Colorado Car Sales Mastery Exam
Prep Document 2026/2027 | Motor
Vehicle Salesperson Licensing
Section A: Licensing Requirements & Dealer Board Authority
Question 1
Which of the following individuals must obtain a Colorado motor vehicle
salesperson license?
A) A vehicle owner who occasionally sells his own car
B) A dealer employee who negotiates sales on behalf of the dealer
C) A customer who finances a vehicle through a bank
D) A mechanic who performs repairs only
Correct ,,,answer,,,: B
Rationale: Colorado law requires any person who engages in negotiations or sales
activities for a dealer to hold a salesperson license. This includes anyone who talks
price, shows cars, or completes paperwork for a dealership. Private individuals
selling their own cars are exempt, as are mechanics and customers.
Question 2
The Colorado Motor Vehicle Dealer Board is authorized to:
A) Set interest rates for dealer financing
B) Grant, deny, suspend, or revoke dealer and salesperson licenses
C) Conduct vehicle safety inspections
D) Determine state vehicle registration fees
,Correct ,,,answer,,,: B
Rationale: The Board's statutory authority includes licensing actions such as
granting, denying, suspending, or revoking dealer and salesperson licenses. The
Board does not set interest rates, conduct safety inspections, or determine
registration fees.
Question 3
The general assembly declares that the sale and distribution of motor vehicles
affects the public interest because:
A) Dealers make too much profit on vehicle sales
B) Trust and confidence of the purchaser in the retail dealer is a significant factor
in making a sale
C) Manufacturers require all dealers to be licensed
D) The federal government mandates state oversight
Correct ,,,answer,,,: B
Rationale: C.R.S. 12-6-102 states that a significant factor of inducement in
making a sale of a motor vehicle is the trust and confidence of the purchaser in the
retail dealer from whom the purchase is made and the expectancy that such dealer
will remain in business to provide service.
Question 4
What is the maximum fine the Dealer Board may impose per separate offense for
most licensed dealers?
A) $1,000
B) $5,000
C) $10,000
D) $15,000
Correct ,,,answer,,,: C
,Rationale: The Motor Vehicle Dealer Board may administratively fine dealers up
to $10,000 for each separate offense. This applies to violations of licensing
requirements, advertising rules, and other regulated activities. For dealers selling
primarily vehicles under 1,500 pounds, the maximum fine is $1,000.
Question 5
What is the surety bond amount required for new and used motor vehicle dealers,
wholesalers, and wholesale auction dealers?
A) $15,000
B) $25,000
C) $50,000
D) $100,000
Correct ,,,answer,,,: C
Rationale: New and used motor vehicle dealers, wholesalers, and wholesale
auction dealers are required to maintain a $50,000 surety bond. This bond protects
consumers from misconduct or fraudulent business practices.
Question 6
What is the surety bond amount required for individual motor vehicle
salespersons?
A) $5,000
B) $10,000
C) $15,000
D) $30,000
Correct ,,,answer,,,: C
Rationale: Individual salespersons must obtain a $15,000 surety bond. This bond
protects customers from misconduct or fraudulent business practices by the
salesperson. The common incorrect ,,,answer,,, of $30,000 is not correct.
, Question 7
A dealer, wholesaler, or salesperson convicted of any felony has how many days to
report the conviction to the Dealer Board?
A) 15 days
B) 30 days
C) 45 days
D) 60 days
Correct ,,,answer,,,: B
Rationale: Upon conviction of any felony or specific misdemeanor crimes
(Articles 3, 4, or 5 of Title 18, C.R.S.), a licensee must provide written notice to
the Dealer Board within 30 days of the conviction. Failure to report is itself a
violation.
Question 8
The license of a motor vehicle salesperson may be denied, revoked, or suspended
on all of the following grounds EXCEPT:
A) Making a material misstatement on the application
B) Advertising a salvaged vehicle while identifying it as salvage
C) Failing to notify the Board of a change of address
D) Not having a valid Colorado driver's license
Correct ,,,answer,,,: B
Rationale: Properly identifying a salvaged vehicle as "salvage" is actually a legal
requirement, not grounds for discipline. The other options—material
misstatements, failing to update address, and lacking a valid driver's license—are
all grounds for disciplinary action.
Prep Document 2026/2027 | Motor
Vehicle Salesperson Licensing
Section A: Licensing Requirements & Dealer Board Authority
Question 1
Which of the following individuals must obtain a Colorado motor vehicle
salesperson license?
A) A vehicle owner who occasionally sells his own car
B) A dealer employee who negotiates sales on behalf of the dealer
C) A customer who finances a vehicle through a bank
D) A mechanic who performs repairs only
Correct ,,,answer,,,: B
Rationale: Colorado law requires any person who engages in negotiations or sales
activities for a dealer to hold a salesperson license. This includes anyone who talks
price, shows cars, or completes paperwork for a dealership. Private individuals
selling their own cars are exempt, as are mechanics and customers.
Question 2
The Colorado Motor Vehicle Dealer Board is authorized to:
A) Set interest rates for dealer financing
B) Grant, deny, suspend, or revoke dealer and salesperson licenses
C) Conduct vehicle safety inspections
D) Determine state vehicle registration fees
,Correct ,,,answer,,,: B
Rationale: The Board's statutory authority includes licensing actions such as
granting, denying, suspending, or revoking dealer and salesperson licenses. The
Board does not set interest rates, conduct safety inspections, or determine
registration fees.
Question 3
The general assembly declares that the sale and distribution of motor vehicles
affects the public interest because:
A) Dealers make too much profit on vehicle sales
B) Trust and confidence of the purchaser in the retail dealer is a significant factor
in making a sale
C) Manufacturers require all dealers to be licensed
D) The federal government mandates state oversight
Correct ,,,answer,,,: B
Rationale: C.R.S. 12-6-102 states that a significant factor of inducement in
making a sale of a motor vehicle is the trust and confidence of the purchaser in the
retail dealer from whom the purchase is made and the expectancy that such dealer
will remain in business to provide service.
Question 4
What is the maximum fine the Dealer Board may impose per separate offense for
most licensed dealers?
A) $1,000
B) $5,000
C) $10,000
D) $15,000
Correct ,,,answer,,,: C
,Rationale: The Motor Vehicle Dealer Board may administratively fine dealers up
to $10,000 for each separate offense. This applies to violations of licensing
requirements, advertising rules, and other regulated activities. For dealers selling
primarily vehicles under 1,500 pounds, the maximum fine is $1,000.
Question 5
What is the surety bond amount required for new and used motor vehicle dealers,
wholesalers, and wholesale auction dealers?
A) $15,000
B) $25,000
C) $50,000
D) $100,000
Correct ,,,answer,,,: C
Rationale: New and used motor vehicle dealers, wholesalers, and wholesale
auction dealers are required to maintain a $50,000 surety bond. This bond protects
consumers from misconduct or fraudulent business practices.
Question 6
What is the surety bond amount required for individual motor vehicle
salespersons?
A) $5,000
B) $10,000
C) $15,000
D) $30,000
Correct ,,,answer,,,: C
Rationale: Individual salespersons must obtain a $15,000 surety bond. This bond
protects customers from misconduct or fraudulent business practices by the
salesperson. The common incorrect ,,,answer,,, of $30,000 is not correct.
, Question 7
A dealer, wholesaler, or salesperson convicted of any felony has how many days to
report the conviction to the Dealer Board?
A) 15 days
B) 30 days
C) 45 days
D) 60 days
Correct ,,,answer,,,: B
Rationale: Upon conviction of any felony or specific misdemeanor crimes
(Articles 3, 4, or 5 of Title 18, C.R.S.), a licensee must provide written notice to
the Dealer Board within 30 days of the conviction. Failure to report is itself a
violation.
Question 8
The license of a motor vehicle salesperson may be denied, revoked, or suspended
on all of the following grounds EXCEPT:
A) Making a material misstatement on the application
B) Advertising a salvaged vehicle while identifying it as salvage
C) Failing to notify the Board of a change of address
D) Not having a valid Colorado driver's license
Correct ,,,answer,,,: B
Rationale: Properly identifying a salvaged vehicle as "salvage" is actually a legal
requirement, not grounds for discipline. The other options—material
misstatements, failing to update address, and lacking a valid driver's license—are
all grounds for disciplinary action.
