A bonded title is a special type of vehicle title you can get when the original is lost, damaged, or otherwise missing. It is based on a surety bond to assure you are the rightful owner.
You can think of it as an insurance policy that allows you to register, insure, and/or sell your car without needing a clean title. If you’re in Texas, Georgia, or any other state, let’s see what this means and how to deal with it!
Why Do I Need a Bonded Title?
A bonded title applies if a regular title is unobtainable for some reason. Perhaps the seller didn’t transfer it, or you lost the title after a trade. A bonded title is a document issued by your state’s DMV that is backed by a surety bond.
You may need a bonded title if you were given a car without a title, inherited one without paperwork, or if there was a mess with the title. You need it to register, insure, or sell a vehicle when you do not have an original title.
By protecting you and the state in the ownership dispute process, it doesn’t leave you stuck in a legal nightmare down the road.
After a period of time (3 to 5 years, depending on the state), and as long as it is not challenged, it is convertible to a standard title.
What is a surety bond?
A surety bond is very similar to an insurance policy that protects the surety company in the event that another individual can prove ownership of the car.
How to Get a Bonded Title
Obtaining a bonded title is not too complicated when you follow the steps in order.
- First off, verify with your DMV to find out if your state permits bonded titles. Most do, but a few, such as Delaware, do not.
- Make sure you are eligible. You must be a resident or military stationed in the state, and the car cannot be junked, stolen, or in litigation.
- Make copies of your documents, such as the bill of sale, any proof of ownership, your ID, and possibly a vehicle history, appraisal, or inspection report.
- At the DMV, you will need to file an application and pay a small fee (e.g., $15 in Texas) for a notice to establish the bond amount. It is usually 1.5 times the car’s value using tools like the Standard Presumptive Value.
- You will need to purchase a bond from a surety company. They will typically do a credit check only. Many companies will approve quickly for a $100 bond amount if the title amount is under $6,000.
- You will need to submit proof of the bond back to the DMV or county tax office within 30 days, along with documentation such as a Vehicle Identification Report to prove authenticity for out-of-state vehicles.
- Now you will wait for approval. Depending on how busy your DMV is, processing can take weeks to months.
When the approval comes through, you will have completed the first stage of the process and will begin to move forward until the bond expires, typically in 3-5 years.
How Much Does a Bonded Title Cost?
The bonded title cost depends on the amount of the bond, which is tied to your car’s value. For bonds with amounts up to $6,000, you’re likely paying approximately $100, but it would increase if the value is higher, as some states charge a percentage of the bond.
In Texas, the base fee is a $15 application fee plus the bond premium, which varies. If the bond amount is over $20,000, an underwriter may ask some questions.
But many companies do not require underwriters and charge no additional fee for liability. It’s a small price to pay for peace of mind!
How Long Does It Take to Get a Bonded Title?
The timeline varies by state, but here’s a snapshot based on general processing and bond terms:
| State | Processing Time (Application to Approval) | Bond Term (Until Clear Title) |
| Texas | A few weeks to 1-2 months (30 days to submit bond) | 3-5 years |
| Georgia | 3-5 weeks | 3-5 years |
| Arkansas | 3-5 weeks | 3 years |
| Arizona | 3-5 weeks | 3 years |
| Florida | 4-6 weeks | 3-5 years |
| Illinois | 3-5 weeks | 3-5 years |
| Colorado | 3-5 weeks | 3-5 years |
| Nevada | 3-5 weeks | 3-5 years |
Processing includes the appraisal, paperwork, and DMV approval, which takes some time. But purchasing a bond is relatively quick (minutes to a few days). Bond term is considered when it converts to clear if unchallenged.
Is a Bonded Title Bad or Should I Buy a Car With One?
A bonded title is not “bad”, but it is not the same as a clean title. Remember, it shows you have a gap in the ownership history, which may make some buyers hesitant or negatively affect the car’s resale value.
You can buy a car with a bonded title as long as you have checked to see if it was stolen or if there are any lien issues & do proper due diligence!
It’s completely fine if you’re comfortable with wait and disclosure, but some people avoid it because they simply do not want to deal with the hassles.
A Reddit user shared their experience of buying a car with a bonded title, which they didn’t find out until 15 months later, when they wanted to sell the car.
“I didn’t find out until 15 months later because I was trying to sell the car, and they ran a title check and told me it was a bonded title. Then I went home and looked at the actual title, and it says bonded,” the user commented.
“The dealer I took it to wouldn’t take the trade at all because of the bonded title. They just flat-out rejected it.”
This is an example of how sketchy some dealers can be, so you need to be attentive to the agreement and do your due diligence before buying a used car.
Also Read: Is 200,000 Miles Bad For A Used Car?
Can You Sell a Car With A Bonded Title?
Yes, you can sell a car with a bonded title, but you must inform the buyer that it is bonded. The buyer will take the bonded title responsibility for the duration of the bond period (3-5 years), where the bond will clear if no one claims the car.
The key here is full disclosure. It is the right thing to do to stay legal & build trust with the buyer!
If you don’t fully disclose the issues, you may be creating potential trouble for yourself.
Is Insurance More Expensive With a Bonded Title?
Insurance doesn’t necessarily become more expensive with a bonded title because insurance rates are based on the value of the car, the history of the driver, and coverage levels, not the type of title.
However, if you have a used car with a rebuilt title, you’re more likely to pay higher insurance that reflects risk.
Some insurers may ask additional questions based on the bond, so shop around to compare.
Expert Tips on Bonded Title Application
Here’s what our car experts suggest on applying for a bonded title for your car.
- Apply early, keep receipts for everything related to your trip to the DMV, and use certified mail to prove the mailing date.
- If you’re in Texas, go online to the DMV website to set up an appointment, which may help expedite your experience once you arrive at the DMV. Double-check if there are liens against the title. Old ones over 10 years are particularly tricky to remove and may require a court order.
- Avoid sketchy sellers. Good sellers will have their buyers complete the paperwork appropriately and license the car.
- Oddly enough, skip large retailers if you’re in doubt and go for a trusted one.
Final Say
While the process might seem like a hassle, having a bonded title is a great option if you don’t have an original title for your car. I’d make sure to fully disclose the bonded title if I had one and was trying to sell my car to avoid any trouble in the future.
References
Surety Bonds Direct
