The Expert Podcast

So why would you need a surety bond for a motor vehicle title in the DMV? If you're watching this video, it's because either the title office or some other party told you that you need to get a surety bond to get a vehicle title. What happens is, in order to get a title for a vehicle in any state, you're normally supposed to bring them the old title signed over to you from the prior owner. And if you don't have that old title — you lost it, it was damaged, or maybe you never got it — one option you have is to do the bonded title process.

What that entails is: you sign some affidavits, you fill out some forms, and you get a surety bond. You submit it to the DMV or the licensing board, and they give you a title based on your say-so. If you don't have the old title, this is a way to bypass that. How does it work, and how do you get a bond? Well, here's an example of the process from the state of Florida. Almost every state that does bonded titles — which is, I believe, 42 states (there are 8 states that do not) — they have a form for that bond.

They don't let the bond company make up the bond certificate; they have to use their own form, and it's a fill-in-the-blanks form. This is a title surety bond for a motor vehicle. The principal is the applicant, the person looking to get a title. The obligee is the Florida DMV. And then the surety is the bonding company. So what they're going to do is they're going to put the bond number on it. They're going to put the surety company, year, make, model, and VIN number of the vehicle.

You see that down here — it gives you the condition saying that the vehicle is subject to that surety bond. If you look at the language, it says that the principal shall indemnify all prior owners and lien holders and all subsequent purchasers of the vehicle from loss or damage occurring because the title was issued or for a defect.

So what this does is it gets the DMV off the hook. When the DMV issues that title to the new owner — that legal title document — they're putting themselves at risk. Because if somebody pops up out of the woodwork and says, "Hey, that was my car," or some subsequent buyer has a problem with the title, they can't go back to the DMV and say, "Look, you gave me a title and it's no good."

So this bond guarantees that whoever is damaged by the DMV giving a title without really having the right paperwork is going to be made whole. The principal is indemnifying against this. So an interested party has the right to recover on the bond for a breach. The aggregate liability is not to exceed the amount of the bond, which is going to be on here — the amount of the bond, right here, the penal sum of X amount.

Who has to sign this? Well, you — the principal applying for the title. The surety agent, who is issuing the title. And they have to put all their information. Once this is issued, and the right applications are attached to it, it's submitted to the title office — the DMV in most states — and they will give a title, which will reflect the fact that it's a bonded title and that there may be this bond on it.

Now, the bond may expire after three years or five years, depending on the value of the vehicle. So at that point, the title is then without a bond. Remember, as the principal, you have certain obligations and liabilities. Make sure you understand what the bond is requiring you to guarantee. Even though you're paying for it, you still may have other liability beyond the payment of that bond.

In order to get pricing on a bond, check out our website probonce.com. What you're going to find is: typically, a surety bond for a vehicle that’s $6,000 or less is going to cost you about 100 bucks. That's not a price quote — that's just an idea of what this is going to cost. If the bond is, let's say, for a $10,000 car, it might be a couple hundred bucks, maybe $150 or something like that.

A lot of people have the misconception that you have to pay thousands of dollars for a fee. For example, most states say you have to buy a bond for 1.5 times the value of the car. So if a car is worth, let's say, $6,000, 1.5 times is $9,000. People think they have to come out of pocket $9,000 — that’s not how it works. You purchase the bond for $9,000, which might cost you $150–$200.

So get a good quote on your bond. You’ll need your VIN number. You’ll need your make and model. You also need your personal information. If you're purchasing a bond for more than $25,000 in some states, you will need to have credit run on you and a background check, because they're guaranteeing your bond.

If you are in a state that has other requirements — some states require the vehicle be inspected. As an example, the state of Florida has another requirement: that if the vehicle was last titled outside of Florida, they will not issue a bonded title. So make sure you understand the requirements in your state. You can check out our business partner you see on the website at cartitles.com for more requirements for bonds.

If you have questions about the bonding process, you can reach our website. But a bonded title is a very good method to get a title when you're missing paperwork. And the surety bond is a very powerful instrument that will help you bypass all the aggravation at the DMV to get a title put in your hand — without having the right paperwork from the seller.