What is bonded title?

A bonded title, also known as a certificate of title surety bond or a lost title bond, is a type of surety bond that serves as a proof of ownership for a vehicle when the original title has been lost, stolen, or is otherwise unavailable. It is a way to establish ownership when the proper documentation cannot be provided. Here are some key points about bonded titles:

1. Purpose: A bonded title is designed to protect the state and any previous or future owners of the vehicle from claims that might arise due to the issuance of a new title. It serves as a legal agreement that indemnifies the state against any potential false claims.

2. When Needed: A bonded title is typically needed when a person purchases a vehicle without receiving a title, the title has been lost or stolen, or when the vehicle's ownership is in dispute and no other proof or documentation can be provided.

3. Process:

   • Application: The vehicle owner must first attempt to obtain a replacement title through standard procedures. If unsuccessful, they may apply for a bonded title.
   • Bond Purchase: The applicant needs to purchase a surety bond from an authorized surety company. The bond amount varies by state, often calculated as a percentage of the vehicle's value (typically 1.5 to 2 times the current value of the vehicle).
   • Submit Documentation: Necessary forms and documentation must be submitted to the state's Department of Motor Vehicles (DMV) or equivalent agency.
   • Issuance: Once the application is approved and the bond is issued, the DMV will typically provide a bonded title to the applicant, which states that it is a "bonded" or "secure" title.

4. Duration: A bonded title is generally valid for a specific period, commonly ranging from 3 to 5 years. During this time, other parties can challenge the title and make claims via the surety bond if they believe they have a rightful claim to the vehicle.

5. Resolution: If no claims are made against the bond within the specified time frame, many states will issue a standard title to the vehicle owner.

6. Potential Challenges: While having a bonded title provides legal proof of ownership, it may complicate selling the vehicle, as potential buyers might be wary of the bond's implications.

Obtaining a bonded title varies by state, so vehicle owners should check with their local DMV or equivalent authority for specific requirements and processes.