Colorado § 6-1-708 - Vehicle sales and leases - deceptive trade practice - definition.

§ 6-1-708. Vehicle sales and leases - deceptive trade practice - definition.

(1) A person engages in a deceptive trade practice when, in the course of the person's business, vocation, or occupation, such person:

(a) Commits any of the following acts pertaining to the sale or lease of a motor vehicle, used motor vehicle, powersports vehicle, or used powersports vehicle:

(I) Guarantees to a purchaser or lessee of a motor vehicle, used motor vehicle, powersports vehicle, or used powersports vehicle who conditions the purchase or lease on the approval of a consumer credit transaction as defined in section 5-1-301 (12) that such purchaser or lessee has been approved for a consumer credit transaction if the approval is not final. For purposes of this subsection (1)(a)(I), "guarantee" means a written document or oral representation between the purchaser or lessee and the person selling or leasing the vehicle that leads such purchaser or lessee to a reasonable good faith belief that the financing of the vehicle is certain.

(II) Accepts a used vehicle as a trade-in on the purchase or lease of a motor vehicle, used motor vehicle, powersports vehicle, or used powersports vehicle and sells or leases the vehicle that has been traded in before the purchaser or lessee has been approved for a consumer credit transaction as defined in section 5-1-301 (12) if the approval is a condition of the purchase or lease;

(III) Fails to return to the consumer any collateral or down payment tendered by the consumer conditioned upon a guarantee by a motor vehicle dealer, used motor vehicle dealer, powersports vehicle dealer, or used powersports vehicle dealer that a consumer credit transaction as defined in section 5-1-301 (12) has been approved if the approval was a condition of the sale or lease and if the financing is not approved and the consumer is required to return the vehicle;

(b) Fails to disclose in writing, prior to sale, to the purchaser that a motor vehicle is a salvage vehicle, as defined in section 42-6-102 (17), or that a vehicle was repurchased by or returned to the manufacturer from a previous owner for inability to conform the motor vehicle to the manufacturer's warranty in accordance with article 10 of title 42 or with any other state or federal motor vehicle warranty law, or knowingly fails to disclose in writing, prior to sale, to the purchaser that a motor vehicle or powersports vehicle has sustained material damage at any one time from any one incident.

(2) For purposes of this section, if a motor vehicle or used motor vehicle dealer guarantees financing and if approval for financing is a condition of the sale or lease, such motor vehicle or used motor vehicle dealer shall not retain any portion of such purchaser's down payment or any trade-in vehicle as payment of rent on any vehicle released by such dealer to such purchaser pending approval of financing even if such dealer has obtained a waiver of such purchaser's right to return a vehicle or has contracted for a rental agreement with such purchaser.

Source: L. 99: Entire part added with relocations, p. 650, § 2, effective May 18. L. 2000: (1)(a) and (2) amended, p. 244, § 3, effective March 30; (1)(a) amended, p. 1871, § 104, effective August 2. L. 2001: (1)(a) amended, p. 1265, § 2, effective June 5. L. 2007: (1)(b) amended, p. 2018, § 5, effective June 1. L. 2017: (1) amended, (SB 17-240), ch. 395, p. 2064, § 45, effective July 1.

Editor's note: (1) Subsection (1)(a) is similar to former § 6-1-105 (1)(ff)(I), subsection (1)(b) is similar to former § 6-1-105 (1)(ii), and subsection (2) is similar to former § 6-1-105 (1)(ff)(II), as they existed prior to 1999.

(2) Amendments to subsection (1)(a) by Senate Bill 00-080 and House Bill 00-1463 were harmonized.

ANNOTATION

County court judgment finding a violation of subsection (1)(a)(I) is a final determination of fraud as a matter of law for purposes of the motor vehicle dealer bond statute. A plaintiff who wins such a judgment is therefore entitled to payment from the defendant's surety bond provider for actual damages and any attorney fees awarded by the county court. Mendoza v. Pioneer Gen. Ins. Co., 2014 COA 29, 365 P.3d 371.

Subsection (1)(b) does not require actual damage to a vehicle at the time of sale. The fact that a buyer would have paid less had the buyer known of any previous damage makes the damage material. Colo. Dept. of Rev. v. Astro Imports, 2016 COA 25, 370 P.3d 377.