The bonded title process is an extremely valuable alternative to traditional vehicle titling that can be used in most states. If you are looking to title your vehicle, but find that you are missing the prior title or other evidence of ownership, you may be able to obtain a vehicle title using the bonded title process. In a bonded title process, the applicant is required to obtain a title bond for the vehicle. How does the bonded title process work and where do you get a title bond?
What is a bonded title?
A bonded title is an alternative method of title recovery that required the issuance of a title bond to secure the vehicle title. A bonded title is typically required when the owner of a vehicle does not have sufficient evidence of ownership needed to apply for a new title. Once a bonded title is issued, the title will be stamped BONDED in big letters. However, this is not a permanent title brand. This bonded title brand typically only lasts 3-5 years depending on your state. Once the 3-5 year time period has passed, you can apply for a clean title as long as there are no other clouds on the current title.
What is a title bond?
A title bond, also known as a motor vehicle title bond, is a type of surety bond that is issued as an insurance policy to secure the claim of vehicle ownership. The DMV in your state will require a title bond to be issued because essentially they are taking your word as the owner and to prevent their liability in the event of ownership discrepancy being discovered after the title is issued.
How much does a title bond cost?
Each state will have different requirements for the value of your title bond. Many states require the bond value to be 1.5x the value of the vehicle. However, that’s not to say that if your vehicle is worth $10,000 that you have to pay $15,000 to get your title. When purchasing a title bond, you will only be required to pay a portion of the value to secure the bond. Typically, a bond will cost about $100-$150 for most moderately valued vehicles. You won’t be required to pay the full cost of the bond unless there is an ownership discrepancy found after the bonded title is issued. Title bonds can be purchased from any licensed bonding company or insurance company.
What states accept the bonded title process in 2022?
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Rhode Island, Tennessee, Texas, Utah, Vermont, Washington, Wisconsin, and Wyoming.
What states do not have a bonded title process in 2022?
Delaware, Hawaii, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Virginia, and West Virginia.
If you live in one of these states, but would still like to pursue a bonded title process, you may be eligible to obtain an out-of-state bonded title from Vermont. You do not have to be a resident of Vermont to qualify, but the vehicle has to be at least 15 years old or older. Before pursuing this option, make sure that your state will accept this title as evidence of ownership for transfer.
Tips for your bonded title process
Tip #1: Verify your eligibility BEFORE purchasing your title bond
In states that accept the bonded title process, make sure that your vehicle qualifies. Many states, although they accept the process, will have certain requirements such as the vehicle must be over a certain model year. In addition, make sure you are purchasing the correct value of the bond. Title bonds are NOT refundable and should only be purchased if eligibility is met for a bonded title.
Tip #2: Include all of the proper paperwork for your state
Remember, the bonded title process isn’t as streamlined as the traditional title transfer process. Check your state’s process to make sure you have all of the correct paperwork, inspections, and documentation completed prior to your application.
Tip #3: Get a vehicle history report
A vehicle history report isn’t required for a bonded title or a title bond, but is a good idea to do before starting the process, especially if you’ve recently purchased the vehicle. A vehicle history report through one of the NMVTIS-approved providers can tell you if your vehicle has been branded as salvage, has an accident history, has ever been reported stolen, sold at auction, etc. This is important because if a vehicle has ever been branded salvage, junk, parts-only, nonrepairable, or any other permanent title brand, they are NOT eligible for a bonded title or any vehicle title other than the current brand.
Tip #4: Include state taxes and fees with your application
When submitting your application, you may be required to pay sales tax and a fee for your state title application. Review your state’s fees prior to submission to ensure all applicable fees and taxes are paid on time.
Having a title brand may seem less than ideal, but a bonded title brand is nothing to be concerned about. Important documents are lost and damaged all of the time, it’s not uncommon for this to also happen to a vehicle title.