean credit history. Because of the increased risk, the bond premium for bad credit auto dealers is higher.

How Do I Get a Colorado Auto Dealer Bond?

You can start the process of securing a Colorado auto dealer bond by submitting a brief online application. The surety company reviews your personal credit history and score, along with your business financials, and provides you with your bond premium.

Frequent Questions

What does an auto dealer bond cost?

Costs are a percentage of the auto dealer bond amount that's required of you, which is based on your personal credit. Use our bond pricing tool to get a quick ballpark estimate.

Can I get a bond with bad credit?

Yes. You can get you approved for a bond regardless of your credit situation. However, the price will increase. You can apply to get an instant approval. As the largest writer of surety bonds in the U.S., we have access to high risk markets that many other agencies do not.

How long does the application take?

It only takes minutes, as we can approve you for your bond instantly online. You can get a no obligation quote on our website at any time.

Can I get auto dealer bond insurance to protect myself?

No. An auto dealer bond does not protect you, it protects the public. However, you can protect yourself or your customers by getting fidelity bonds.

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Jennifer Henson
Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
David Tillotson
Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

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