Colorado SB 249 Creates Business Disposal License

Colorado SB 249 Creates Business Disposal License

Businesses in Colorado are now eligible to sell their used vehicles through the creation of the Colorado business disposal license. This new license differs from a standard auto dealer license because it authorizes general businesses to sell vehicles that they once used for business purposes. Colorado SB 249, which created the new license, was passed on May 28, 2019, and went into effect on August 26, 2019. The creation of this license requires businesses selling their vehicles to meet a number of requirements before doing so. The process of getting licensed is regulated by the Enforcement Division of the Colorado Department of Licensing.

Who qualifies for a business disposal license? 

Businesses with a business disposal license can sell their used vehicles as long as the profit will not exceed 20% of their gross revenue. Before the bill was passed, if a business wanted to sell more than 20 vehicles in a two year period, they needed a Colorado auto dealer license. Any vehicles sold by business disposal license holders must meet the following requirements:

  • The vehicle has been owned by the business for more than one year
  • The vehicle has been used exclusively for business purposes 
  • All taxes related to the vehicle are paid 
  • Vehicles are not designed to carry passengers, excluding ten-passenger vans or trucks with enclosed cabins and open cargo areas.

The Colorado Motor Vehicle Dealer Board states that eligible businesses must have a net worth of at least $100,000. The board will also obtain an Experian credit report to ensure that the applicant has a minimum 701 credit score. 

How do I get a Colorado business disposal license? 

The Colorado Department of Licensing Division of Motor Vehicles website provides the forms and information needed to apply for the license. In addition to completing the license application, applicants must submit a number of additional documents:

If you are filing as an LLC, additional documents are required with the application:

Once all required documentation has been gathered, applicants must submit it by mail to the following address:

Auto Industry Division

P.O. Box 17087

Denver, CO 80217-0087

Why do I need a surety bond?

Applicants for the disposal license must post a surety bond in the amount of $50,000, which is the same amount as the bond required of Colorado auto dealers. A bond is required so that customers are protected from any financial harm as a result of fraudulent practices by the licensee.

Similarly to the auto dealer surety bond, the business disposal license bond is subject to underwriting, meaning that the cost is based on the applicant’s credit. Typically, an applicant with excellent credit is approved for a premium that is 1-3% of the total bond amount. Those with slightly lower credit may be subject to a higher premium.

How do I get a business disposal license bond?

The team has years of experience issuing surety bonds nationwide, meaning they know what it takes to get you the bond you need while saving you time and money. To get started, visit or give us a call at 1 (800) 308-4358.

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About the Author

Mel Frieders
Mel is a junior at the University of Missouri - Columbia studying Journalism with an emphasis on strategic communications. She is a marketing intern for, a leading provider of online bonding for clients nationwide.