Practice question

What is the required action when a demo plate is issued to a consumer?

  1. It must be renewed every 30 days.
  2. It must be reported lost or stolen immediately.
  3. It must be issued only upon consummation of a sale.
  4. It can be shared with other dealers.

Answer: C — It must be issued only upon consummation of a sale.

When a demo plate is issued to a consumer, it is typically necessary for the transaction to be tied to the consummation of a sale. This means the issuance of a demo plate is not just a casual or arbitrary action; it’s related to a specific transaction where the consumer has expressed interest in purchasing the vehicle, usually while allowing them to test drive or evaluate the vehicle's performance. The issuance of a demo plate under these circumstances helps ensure that the usage is legitimate and closely monitored. The demo plate is essentially a temporary registration allowing the consumer to drive the car while considering their purchase and is meant to give them a taste of ownership until an official sale is finalized. By requiring that demo plates be issued only upon consummation of a sale, it helps maintain proper documentation and accountability regarding vehicle use, thus preventing potential misuse.

Practice more: Colorado Motor Vehicle Dealer Practice Test →