Colorado Car Sales Practice Test

What constitutes prima facie evidence of engaging in the business of selling or leasing motor vehicles?

1. Offering or negotiating an exchange of three or more vehicles in a year

2. Selling or leasing two or more powersport vehicles in a month

3. Renting a vehicle for a single day

4. Exchanging a vehicle with a family member

The correct answer is: Offering or negotiating an exchange of three or more vehicles in a year

The correct choice regarding what constitutes prima facie evidence of engaging in the business of selling or leasing motor vehicles is the act of offering or negotiating an exchange of three or more vehicles in a year. This is significant because it establishes a clear pattern of behavior typically associated with the commercial sale or lease of vehicles. Engaging in this level of activity serves as an indicative hallmark of a business operation rather than sporadic personal transactions. In a regulatory context, this threshold reflects an intention to act as a dealer, which is subject to specific licensing and regulatory requirements in Colorado and other jurisdictions. Selling or trading vehicles frequently can suggest that an individual or entity is operating with a business model rather than simply transferring personal property or conducting infrequent sales. The other options either do not present a substantial enough frequency or nature of transactions to be considered evidence of a business. Renting a vehicle for a single day is a straightforward consumer transaction and does not imply any business intent. Similarly, selling or leasing two powersport vehicles in a month does not meet the established threshold of three vehicles in a year, thereby failing to demonstrate ongoing business conduct. Exchanging a vehicle with a family member is typically a personal transaction and lacks the necessary elements to be considered a part of a business operation.