What Does It Mean When a Vehicle Needs to Be Bonded?

If you’ve heard that a vehicle needs to be bonded or that it requires a bonded title, you may be wondering what that actually means. This process is quite common when there are issues with the ownership documentation of a vehicle. In this article, we’ll explain in detail what a bonded vehicle is, when a bonded title is necessary, and how to obtain one.

What Is a Bonded Title?

A bonded title (also known as a certificate of title surety bond) is a legal document that allows the vehicle owner to obtain a title when the standard title is unavailable or lost. This process is especially useful if the vehicle was purchased without a title or if there are ownership disputes.

A bonded title looks almost identical to a regular title but will have the word “bonded” on it. This label typically remains on the title for a period of three to five years, depending on the state’s regulations.

When Is a Bonded Title Necessary for a Vehicle?

Several situations may require you to get a bonded title:

1. Lost title: If the original title is lost and you are unable to get a duplicate for some reason.
2. Vehicle purchased without a title: If you bought a vehicle from a private seller who did not provide a title.
3. Unclear or incomplete ownership history: If there is uncertainty about the ownership or history of the vehicle, such as vehicles purchased at auctions, salvaged, or abandoned vehicles.

In each of these cases, a bonded title allows you to legally establish ownership of the vehicle, providing protection to future owners and ensuring there are no disputes over ownership.

How to Get a Bonded Title

Obtaining a bonded title involves a few steps:

1. Check eligibility: Before starting the process, you need to verify whether you are eligible for a bonded title in your state. Each state has specific requirements and procedures.

2. Assess the vehicle’s value: You will be required to assess the value of your vehicle since the surety bond is issued based on this value. The bond amount is often set at 1.5 to 2 times the vehicle’s appraised value.

3. Purchase a surety bond: After getting an assessment, you need to buy a surety bond (title bond) from an insurance company or a bonding agency that specializes in this type of service. This bond protects future owners or any rightful owner who may come forward within the bond period.

4. Submit your application: After securing the surety bond, you submit it along with your application and required documents to the state’s motor vehicle agency (like the DMV in the United States).

5. Receive the bonded title: Once your application is processed and approved, you will receive a bonded title that indicates the vehicle is bonded. This bond label remains on the title for a specified number of years, typically between three and five.
   
   

What Happens After the Bond Period Ends?

If no one makes a claim to your vehicle during the bonding period, the “bonded” notation can be removed from the title. At that point, you will be issued a regular title, and the surety bond will no longer be necessary.

Why Is a Bonded Title Important?

A bonded title is crucial for vehicle owners who face issues with their ownership documents. It provides legal ownership rights and protects future buyers from potential ownership disputes. If you plan to sell your vehicle in the future, having a bonded title ensures that the transaction is legal and hassle-free.

When a vehicle needs a bonded title, it means there is an issue with its ownership documentation, but there are legal ways to resolve it. The process involves getting the vehicle appraised, obtaining a surety bond, and applying through the state motor vehicle agency. After a certain period, you can receive a regular title, removing the “bonded” notation.

If you have a vehicle with missing or unclear ownership documentation, don’t worry. The bonded title process can help you legalize your ownership and avoid future legal complications.