What is a motor vehicle title bond?
A title bond is a certificate of title surety bond that a state DMV requires before it will issue a title to someone who cannot produce acceptable proof of ownership. The bond promises that if a prior owner, lienholder or later purchaser proves a better claim to the vehicle, the surety will pay their loss up to the bond amount. The title that issues on the strength of the bond is the bonded title. The same instrument is called a lost title bond, defective title bond, vehicle indemnity bond or vehicle ownership bond, depending on the state.
Which states issue bonded titles?
35 of the 51 U.S. jurisdictions bond vehicle titles: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, Wisconsin, Wyoming. Delaware, District of Columbia, Hawaii, Indiana, Kansas, Kentucky, Louisiana, New Jersey, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Virginia, West Virginia do not; they use a court order, an ownership affidavit or a notice-and-publication process instead. Each state's page on this site sets out the rule with the statute and the official form.
How is the bond amount calculated?
Each state sets its own multiplier by statute or rule. Most require 1.5 times the vehicle's value; Colorado, Connecticut, Florida, Georgia, Michigan, Missouri, New Mexico, Utah and Wyoming require 2 times; California and Montana require the value itself; Alabama uses a fixed schedule by vehicle class and age. We round the result up to the next $1,000, apply any state minimum, and that figure is the bond's penal sum.
How much does a title bond cost?
The premium is $20 per $1,000 of bond amount with a $100 minimum, paid once for the full statutory term, plus a disclosed $85 administrative fee. A $9,000 bond therefore costs $265.00 all in. Bonds of $25,000 and greater are not quoted automatically; they are reviewed by an underwriter.
How long does the bond stay in force?
Three years in most states, four in Georgia, five in Connecticut and Wisconsin, and seven on Utah's bond form. The bond is generally released earlier if the vehicle is no longer registered in the state and the bonded title is surrendered, and never while a claim is pending. When the term runs with no claim, the DMV issues a clean title.
Can I register, insure and sell a vehicle on a bonded title?
Yes. A bonded title carries the same rights as a standard title. The brand ("BONDED", "BOND POSTED", "UNDISCLOSED INTEREST" and the like) simply tells a buyer or lender that a surety bond backs the ownership claim for the term, and it drops off when the term expires without a claim.
Who determines the vehicle's value?
It varies. Texas uses its Standard Presumptive Value; Florida requires a Kelley Blue Book private party value for your ZIP code; North Carolina uses the NCDMV Value Schedule; Nevada uses a percentage of MSRP; Illinois uses wholesale value; several states (Arkansas, Iowa, Nebraska, Wisconsin, Minnesota) set the value themselves and write to you with the bond amount. Every state page names the valuation source.
What if my credit is poor?
Title bonds under $25,000 are generally written on the application alone. Larger bonds are credit-underwritten, and Surety One's non-standard program offers terms to applicants with damaged credit or no credit history. We decline no application; we offer terms that fit each applicant.
Do I need a bond if I simply lost a title that is already in my name?
Usually not. If the title was issued to you, your DMV will issue a duplicate on a simple application. A bond is for the case where the title was never put in your name: the seller never delivered it, it was lost before transfer, it was assigned improperly, or the vehicle was never titled at all.
