Colorado Car Sales Practice Test

What is one reason a dealer may face license revocation?

1. Failure to meet building code standards

2. Using overly aggressive marketing techniques

3. Employing unlicensed staff

4. Not providing warranties on all vehicles

The correct answer is: Employing unlicensed staff

A dealer may face license revocation for employing unlicensed staff because it directly violates regulations that govern dealership operations. States, including Colorado, require that a certain level of licensing is maintained not only for the dealership itself but also for anyone involved in the sale of vehicles. Having unlicensed personnel can undermine consumer protection laws and lead to legal liabilities, as it reflects a failure to operate within the legal framework set for the automotive sales industry. In contrast, while failure to meet building code standards, using overly aggressive marketing techniques, and not providing warranties on all vehicles can lead to other legal repercussions or fines, they do not typically result in immediate license revocation in the same way that employing unlicensed staff does. The presence of licensed staff is crucial in ensuring that all employees are knowledgeable about the laws and regulations that govern the dealership, which is a fundamental expectation from regulatory bodies.