As noted earlier, the specific steps in the process vary by state, but there are certain aspects of the bonded titling process that apply in every state that permits bonded titles.
- First, you will need to make a compelling case that the vehicle does, in fact, belong to you. You’ll need to furnish whatever documents you have to help support your claim of ownership, such as a bill of sale, receipt, or canceled check. The application form for a bonded title typically includes a section that requires you to attest to your ownership and provide detailed information about how the vehicle came into your possession. In some cases you may need to provide a signed, notarized affidavit.
- Additionally, every state has its own procedure for ensuring the vehicle is not reported as stolen and that there are no lien holders who can claim an ownership interest in it. Most states require the vehicle to be inspected by a police officer or DMV employee to verify the vehicle identification number (VIN) before processing an application for a bonded title.
Or 3) But the most essential requirement for obtaining a bonded title is purchasing a title bond—a type of surety bond that may also be referred to as a “lost title” bond. The required bond amount is also referred to as the bond’s “penal sum,” because it is the maximum financial penalty for violating the terms of the surety bond agreement.
The penal sum for a given title bond depends on the current market value of the vehicle in question. How that value and the required bond amount are determined varies by state. In some states, the DMV relies on a Kelly Blue Book or similar published valuation source. In other states, the person applying for a bonded title must furnish a written statement of value from a state-licensed motor vehicle dealer.
A bonded title is good for a certain number of years, which corresponds with the duration of the title bond. A duration of three years or four years is typical. If anyone were to contest the ownership of a vehicle for which a bonded title has been issued, it is likely to occur within that time.