COLORADO MOTOR VEHICLE DEALER BOARD MASTERY
EXAM 2026/2027 | Questions and Answers Verified Edition |
Pass Guaranteed - A+ Graded
Section 1: Colorado Dealer Licensing Requirements & Procedures (Questions
1-20)
Q1: A business owner wants to sell both new and used vehicles at a single location in
Colorado. Under CRS 12-6-102(10), how must they structure their licensing?
A. They only need a single "Combined Motor Vehicle Dealer License"
B. They must obtain separate New Vehicle Dealer and Used Vehicle Dealer licenses
[CORRECT]
C. They need a Used Vehicle Dealer license but are exempt from a New Vehicle Dealer
license if they sell fewer than 50 new vehicles annually
D. They only need a manufacturer's license since the new vehicles cover the used
inventory
Correct Answer: B
Rationale: CRS 12-6-102(10) clearly defines a "motor vehicle dealer" but separates the
distinct license classes; Colorado law requires distinct licensing for new and used
vehicle sales at the same location, and there is no combined or volume-exempt license
for new vehicle sales.
Q2: An applicant is applying for a used motor vehicle dealer license. According to
CMVDB Rule 1 and CRS 12-6-105, which of the following is a mandatory prerequisite
for license approval?
A. Submission of a marketing plan for the first year of business
B. Proof of a permanent business location with a conforming zoning letter [CORRECT]
C. A letter of recommendation from a currently licensed Colorado dealer
D. A minimum inventory of at least 10 vehicles at the time of application
Correct Answer: B
Rationale: CRS 12-6-105(1)(b) mandates that an applicant must provide the exact
location of the proposed dealership and evidence that the location complies with local
zoning laws; marketing plans, recommendations, and minimum inventory are not
statutory prerequisites.
Q3: A licensed used vehicle dealer wants to move their dealership to a new county in
Colorado. What is the correct procedural requirement?
A. Simply update the dealership address on the website and notify the CMVDB within
30 days
,B. Submit a new license application and fee for the new location, as a change of
location requires board approval [CORRECT]
C. The license transfers automatically as long as the new location is within 50 miles of
the original location
D. Submit a name change form with the local county clerk, and the CMVDB will
automatically update the license
Correct Answer: B
Rationale: CRS 12-6-108 and CMVDB rules state that a dealer license is specific to the
approved location; moving to a new location requires submitting a new application, new
zoning compliance, and a new fee, just as if applying for a fresh license.
Q4: Under CRS 12-6-106, what happens if a dealer operates at a location that has not
been specifically approved by the CMVDB?
A. The dealer is subject to a written warning for the first offense
B. The dealer's license is automatically suspended for 30 days
C. Operating at an unapproved location constitutes a violation and subjects the dealer
to penalties, including potential revocation [CORRECT]
D. The dealer is fined $100 per day until the location is approved, but may continue
operating
Correct Answer: C
Rationale: CRS 12-6-106 stipulates that a license is valid only for the location
designated by the board; operating at an unapproved branch or secondary location is
an unlicensed activity subject to severe administrative and civil penalties.
Q5: How often must a Colorado motor vehicle dealer license be renewed, and what is
the standard renewal timeframe according to CMVDB regulations?
A. Biennially (every two years), with renewal due by December 31st
B. Annually, with the renewal deadline falling on the last day of the dealer's anniversary
month [CORRECT]
C. Annually, with a universal renewal date of January 1st for all dealers
D. Every five years, provided the dealer has no disciplinary actions
Correct Answer: B
Rationale: CMVDB Rule 1 requires annual license renewal; the expiration date is the
last day of the month in which the original license was issued, making
anniversary-month renewals the standard, not a universal calendar date.
Q6: A dealer fails to renew their license by the expiration date. Under what conditions
can the license be reinstated without requiring a completely new application and
examination?
A. If the dealer submits the renewal fee within 10 business days
,B. If the dealer pays the renewal fee plus a late penalty fee within the grace period
established by CMVDB rules [CORRECT]
C. Under no circumstances; late renewals always require starting the process over
D. If the dealer can prove they sold zero vehicles during the lapsed period
Correct Answer: B
Rationale: CMVDB administrative rules provide a specific grace period (typically 30
days) during which a lapsed license can be reinstated by paying the standard renewal
fee plus a late penalty; missing this window mandates a full new application per CRS
12-6-105.
Q7: Which of the following individuals is explicitly disqualified from obtaining a motor
vehicle dealer license in Colorado under CRS 12-6-105(1.5)?
A. A person who filed for Chapter 7 bankruptcy more than 10 years ago
B. A person who had a driver's license suspended for unpaid parking tickets
C. A person convicted of a felony involving fraud, theft, or deception within the past 10
years [CORRECT]
D. A person who previously held a wholesaler license but let it expire
Correct Answer: C
Rationale: CRS 12-6-105(1.5) mandates the denial of a license to any person who has
been convicted of a felony involving fraud, theft, moral turpitude, or deception within 10
years prior to the application; bankruptcy and traffic infractions do not trigger this
specific statutory bar.
Q8: A dealer wishes to change the trade name under which they operate. What is the
correct notification process?
A. The dealer must obtain CMVDB approval before using the new trade name
[CORRECT]
B. The dealer can begin using the new trade name immediately as long as they notify
the CMVDB within 60 days
C. The dealer only needs to register the trade name with the Colorado Secretary of
State
D. Trade name changes are not regulated by the CMVDB and require no action
Correct Answer: A
Rationale: CMVDB rules require that any change in the dealer's trade name must be
approved by the board prior to its use, ensuring the public can accurately track the
entity operating under the license; relying solely on Secretary of State registration is
insufficient for dealer compliance.
Q9: According to CRS 12-6-105(2), what is a mandatory requirement for all partners,
officers, directors, or principal owners of a dealership applying for a license?
A. Submission of a personal financial statement audited by a CPA
, B. Completion of a pre-licensing education course approved by the CMVDB
[CORRECT]
C. A personal guarantee from a federally insured bank
D. Proof of at least 5 years of managerial experience in the automotive industry
Correct Answer: B
Rationale: CRS 12-6-105(2) requires that the individual designated as the primary
qualifier, along with other principal individuals, must complete board-approved
pre-licensing education; financial statements and experience guarantees are not explicit
statutory mandates for all partners/officers.
Q10: A wholesale motor vehicle dealer applies for a license. Under CRS 12-6-102(19),
what is the defining operational restriction for this license class?
A. The wholesaler may only sell to other licensed dealers and at dealer-only auctions
[CORRECT]
B. The wholesaler may sell up to 5 vehicles per year to the general public
C. The wholesaler may sell to the public if the sale takes place at a licensed auction
facility
D. The wholesaler may sell vehicles for transportation purposes only, not for registration
Correct Answer: A
Rationale: CRS 12-6-102(19) defines a "wholesale motor vehicle dealer" as a person
selling vehicles exclusively to other licensed motor vehicle dealers; any direct sales to
retail consumers violate the wholesale license class restrictions.
Q11: During a CMVDB investigation, it is discovered that a dealer's business location no
longer exists at the approved address. What is the most likely immediate action by the
board?
A. The board will issue a notice to cure and give the dealer 90 days to find a new
location
B. The board will immediately suspend the dealer's license for operating at an
unapproved location [CORRECT]
C. The board will fine the dealer $500 and update the address to the dealer's home
residence
D. The board will downgrade the dealer's license to a wholesale-only license
Correct Answer: B
Rationale: CRS 12-6-112 grants the CMVDB authority to summarily suspend a license if
the dealer is found to be in violation of location requirements or operating outside the
scope of the license, as maintaining the approved physical location is a continuous
condition of licensure.
Q12: A dealer wants to add a satellite location to display vehicles in an adjacent city.
How can they legally do this under Colorado law?
EXAM 2026/2027 | Questions and Answers Verified Edition |
Pass Guaranteed - A+ Graded
Section 1: Colorado Dealer Licensing Requirements & Procedures (Questions
1-20)
Q1: A business owner wants to sell both new and used vehicles at a single location in
Colorado. Under CRS 12-6-102(10), how must they structure their licensing?
A. They only need a single "Combined Motor Vehicle Dealer License"
B. They must obtain separate New Vehicle Dealer and Used Vehicle Dealer licenses
[CORRECT]
C. They need a Used Vehicle Dealer license but are exempt from a New Vehicle Dealer
license if they sell fewer than 50 new vehicles annually
D. They only need a manufacturer's license since the new vehicles cover the used
inventory
Correct Answer: B
Rationale: CRS 12-6-102(10) clearly defines a "motor vehicle dealer" but separates the
distinct license classes; Colorado law requires distinct licensing for new and used
vehicle sales at the same location, and there is no combined or volume-exempt license
for new vehicle sales.
Q2: An applicant is applying for a used motor vehicle dealer license. According to
CMVDB Rule 1 and CRS 12-6-105, which of the following is a mandatory prerequisite
for license approval?
A. Submission of a marketing plan for the first year of business
B. Proof of a permanent business location with a conforming zoning letter [CORRECT]
C. A letter of recommendation from a currently licensed Colorado dealer
D. A minimum inventory of at least 10 vehicles at the time of application
Correct Answer: B
Rationale: CRS 12-6-105(1)(b) mandates that an applicant must provide the exact
location of the proposed dealership and evidence that the location complies with local
zoning laws; marketing plans, recommendations, and minimum inventory are not
statutory prerequisites.
Q3: A licensed used vehicle dealer wants to move their dealership to a new county in
Colorado. What is the correct procedural requirement?
A. Simply update the dealership address on the website and notify the CMVDB within
30 days
,B. Submit a new license application and fee for the new location, as a change of
location requires board approval [CORRECT]
C. The license transfers automatically as long as the new location is within 50 miles of
the original location
D. Submit a name change form with the local county clerk, and the CMVDB will
automatically update the license
Correct Answer: B
Rationale: CRS 12-6-108 and CMVDB rules state that a dealer license is specific to the
approved location; moving to a new location requires submitting a new application, new
zoning compliance, and a new fee, just as if applying for a fresh license.
Q4: Under CRS 12-6-106, what happens if a dealer operates at a location that has not
been specifically approved by the CMVDB?
A. The dealer is subject to a written warning for the first offense
B. The dealer's license is automatically suspended for 30 days
C. Operating at an unapproved location constitutes a violation and subjects the dealer
to penalties, including potential revocation [CORRECT]
D. The dealer is fined $100 per day until the location is approved, but may continue
operating
Correct Answer: C
Rationale: CRS 12-6-106 stipulates that a license is valid only for the location
designated by the board; operating at an unapproved branch or secondary location is
an unlicensed activity subject to severe administrative and civil penalties.
Q5: How often must a Colorado motor vehicle dealer license be renewed, and what is
the standard renewal timeframe according to CMVDB regulations?
A. Biennially (every two years), with renewal due by December 31st
B. Annually, with the renewal deadline falling on the last day of the dealer's anniversary
month [CORRECT]
C. Annually, with a universal renewal date of January 1st for all dealers
D. Every five years, provided the dealer has no disciplinary actions
Correct Answer: B
Rationale: CMVDB Rule 1 requires annual license renewal; the expiration date is the
last day of the month in which the original license was issued, making
anniversary-month renewals the standard, not a universal calendar date.
Q6: A dealer fails to renew their license by the expiration date. Under what conditions
can the license be reinstated without requiring a completely new application and
examination?
A. If the dealer submits the renewal fee within 10 business days
,B. If the dealer pays the renewal fee plus a late penalty fee within the grace period
established by CMVDB rules [CORRECT]
C. Under no circumstances; late renewals always require starting the process over
D. If the dealer can prove they sold zero vehicles during the lapsed period
Correct Answer: B
Rationale: CMVDB administrative rules provide a specific grace period (typically 30
days) during which a lapsed license can be reinstated by paying the standard renewal
fee plus a late penalty; missing this window mandates a full new application per CRS
12-6-105.
Q7: Which of the following individuals is explicitly disqualified from obtaining a motor
vehicle dealer license in Colorado under CRS 12-6-105(1.5)?
A. A person who filed for Chapter 7 bankruptcy more than 10 years ago
B. A person who had a driver's license suspended for unpaid parking tickets
C. A person convicted of a felony involving fraud, theft, or deception within the past 10
years [CORRECT]
D. A person who previously held a wholesaler license but let it expire
Correct Answer: C
Rationale: CRS 12-6-105(1.5) mandates the denial of a license to any person who has
been convicted of a felony involving fraud, theft, moral turpitude, or deception within 10
years prior to the application; bankruptcy and traffic infractions do not trigger this
specific statutory bar.
Q8: A dealer wishes to change the trade name under which they operate. What is the
correct notification process?
A. The dealer must obtain CMVDB approval before using the new trade name
[CORRECT]
B. The dealer can begin using the new trade name immediately as long as they notify
the CMVDB within 60 days
C. The dealer only needs to register the trade name with the Colorado Secretary of
State
D. Trade name changes are not regulated by the CMVDB and require no action
Correct Answer: A
Rationale: CMVDB rules require that any change in the dealer's trade name must be
approved by the board prior to its use, ensuring the public can accurately track the
entity operating under the license; relying solely on Secretary of State registration is
insufficient for dealer compliance.
Q9: According to CRS 12-6-105(2), what is a mandatory requirement for all partners,
officers, directors, or principal owners of a dealership applying for a license?
A. Submission of a personal financial statement audited by a CPA
, B. Completion of a pre-licensing education course approved by the CMVDB
[CORRECT]
C. A personal guarantee from a federally insured bank
D. Proof of at least 5 years of managerial experience in the automotive industry
Correct Answer: B
Rationale: CRS 12-6-105(2) requires that the individual designated as the primary
qualifier, along with other principal individuals, must complete board-approved
pre-licensing education; financial statements and experience guarantees are not explicit
statutory mandates for all partners/officers.
Q10: A wholesale motor vehicle dealer applies for a license. Under CRS 12-6-102(19),
what is the defining operational restriction for this license class?
A. The wholesaler may only sell to other licensed dealers and at dealer-only auctions
[CORRECT]
B. The wholesaler may sell up to 5 vehicles per year to the general public
C. The wholesaler may sell to the public if the sale takes place at a licensed auction
facility
D. The wholesaler may sell vehicles for transportation purposes only, not for registration
Correct Answer: A
Rationale: CRS 12-6-102(19) defines a "wholesale motor vehicle dealer" as a person
selling vehicles exclusively to other licensed motor vehicle dealers; any direct sales to
retail consumers violate the wholesale license class restrictions.
Q11: During a CMVDB investigation, it is discovered that a dealer's business location no
longer exists at the approved address. What is the most likely immediate action by the
board?
A. The board will issue a notice to cure and give the dealer 90 days to find a new
location
B. The board will immediately suspend the dealer's license for operating at an
unapproved location [CORRECT]
C. The board will fine the dealer $500 and update the address to the dealer's home
residence
D. The board will downgrade the dealer's license to a wholesale-only license
Correct Answer: B
Rationale: CRS 12-6-112 grants the CMVDB authority to summarily suspend a license if
the dealer is found to be in violation of location requirements or operating outside the
scope of the license, as maintaining the approved physical location is a continuous
condition of licensure.
Q12: A dealer wants to add a satellite location to display vehicles in an adjacent city.
How can they legally do this under Colorado law?
