How to Get a Bonded Title in Michigan?

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Michigan’s bonded titles. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

CONTACT US FOR A

FREE BONDED TITLE QUOTE

What Is a Bonded Title?

A Michigan bonded title provides a way for those who lack a title for a vehicle acquired through a private sale to register the vehicle in their own name. A bonded title enables a vehicle owner to do anything that can be done with a standard title—register it, or sell it, donate it, or otherwise transfer ownership to someone else. The only thing that distinguishes the two is the “BONDED” brand. 

Who Needs Them?

If you do not have a title for a vehicle you have purchases, it’s most likely because:

  • You did not receive one from the seller
  • You received a title that is invalid because it was fraudulently altered, improperly assigned, or illegible
  • You received a valid title, but it was lost or stolen before you were able to register the vehicle in your own name

You may get a bonded title if the vehicle was last titled in Michigan, is no more than ten years old, and is currently valued at $2,500 or more. If the vehicle was last titled in another state, the age restriction does not apply.

What Are the Steps in the Bonded Titling Process?

In Michigan, bonded titles are issued by section 217(1) (d) of the Michigan Department of State. Check with your local DMV first to make sure the vehicle is eligible. To obtain a bonded title, you must submit your completed title and registration application to the Department of State, along with a three-year Vehicle Uniform Surety Bond, commonly referred to as a Michigan title bond. 

In purchasing the bond, you must specify the vehicle’s current fair market value as determined by a licensed motor vehicle dealer or a recognized source of accurate vehicle valuations, such as Kelley Blue Book. The bond must be for an amount that is twice the vehicle’s fair market value, with a minimum amount of $5,000.

Why is a Title Bond Required?

The bond is your guarantee that the vehicle belongs to you and your pledge to pay damages to someone who is able to prove their ownership of or lien against the vehicle during the three years that the bond is in force. The bond also indemnifies the state of Michigan (the “obligee”) and the bond’s guarantor (the “surety”) against any responsibility for a financial loss experienced by the vehicle’s true owner or lienholder or someone you sold the car to as a result of you having been issued a bonded title. As the bond’s “principal,” you are legally obligated to pay any valid claim against the bond.

If no claims are received during the bond’s three-year term, you can exchange the bonded title for a standard one.

How Do They Work?

If the surety finds the claim to be valid, the surety will pay it, even though the legal obligation to pay claims belongs to you as the principal. But you must then reimburse the surety for the claim amount. Failure to do so can result in the surety taking legal action against you to recover the funds.

What Do They Cost?

Michigan title bonds for more than $25,000 go through an underwriting process; bonds for lesser amounts are typically sold for a flat fee based on the coverage amount. The main underwriting concern is the risk that the surety will not be repaid for claims paid on the principal’s behalf. 

That risk is measured largely on the basis of the principal’s personal credit score. A high score = low risk = low premium rate. A low score = higher risk = higher premium rate. The average premium rate is in the range of one to three percent.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about Michigan’s bonded titles. If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

CONTACT US FOR A

FREE BONDED TITLE QUOTE

What Are Bonded Titles?

Bonded titles are the solution for people who lack a standard title for a vehicle they have in their possession. The only difference between a bonded title and a standard title is that the former bears the “BONDED” brand. You can do anything with a bonded title that a standard title would allow you to do. 

If you do not have a title for a vehicle you have purchases, it’s most likely because:

  • You did not receive one from the seller
  • You received a title that is invalid because it was fraudulently altered, improperly assigned, or illegible
  • You received a valid title, but it was lost or stolen before you were able to register the vehicle in your own name

You may get a bonded title if the vehicle was last titled in Michigan, is no more than ten years old, and is currently valued at $2,500 or more. If the vehicle was last titled in another state, the age restriction does not apply.

In Michigan, bonded titles are issued by section 217(1) (d) of the Michigan Department of State. Check with your local DMV first to make sure the vehicle is eligible. To obtain a bonded title, you must submit your completed title and registration application to the Department of State, along with a three-year Vehicle Uniform Surety Bond, commonly referred to as a Michigan title bond. 

In purchasing the bond, you must specify the vehicle’s current fair market value as determined by a licensed motor vehicle dealer or a recognized source of accurate vehicle valuations, such as Kelley Blue Book. The bond must be for an amount that is twice the vehicle’s fair market value, with a minimum amount of $5,000.

The bond is your guarantee that the vehicle belongs to you and your pledge to pay damages to someone who is able to prove their ownership of or lien against the vehicle during the three years that the bond is in force. The bond also indemnifies the state of Michigan (the “obligee”) and the bond’s guarantor (the “surety”) against any responsibility for a financial loss experienced by the vehicle’s true owner or lienholder or someone you sold the car to as a result of you having been issued a bonded title. As the bond’s “principal,” you are legally obligated to pay any valid claim against the bond.

If no claims are received during the bond’s three-year term, you can exchange the bonded title for a standard one.

If the surety finds the claim to be valid, the surety will pay it, even though the legal obligation to pay claims belongs to you as the principal. But you must then reimburse the surety for the claim amount. Failure to do so can result in the surety taking legal action against you to recover the funds.

Michigan title bonds for more than $25,000 go through an underwriting process; bonds for lesser amounts are typically sold for a flat fee based on the coverage amount. The main underwriting concern is the risk that the surety will not be repaid for claims paid on the principal’s behalf. 

That risk is measured largely on the basis of the principal’s personal credit score. A high score = low risk = low premium rate. A low score = higher risk = higher premium rate. The average premium rate is in the range of one to three percent.

REQUEST A QUOTE

Request a quote online or call today to speak with one of our surety bond agents about getting you a good rate on the bonded title you need to do business in your state.