A car title provides legal information about a vehicle i.e., vehicle identification number (VIN), owner, etc. You need a title to buy car insurance, register your car, and sell it to other people. Most owners receive their title after they purchase their vehicles. For example, if you buy a new car from a dealership, the dealership will mail your car title a few weeks after your purchase. However, when you buy a used car, sometimes, there could be issues with the title that requires you to get a bonded title.
Bonded title is essentially a title guaranteed by a surety bond ( a type of financial guarantee). A bonded title is the only way for you to get a title when there is no sufficient proof of your ownership of the vehicle. If you need a bond that can help you become an auto dealer, you're looking for an auto dealer bond. These two bonds are commonly mixed up.
You need a bonded title for the exact same reasons that you need a regular title, listed below:
You need a bonded title if there is insufficient proof of ownership, which can happen due to the following reasons:
Sometimes, you don't need a bonded title because a replacement title, duplicate title, or the previous owner can help you establish sufficient proof of ownership:
The best way to find out if you need a bonded title or not is to call your or visit your local DMV. Don’t get a bonded title until your state DMV confirms with you that you need one. Getting a bonded title should be the last resort.
Although the process for getting a bonded title differs a little bit across states, the process described below largely summarize the main steps involved in acquiring a bonded title for most states.
Step 1: If you don’t have your title, make every effort to find your title through contacting the seller and DMV official. If you finally find the title but your name is not on it, try as many ways as you can to get in touch with the person whose name is on the title. The goal is to have the person transfer the title into your name.
Step 2: Determine if you need a bonded title
Step 3: Determine your eligibility for a bonded title for the state DMV
Step 4: Fill out a Bonded Title Application Form and bring the form with the following evidence of ownership in person to the DMV
Step 5: If your documents are approved by the DMV, you will be told the amount of a Certificate of Title Surety Bond you need to purchase, most of the time between 1.5x - 2x the market value of the vehicle (Texas requires 1.5x and Georgia requires 2x) providing the valuation of the motor vehicle from a recognized motor vehicle valuation and pricing sources such as Kelley Blue Book and NADA Guides. Generally, you should have a minimum bond amount of $6000, which costs around $100. $100 is the lowest you can spend on a title bond. If you choose to have a bond value of 1,000, it will still cost you $100. The higher the bond amount, the more coverage you have in case of a claim. Therefore, it is better to have a higher bond value as long as the cost of the bond is the same.
Step 6: Purchase your Certificate of Title Surety Bond through a surety broker
Step 7: Within 30 days of the initial issuance of your Certificate of Title Surety Bond, you would need to apply for a Bonded Title. Complete the Application for Title Form and bring all the documents to your local county tax office
The cost of a bonded title is largely determined by the cost of certificate of title bond, paperwork admin fees, mail cost, etc. While the cost of title bond is consistent across states, the cost of administrative fees is determined by each state’s DMV or Department of Transportation.
Cost of Title Bond:
Cost of Paperwork
A Certificate of Title Surety Bond (aka Title Bond, Lost Car Title Bond) is a surety bond which establish a financial contract between three parties, the Principal (The applicant), the Obligee (Department of Motor Vehicles of the state), and the Surety Company (The Insurance/Surety Carrier issuing the bond). The contract states that if another owner of the vehicle declared on the title bond steps forward with evidence that the vehicle is theirs rather than the property of the principal, the surety company would pay the financial damage to the extent of the bond amount.
A title bond is a prerequisite for getting a bonded title. It is a form of financial contract required by the state and local DMV authority.
You need to provide the required information below on the website of a licensed surety provider and submit your payment.
Information needed for a title bond:
In most cases, once you submitted the information needed for a title bond, you can get a title bond within minutes online or over the phone.
It varies based on the state.
A Bonded Title is guaranteed by a surety bond. Interestingly, it does not ensure car ownership and can be challenged. It is almost like a provisional car title and can be contested for a period of time after issuance, typically 3-5 years, depending on the state. After the period of contest, the bonded title owner can apply for a regular car title.
People often confuse bonded title with lost car title bond (aka title bond, certificate of title bond). Bonded Title is basically a car title issued by the DMV that is guaranteed by a title surety bond issued by an insurance company. You can get your bonded title only after getting a title bond. A title bond is one of many requirements for obtaining a bonded title. There are paperworks and vehicle inspection that needs to be done before you can get a bonded title.
Typically, if you bought a car from out of state and there is sufficient proof of ownership on your current title, you don't need a bonded title. You just need to follow your state's process to register the car in your home state. You would need a bonded title if you don't have sufficient proof of ownership of the car and the following circumstance applies to you.
The topic above named "How to Get a Bonded Title, for Most States?" answers this question. Generally, if your car is from out of state, you would need an additional inspection conducted by a certified Safety Inspection Station or/and state law enforcement authorities (i.e., police). This is an additional step from other bonded title applications.
Yes, bonded title works for all of the above.
The process to get a bonded title for a boat works exactly the same as that for a car.
For some states where the state DMV decides on the value of the bond, like Wisconsin, you can acquire an independent appraisal conducted by an impartial person which the DMV will accept. The impartial person could be a independent licensed vehicle adjuster or dealer.
It depends on the policy of the surety company. Most surety companies don’t accept partial payment but some may, especially if they use instalment loan companies like Affirm.
If you need to update your bonded title form for any reason (i.e., wrong vehicle information, owner name and address, etc.), please start by contacting your state DMV to understand the process.
No, you don't. For most states, your bonded title expires after 3 years. For some states, your bonded title expires after 5 years. Bonded title is a one-time title. After expiration, you can apply for your normal title at your state DMV.
The bonded title will be in force for 3 - 5 years, depending on the specific state. For example, Texas requires a 3 year bonded title holding period whereas Wisconsin has a 5 year holding period. After 3-5 years, you can apply for a regular title. However, for some states, if you can recover the previously issued regular title and submit the complete ownership documents to the DMV prior to the end of the bonded title holding period, you may be able to obtain the regular title earlier and no longer need the bonded title.
It depends on the states. Some states allow you to request name of the prior owner if you fill out a form. For example, Wisconsin can provide you the information of the previous owner if you submit a drive record request form to their DMV.
Most of the time, it is okay to purchase a car with a bonded title. However, you would need to transfer the owner of the bonded title to your name or buy a branded new bonded title with your name on it. The key is always asking for the title before you purchase the car. While there is extra work involved, you have more leverage to negotiate a lower price with the seller.
Most of the time, it is okay to purchase a car for which you need a bonded title. You just need to do your research on the car and make sure it is not a stolen car. You may need to go with the previous owner to the police department to inspect the car to make sure that it is not a stolen car. You also want to make sure that the car has no lien on it.
You may still sell your vehicle with a bonded title, but you’ll have to tell any potential buyer about it. However, the surety bond would need to be kept in good standing to avoid cancellation by the surety company. Until the title is clear, the individual who acquired the bonded title is liable for the surety bond.
