What is a bonded title?

A bonded title, also known as a defective title, lost title bond, or certificate of title surety bond, is a type of vehicle title issued when the owner lacks the standard documentation required to prove ownership. It serves as a guarantee to the state that the applicant is the true owner of the vehicle, even without the usual evidence like a previous title.

Here's a breakdown of important aspects:

• Purpose: To allow vehicle owners who cannot obtain a regular title due to missing or incomplete documentation to register and legally operate their vehicle. This might happen if the original title was lost, stolen, or never properly transferred.

• The Bond: The "bond" refers to a surety%20bond purchased by the applicant. This bond protects the state and any potential future owners from financial loss if the applicant's claim of ownership turns out to be false or if someone else has a legitimate claim to the vehicle.

• How it Works: The applicant typically applies to the state's Department%20of%20Motor%20Vehicles (DMV) or equivalent agency. The DMV will assess the situation and determine if a bonded title is appropriate. If approved, the applicant will need to obtain a surety bond for a specified amount (usually 1-2 times the vehicle's value).

• Bond Amount: The bond%20amount is determined by the state and is based on the vehicle's value. The applicant does not pay the full bond amount; instead, they pay a premium to a surety company to obtain the bond.

• Claim Period: There is a waiting or claim period (typically 3 years) during which someone can make a claim against the bond if they believe they are the rightful owner of the vehicle. If no valid claims are made within this period, the bonded title becomes a regular, unrestricted title.

• Restrictions: A bonded%20title might have some restrictions initially. For instance, it could be difficult to sell the vehicle during the claim period. Lenders may also be hesitant to finance a vehicle with a bonded title.

• Requirements: The specific requirements for obtaining a bonded title vary by state. They usually include a vehicle inspection, proof of residency, and an application form.

• Cost: The cost of a bonded title includes the surety bond premium, application fees, and any other associated expenses (e.g., vehicle inspection).