Colorado Car Sales Mastery Actual Exam Newest / Colorado Car Sales Mastery
Practice Exam / Colorado Car Sales Mastery Preparation With 250 Questions And
Correct Answers | Already Graded A+
Question 1
Under Colorado law, the license of a motor vehicle salesperson or powersports salesperson may
be denied, revoked, or suspended for all of the following reasons EXCEPT:
A) Misrepresenting a used vehicle as new.
B) Advertising a salvaged vehicle while clearly identifying it as a salvage vehicle.
C) Failing to report a criminal conviction within 30 days.
D) Engaging in a bait-and-switch advertising scheme.
E) Indulging in fraudulent business practices.
Correct Answer: B) Advertising a salvaged vehicle while clearly identifying it as a salvage
vehicle.
Rationale: While misrepresenting a vehicle's status is a violation, advertising a salvage
vehicle is perfectly legal under Colorado law provided the salesperson is transparent and
identifies the vehicle as a "salvage vehicle" in the advertisement. Proper disclosure
prevents deceptive trade practices.
Question 2
According to Colorado law, which of the following individuals or entities must be licensed as a
motor vehicle dealer or powersports dealer?
A) A person who sells or leases more than three vehicles in a calendar year.
B) A person who attempts to negotiate a sale with the intent to make a profit.
C) A person who displays more than three vehicles for sale at a single address.
D) All of the above.
E) None of the above.
Correct Answer: D) All of the above.
Rationale: Colorado defines a dealer as anyone engaged in the business of selling or leasing
motor vehicles. Prima facie evidence of being a dealer includes selling or offering for sale
three or more vehicles at the same address or telephone number in one calendar year with
the intent to profit.
Question 3
The Colorado Lemon Law provides protection for consumers who purchase new vehicles with
defects. Which of the following is true regarding its coverage?
A) It covers all used vehicles regardless of mileage.
B) It covers only defects that substantially impair the market value of a new vehicle.
C) It includes motor homes and motorcycles.
D) It applies if a vehicle has been in the shop for at least 5 days.
E) It covers aesthetic issues like paint scratches.
, 2
Correct Answer: B) It covers only defects that substantially impair the market value of a
new vehicle.
Rationale: The Colorado Lemon Law applies specifically to new self-propelled vehicles
(pickups, vans, and cars). It protects the buyer if a defect substantially impairs the use and
market value of the vehicle and cannot be repaired after a reasonable number of attempts.
It specifically excludes motor homes and motorcycles.
Question 4
When a dealer advertises a closed-end credit sale of a motor vehicle, which of the following is
NOT required to be disclosed?
A) The down payment amount.
B) The number of payments.
C) The annual percentage rate (APR).
D) The specific local tax rate.
E) The period of repayment.
Correct Answer: D) The specific local tax rate.
Rationale: Federal and state advertising regulations require "triggering terms" (like down
payment or monthly payment) to be accompanied by clear disclosures of the terms of the
loan. While the APR and repayment period are mandatory, the specific local tax rate varies
by the buyer's residence and is not a required disclosure in a general vehicle advertisement.
Question 5
The Colorado Motor Vehicle Dealer Board is empowered by the state to do all of the following
EXCEPT:
A) Issue or deny motor vehicle dealer and salesperson licenses.
B) Set the maximum profit a dealer can make on a vehicle.
C) Impose administrative fines for rule violations.
D) Order hearings and investigate complaints.
E) Revoke or suspend existing licenses.
Correct Answer: B) Set the maximum profit a dealer can make on a vehicle.
Rationale: The Dealer Board is a regulatory body focused on licensing, consumer
protection, and industry ethics. It does not have the authority to interfere with the free
market or dictate the profit margins or pricing of private businesses.
Question 6
When a motor vehicle is repossessed in Colorado, within how many hours must local law
enforcement be notified?
A) 1 hour before or after the repossession.
B) 12 hours after the repossession.
C) 24 hours before the repossession.
, 3
D) Notification is not required.
E) 48 hours after the repossession.
Correct Answer: A) 1 hour before or after the repossession.
Rationale: To prevent law enforcement from mistakenly treating a legal repossession as a
vehicle theft, Colorado law requires the person or entity performing the repossession to
notify local law enforcement within one hour of the event taking place.
Question 7
A motor vehicle dealer must post a clear, legible sign at their principal place of business
indicating their hours if they are open:
A) More than 40 hours a week.
B) Less than 40 hours a week.
C) Only on weekends.
D) Only during the summer.
E) Dealers are never required to post signs.
Correct Answer: B) they will be open less than 40 hours a week.
Rationale: The Dealer Board requires that dealers be available to the public. If a dealer
chooses to operate less than a standard 40-hour work week, they must clearly post their
specific hours so that consumers and investigators know when the business is accessible.
Question 8
How many temporary registration permits may a dealer legally issue for each roadworthy vehicle
sold?
A) As many as the customer needs until the title arrives.
B) Exactly one.
C) Two, if the first one expires.
D) None; only the DMV issues permits.
E) Three.
Correct Answer: B) Exactly one.
Rationale: A dealer is authorized to issue only one temporary permit per vehicle sale. If the
permit expires before the title work is completed, the dealer cannot simply issue another
one; the consumer must generally obtain an extension or new permit from the County
Clerk.
Question 9
What is the maximum administrative fine the Dealer Board may impose on a dealer who sells
primarily vehicles weighing 1,500 lbs or more per offense?
A) $1,000
B) $5,000
, 4
C) $10,000
D) $25,000
E) $50,000
Correct Answer: C) $10,000
Rationale: For major violations of the law or Board rules, the Motor Vehicle Dealer Board
has the authority to fine a dealer up to $10,000 per separate offense. This serves as a
significant deterrent against fraudulent or deceptive business practices.
Question 10
The Colorado Consumer Protection Act identifies "bait and switch" as a deceptive trade practice.
Which of the following is an example of bait and switch?
A) Advertising a vehicle that the dealer does not actually intend to sell.
B) Advertising a vehicle and then discouraging the customer from buying it to push them into a
more expensive one.
C) Claiming a vehicle is sold out when it is actually available in the back lot.
D) All of the above.
E) None of the above.
Correct Answer: D) All of the above.
Rationale: Bait and switch involves alluring a consumer with an attractive but insincere
offer (the bait) and then using tactics to switch them to another product, usually at a higher
price or with less favorable terms.
Question 11
Under the Truth in Mileage Act, which of the following vehicles is NOT exempt from odometer
disclosure requirements?
A) Vehicles that are not self-propelled (trailers).
B) Motor vehicles with out-of-state titles.
C) Vehicles that are 20 years old or older.
D) Vehicles with a Gross Vehicle Weight Rating (GVWR) of more than 16,000 lbs.
E) Vehicles sold directly by the manufacturer to a government agency.
Correct Answer: B) motor vehicles with out-of-state titles.
Rationale: The Truth in Mileage Act is a federal law that applies to all states. Having an out-
of-state title does not exempt a vehicle from disclosure. Exemptions are typically based on
the age of the vehicle (currently 20 years or older for 2011 models and newer), the weight of
the vehicle, or the type of vehicle.
Question 12
Which of the following groups is NOT represented as a member of the Colorado Motor Vehicle
Dealer Board?
Practice Exam / Colorado Car Sales Mastery Preparation With 250 Questions And
Correct Answers | Already Graded A+
Question 1
Under Colorado law, the license of a motor vehicle salesperson or powersports salesperson may
be denied, revoked, or suspended for all of the following reasons EXCEPT:
A) Misrepresenting a used vehicle as new.
B) Advertising a salvaged vehicle while clearly identifying it as a salvage vehicle.
C) Failing to report a criminal conviction within 30 days.
D) Engaging in a bait-and-switch advertising scheme.
E) Indulging in fraudulent business practices.
Correct Answer: B) Advertising a salvaged vehicle while clearly identifying it as a salvage
vehicle.
Rationale: While misrepresenting a vehicle's status is a violation, advertising a salvage
vehicle is perfectly legal under Colorado law provided the salesperson is transparent and
identifies the vehicle as a "salvage vehicle" in the advertisement. Proper disclosure
prevents deceptive trade practices.
Question 2
According to Colorado law, which of the following individuals or entities must be licensed as a
motor vehicle dealer or powersports dealer?
A) A person who sells or leases more than three vehicles in a calendar year.
B) A person who attempts to negotiate a sale with the intent to make a profit.
C) A person who displays more than three vehicles for sale at a single address.
D) All of the above.
E) None of the above.
Correct Answer: D) All of the above.
Rationale: Colorado defines a dealer as anyone engaged in the business of selling or leasing
motor vehicles. Prima facie evidence of being a dealer includes selling or offering for sale
three or more vehicles at the same address or telephone number in one calendar year with
the intent to profit.
Question 3
The Colorado Lemon Law provides protection for consumers who purchase new vehicles with
defects. Which of the following is true regarding its coverage?
A) It covers all used vehicles regardless of mileage.
B) It covers only defects that substantially impair the market value of a new vehicle.
C) It includes motor homes and motorcycles.
D) It applies if a vehicle has been in the shop for at least 5 days.
E) It covers aesthetic issues like paint scratches.
, 2
Correct Answer: B) It covers only defects that substantially impair the market value of a
new vehicle.
Rationale: The Colorado Lemon Law applies specifically to new self-propelled vehicles
(pickups, vans, and cars). It protects the buyer if a defect substantially impairs the use and
market value of the vehicle and cannot be repaired after a reasonable number of attempts.
It specifically excludes motor homes and motorcycles.
Question 4
When a dealer advertises a closed-end credit sale of a motor vehicle, which of the following is
NOT required to be disclosed?
A) The down payment amount.
B) The number of payments.
C) The annual percentage rate (APR).
D) The specific local tax rate.
E) The period of repayment.
Correct Answer: D) The specific local tax rate.
Rationale: Federal and state advertising regulations require "triggering terms" (like down
payment or monthly payment) to be accompanied by clear disclosures of the terms of the
loan. While the APR and repayment period are mandatory, the specific local tax rate varies
by the buyer's residence and is not a required disclosure in a general vehicle advertisement.
Question 5
The Colorado Motor Vehicle Dealer Board is empowered by the state to do all of the following
EXCEPT:
A) Issue or deny motor vehicle dealer and salesperson licenses.
B) Set the maximum profit a dealer can make on a vehicle.
C) Impose administrative fines for rule violations.
D) Order hearings and investigate complaints.
E) Revoke or suspend existing licenses.
Correct Answer: B) Set the maximum profit a dealer can make on a vehicle.
Rationale: The Dealer Board is a regulatory body focused on licensing, consumer
protection, and industry ethics. It does not have the authority to interfere with the free
market or dictate the profit margins or pricing of private businesses.
Question 6
When a motor vehicle is repossessed in Colorado, within how many hours must local law
enforcement be notified?
A) 1 hour before or after the repossession.
B) 12 hours after the repossession.
C) 24 hours before the repossession.
, 3
D) Notification is not required.
E) 48 hours after the repossession.
Correct Answer: A) 1 hour before or after the repossession.
Rationale: To prevent law enforcement from mistakenly treating a legal repossession as a
vehicle theft, Colorado law requires the person or entity performing the repossession to
notify local law enforcement within one hour of the event taking place.
Question 7
A motor vehicle dealer must post a clear, legible sign at their principal place of business
indicating their hours if they are open:
A) More than 40 hours a week.
B) Less than 40 hours a week.
C) Only on weekends.
D) Only during the summer.
E) Dealers are never required to post signs.
Correct Answer: B) they will be open less than 40 hours a week.
Rationale: The Dealer Board requires that dealers be available to the public. If a dealer
chooses to operate less than a standard 40-hour work week, they must clearly post their
specific hours so that consumers and investigators know when the business is accessible.
Question 8
How many temporary registration permits may a dealer legally issue for each roadworthy vehicle
sold?
A) As many as the customer needs until the title arrives.
B) Exactly one.
C) Two, if the first one expires.
D) None; only the DMV issues permits.
E) Three.
Correct Answer: B) Exactly one.
Rationale: A dealer is authorized to issue only one temporary permit per vehicle sale. If the
permit expires before the title work is completed, the dealer cannot simply issue another
one; the consumer must generally obtain an extension or new permit from the County
Clerk.
Question 9
What is the maximum administrative fine the Dealer Board may impose on a dealer who sells
primarily vehicles weighing 1,500 lbs or more per offense?
A) $1,000
B) $5,000
, 4
C) $10,000
D) $25,000
E) $50,000
Correct Answer: C) $10,000
Rationale: For major violations of the law or Board rules, the Motor Vehicle Dealer Board
has the authority to fine a dealer up to $10,000 per separate offense. This serves as a
significant deterrent against fraudulent or deceptive business practices.
Question 10
The Colorado Consumer Protection Act identifies "bait and switch" as a deceptive trade practice.
Which of the following is an example of bait and switch?
A) Advertising a vehicle that the dealer does not actually intend to sell.
B) Advertising a vehicle and then discouraging the customer from buying it to push them into a
more expensive one.
C) Claiming a vehicle is sold out when it is actually available in the back lot.
D) All of the above.
E) None of the above.
Correct Answer: D) All of the above.
Rationale: Bait and switch involves alluring a consumer with an attractive but insincere
offer (the bait) and then using tactics to switch them to another product, usually at a higher
price or with less favorable terms.
Question 11
Under the Truth in Mileage Act, which of the following vehicles is NOT exempt from odometer
disclosure requirements?
A) Vehicles that are not self-propelled (trailers).
B) Motor vehicles with out-of-state titles.
C) Vehicles that are 20 years old or older.
D) Vehicles with a Gross Vehicle Weight Rating (GVWR) of more than 16,000 lbs.
E) Vehicles sold directly by the manufacturer to a government agency.
Correct Answer: B) motor vehicles with out-of-state titles.
Rationale: The Truth in Mileage Act is a federal law that applies to all states. Having an out-
of-state title does not exempt a vehicle from disclosure. Exemptions are typically based on
the age of the vehicle (currently 20 years or older for 2011 models and newer), the weight of
the vehicle, or the type of vehicle.
Question 12
Which of the following groups is NOT represented as a member of the Colorado Motor Vehicle
Dealer Board?
