Titles are the most common way to prove ownership of a vehicle, and when you purchase a car from another person or dealer, the title should be assigned to you so that you can establish the vehicle is now yours. There are some instances when a car title is lost or missing, but you can get bonded title to protect your right to the car and prove ownership.
Bonded Titles
A bonded title is a title that is guaranteed by a surety bond through a company that provides bonds for titles. The company bonds the title in exchange for a fee and then issues the paperwork to show the vehicle is bonded so that the DMV will issue a new title.
The purpose of the bond is to protect you if a third party claims rights to the vehicle later. The surety company will pay the party fair market value for the vehicle, and you will then have to pay the company back. Think of it as a form of insurance covering the right to the vehicle so you don't lose it later.
The bond cost can differ with the car's value, so you will need to talk with the surety company about the fees involved for you to obtain a vehicle bond for your vehicle.
The Need For Bonded Titles
The bonded title is typically issued for a car that has no title or was inappropriately reassigned. Often cars that fall into this category are cars that are sold without a title, either because it is lost or was destroyed at some point. If you have a legal bill of sale from the previous owner, you can use that to get the bond you need and then get a bonded title issued for the car.
The department of motor vehicles will need the bill of sale, the bond paperwork, and any other proof of ownership you might have for the car. Often a notarized statement from the previous owner saying they sold the vehicle to you can help.
Once the bonded title is approved, you will receive a title with a brand that says bonded. This stays on the title as long as you own the car, and if you sell the vehicle to another person down the road, you must do the title transfer properly to remove the brand from the title.
In some states, the bonded title brand will stay on the title forever once it is placed on it, and the next owner will have to go through the same process to transfer ownership of the vehicle.
Contact a local bond company to learn more about bonded titles.
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