Colorado Car Sales Practice Test

Which document is NOT considered proof of ownership for a vehicle sold by a Colorado dealer?

1. A Colorado title

2. A lien release document

3. A vehicle subject to lien on the title

4. An MCO (Manufacturer's Certificate of Origin)

The correct answer is: A vehicle subject to lien on the title

A vehicle subject to lien on the title is not considered proof of ownership because it indicates that there is an outstanding financial obligation on the vehicle. When a vehicle has a lien, the lienholder holds a legal claim or interest in the vehicle until the debt is paid off. Thus, while the title is in the name of the owner, the presence of a lien complicates the ownership status, suggesting that the owner does not have full autonomy over the vehicle. In contrast, a Colorado title proves ownership as it is the legal document that provides evidence of who owns the vehicle. Similarly, an MCO serves as a proof of ownership for new vehicles from manufacturers, while a lien release document confirms the removal of a lien, establishing that the vehicle is free of any encumbrances.