Important Updates!


Happy Spring

Major changes are announced - both form changes and regulation updates. 

The Dealer Board has been working on material damage disclosures - and the revised Regulation 12-6-118(3)(I) is in effect as of April 14, 2016.  Material Particulars are defined as those details concerning a vehicle for sale that are essential or necessary for a reasonable prospective Buyer to know prior to making the decision to buy or not to buy a vehicle.  The full regulation is below.

Colorado has passed new legislation regarding temporary permits in an effort to increase the security and visibility of the temporary tags, and to provide timely registration information.  The Department of Revenue will begin training on the new procedure in June.

The DR 2174, Colorado Secure Power of Attorney, has been updated to be more consistent with Colorado and Federal law and regulations.  The new form will be mandatory as of July 8, 2016.

Bradford Publishing has announced upcoming changes to the 645-ARB and 649 Retail Installment Contracts.  The new forms should be available around June, 2016.  The changes will require DMS programming changes.

New York dealers face fines and prison for falsifying loan applications and payment packing.

More information on these topics are included in this newsletter.

The Auto Industry Division changed their hours of operation of the reception/licensing desk.  New hours, starting on May 2, 2016, are 9:00 a.m. to Noon, and 1:00 p.m. to 3:30 p.m.  The Division will remain open from 8:00 a.m. to 5:00 p.m. for all other business.

CAPSS continues to offer the following on-line classes.  Ensure you are up to date on compliance issues, prepare for a state audit, and train your staff - all from your computer or tablet.
  • Mastery Exam Seminar - prepares a sales applicant to take the Colorado State Mastery Exam.
  • Getting the Car Deal Rolling Seminar - walks the novice dealer, salesperson, or title clerk through the basic paperwork needed to complete a deal.  A downloadable manual is available as well as a personalized certificate upon completion of the course.
  • Compliance - The Well-Informed Dealer/Salesperson - reviews many compliance issues and prepares the dealership for an audit by the Auto Industry Division.  A personalized certificate is available upon completion of the course.  Stay up to date and provide continuing education for your staff.

If you prefer in-person classes, check out the CIADA classes in Lakewood and Montrose!


We continue to encourage your membership in CIADA (Colorado Independent Automobile Dealer's Association).  CIADA represents you, the Colorado dealer!  Check out their member benefits at


Thanks for letting us serve you.


Connie J. Hatch




Blonde girl pulls a broken car with a rope
Material Particulars - Mandatory Disclosure

As of April 14, 2016, the regulation change regarding material damage disclosures is in effect.  Colorado has always required dealers and wholesalers to disclose material damage.  This regulation now better defines Material Particulars and also those items it is not necessary to disclose.  Disclosure must be given, in writing prior to the signing of the Contract, and the disclosure form  is deemed to be part of the Contract.  The Regulation is included below.  CIADA has a Vehicle Disclosure Damage form - Contact them for more information! 

Regulation 12-6-118(3)(I)

A.  Definition for Purposes of this Regulation

  1. "Contract" means any written agreement, such as a purchase agreement, buyer order, or invoice, between a Dealer and a Buyer for the sale of a motor vehicle, excluding the Retail Installment Sales Contract (RISC).
  2. "Dealer" means a motor vehicle dealer, used motor vehicle dealer, wholesaler, wholesale motor vehicle auction dealer, motor vehicle auctioneer, or a representative of the dealership.
  3. "Seller" means Dealer.
  4. "Buyer" means a retail consumer or a Dealer.
  5. "Material Particulars" means those details concerning a vehicle for sale that are essential or necessary for a reasonable prospective Buyer to know prior to making the decision to buy or not to buy a vehicle.

B.  Disclosure Process

Prior to the signing of the Contract, the Seller shall produce a written document disclosing all known Material Particulars.  Both the Seller and Buyer must sign the document.  The document is deemed to be part of the Contract.  A signed copy of the Contract and the disclosure document shall be provided to the Buyer at the time of sale.  The Seller shall retain a copy of the contract and the disclosure document.


C.  "As Is" Statement

A statement by the Seller to the Buyer that a vehicle is sold "as-is" does not relieve the Seller of the disclosure obligations otherwise required by state or federal law.  An "as-is" statement solely disclaims implied warranties under provisions of the "Colorado Uniform Commercial Code," Title 4, C.R.S.


D.  Non-Exclusive List of "Material Particulars"


Material Particulars include but are not limited to any of the following:

  1. The motor vehicle is a "Salvage vehicle" as that term is defined in the Colorado "Certificate of Title Act," Part 1, Article 6, Title 42, C.R.S.
  2. The motor vehicle has sustained damage, whether repaired or not repaired, of the following types:
  • Frame or unibody damage of any grade or type; or
  • Flood, fire or hail damage; or
  • Accident or collision damage.

3.  The motor vehicle has been modified in a way that impacts warranty coverage.

4.  The motor vehicle had been declared a "total loss" by an insurance company.

5.  The motor vehicle had been stolen.

6.  The motor vehicle had been used as a police vehicle, vehicle for hire, rental vehicle, or a loaner or courtesy vehicle, if such use is clearly ascertainable from a title brand, from information obtained from a prior owner, from a Vehicle Identification Number (VIN), from a State-issued Identification Number, or from any other source.

7.  The motor vehicle had been put to use or had been altered in such a way that a reasonable person would consider unusual or extraordinary, such as use as a racing vehicle.


E.  Matters Generally Not Considered "Material Particulars"


This list is not intended to be all-inclusive.  Material Particulars do not generally include the items on the following list:

  1. Normal wear and tear.
  2. Completed or prior mechanical repair.
  3. General maintenance.
  4. Repair or replacement of tires, wheels, glass, handlebars, moldings, radios, in-dash audio equipment, or the like, provided that the repair or replacement was completed in a manner reasonably comparable to manufacturer's specifications and provided that any repaired or replaced item is functioning at the time of sale in the manner that a reasonable person would expect.
  5. Touch-up paint for minor scratches, dents, or dings.
  6. Completed recall repair, provided the repair was done by a dealer authorized by the manufacturer to perform such repairs.

We recommend that you have trade customers complete a Trade Affidavit, disclosing material particulars to the dealership.  Ensure this information is then relayed to the Buyer.  For recall information, check and provide printouts of relevant information to the Buyer.


If you are selling and buying through wholesale auctions - a Memo of Understanding for Wholesale Auction Disclosure, has been distributed to all Colorado Licensed Wholesale Motor Vehicle Auction Dealers.  They shall be in compliance with Paragraph "B" as stated above by:

  • Making all required known disclosure announcements at the auction block prior to running the vehicle
  • Having all required known disclosure announcements printed on the vehicle sales invoice
  • Having buyer of vehicle acknowledge required disclosure announcements by signing  invoice at time of auction
  • Auction retaining copy of signed disclosure by buyer.


Temporary Permit Changes
Colorado's new regulation regarding temporary permits will be implemented by July 1, 2016.  Department of Revenue will be offering training across the state beginning in June.

Upon the sale of a vehicle, Dealers will access a website to print (on regular paper) the permit and the registration. The permit will be inserted into a "permit board" and the registration will be given to the buyer. This system will integrate with Dealer Management Systems.  If your dealer management system is not listed below, contact Todd O'Connell, CIADA, at 303-239-8000 with the contact name and phone number of your DMS company, so he can submit it to the state for integration.

  • ADP
  • Auto/Mate
  • Automotive Arts
  • Dealer Track
  • Desk Manager
  • Frazer
  • ProMax
  • Skywerks
  • Smart Lot


The permit boards may be purchased through CIADA for a member price of $175 per box of 100, or $200 per box for non-members.  The permit boards are weatherproof and must be fastened to the rear license plate holder.  Permits can no longer be placed inside the vehicle, and dealers will no longer need to hand write the permit or send in the stubs.


If you are a dealer who does not have access to the web through a computer or smart phone, please contact Todd O'Connell, CIADA.  Todd will continue to work with the state on problems with the new system.


Colorado Secure Power of Attorney - DR 2174

The Colorado Titles and Registration Section has notified us of the change in the use and format of the Secure Power of Attorney, DR 2174.

Per Operations Director, Anthony Anderson, "In order to be more consistent with both Colorado law and Federal law, the Title and Registration Section has made the following changes:
  • 49 CFR 580.5 (c) In the case of a transferor in whose name the vehicle is titled, the transferor shall disclose the mileage on the title, and not on a reassignment document..
Based on this conclusion, the Title and Registration Section will continue to process title applications that include a DR 2174 Power of Attorney For a Motor Vehicle in a manner consistent with its current practice through July 7, 2016.  The DR 2174 Power of Attorney for a Motor Vehicle has been updated (revision date 03/14/16).

On or after July 8, 2016, the Title and Registration Section will discontinue processing any applications for Colorado title that do not fully comply with all applicable Colorado and Federal laws and regulations.  Any applications received that do not fully comply will be rejected for correction.

Conforming title owner assignment that will be accepted by the Title and Registration Section is as follows:

If the issue date of a surrendered title indicates the title was issued prior to the date of sale:
  • The seller(s) must sign the surrendered title releasing their interest.
  • A secure power of attorney may be used; however, the seller and buying entity must also sign the odometer disclosure on the surrendered title.
  • The buying entity shall not sign the surrendered title on behalf of the seller using a DR 2174 Power of Attorney for a Motor Vehicle to acknowledge the odometer disclosure.
If the issue date of a surrendered title is after the date of sale or the title shows a lien and the lien was released after the date of sale:
  • The seller's signature on a DR 2174 Power of Attorney for a Motor Vehicle is sufficient to release the owner's interest.
  • The buying entity must sign the title on behalf of the seller, releasing the seller's interest and acknowledging the odometer disclosure, and must also sign as the buying entity.
A signed reassignment document will not be accepted unless accompanied by a correctly executed title".

For questions, contact Kyle Boyd, Titles and Registrations, 303-205-8353 or 

We always recommend that dealers have trade in customers sign two Secure Power of Attorney's and two Non-Secure Power of Attorney's for every trade.  This allows you to get a duplicate title and to sign off on that duplicate title for the trade customer if that title gets lost or destroyed, or if an error is made on a reassignment of the title to the new buyer.  

Rocky Mountain Banknote 645-ARB and 649 Retail Installment Sale Contract (RISC) forms

Bradford Publishing has notified us of the following:  "We have recently completed a comprehensive review of the RISC forms, with the assistance of Hudson Cook, the preeminent law firm for consumer finance regulation and dealer law. ... Based on that review we made several changes to the contracts.  ... The new versions are now finalized and will have a revision date of June, 2016 (Rev. 6-16).

This new change will require DMS programming changes.  Bradford advised "Both the 645-ARB (with arbitration) and 649 (no arbitration) versions of the Bradford Publishing RISC have been revised.  New provisions and other changes have lengthened the pre-printed versions of both forms.  The primary change in the 645-ARB contract is a revised Arbitration provision - arbitration is frequently subject to attack in court cases and by regulators.  Other updates focus on strengthening various notices and disclaimers along with an express consent for text messages and calls to cell phones.  On the 649 contract, we added a GAP agreement option in addition to the strengthened notices, disclaimers and cell phone provisions."

Bradford will have a programming guide and copies of the revised forms  available in May.  Most lenders allow a two-month time frame after the month of revisions for switch-over to the revised version.  

CIADA will have these forms available when they are ready!

Payment Packing - Falsifying Loan Applications

A settlement was reached with four New York dealerships, Koeppel Auto Group, Plaza Dealersihps, Huntington Honda and Manfredi Auto Group, for unlawfully selling after-sale products, including credit repair and identity-theft protection services.  According to the attorney general's complaint, the dealers, between 2010 and 2015, used "fraudulent, deceptive and illegal methods" to sell CFI contracts.  

The complaint states the F&I managers allegedly bundled the cost of F&I products, including the CFI services as well as service contracts and other products, into the vehicle sales price without itemizing the products.  In some cases, the customers were unaware they had purchased the products.  In other cases, the customers thought the add-ons were free.

The dealer groups were also charged with failing to provide required disclosures, such as the customer's right to cancel the credit repair services contract.  

The settlement, of almost $2 million, also prohibits the dealerships from:
  • Selling, offering to sell or marketing credit repair and identity theft services in connection with the sale or lease of a vehicle;
  • Selling, offering for sale, or providing to consumers any after-sale product or service unless, prior to such sale, certain material terms, including price, are disclosed verbally and in writing;
  • Misrepresenting the price of the vehicle in final lease or sale contracts;
  • Failing to provide consumers with sales or lease agreements that clearly and conspicuously itemize each after-sale product or service and its price.  

In another case, the U.S. Attorney's Office charged Gerald McDonald, part owner and CEO of Parkway County Polaris, Parkway Dodge Chrysler and Jeep, and Parkway Chevrolet and Oldsmobile, with submitting false statements on auto finance documents to influence a financial institution.  McDonald pleaded guilty last month to these charges, and he faces a maximum of five years in prison and a fine up to $250,000 when he is sentenced on July 19.  He will also be ordered to forfeit $102,498 in restitution.

McDonald admitted to the federal court that he and his sales associates and managers had conspired to submit false information to banks on consumer bank loan applications.  According to the press release from the U.S. Attorney's Office, when a customer did not meet the qualifications for a loan, a co-conspirator sales associate or co-conspirator manager would falsely state or overinflate a down payment in order to secure loan approval.

State and federal regulators are on the watch for any illegal practices by dealerships. Ensure that all after-sale products are presented to all customers in a menu with prices quoted.  Never overinflate a down payment, or overinflate the value of the vehicle to obtain loan approval!

Partners with CIADA to better serve Colorado Dealers!

Contact us if we can serve you.  Thanks again for your continued support. 

                                                                                                      Connie J. Hatch