If you purchase a car from a private seller (not from a car dealer) and didn’t receive a title, then you’ll need to purchase and maintain a lost title bond for a certain period. The lost title bond is a financial guarantee that you make if somebody else contests rightful ownership over the vehicle. If your bond goes unchallenged for the required duration, then the DMV can issue a new title under your name.
There are several instances in which you may need a lost title bond. In this lost title bond guide, we’ll cover:
Definition & Example
When You Need One
How It Works
Cost & Requirements
Where to Find & How to Apply
A lost title bond is a type of surety bond that allows you to register your vehicle if you did not receive a title at the time of purchase (usually from a private seller). The lost title bond functions as a kind of temporary title and can be challenged if somebody files a claim against the bond, alleging ownership. If your title bond goes uncontested after a period, you can apply for a regular title.
A lost title bond is a surety bond and like most surety bonds, there are three parties:
Principal: The driver that must obtain the bond because they did not receive a valid title after purchasing the car from a private seller (you).
Obligee: The party that requires you to obtain the bond — typically your state’s Department of Motor Vehicles (DMV).
Surety: The company that sells you the lost title bond.
(Lost title bonds are also known as certificate of title surety, vehicle title bonds, certificate of title bonds and car title bonds.)
Let’s say you were driving home and saw a car with a “FOR SALE” sign on the window. You purchase the car and also buy a lost title bond because the seller did not provide you with a title. Later, somebody filed a claim against your lost title bond and demonstrated legitimate ownership over the vehicle. The claim is approved and the claimant receives reimbursement.
Generally, you will need a lost title bond if any of the situations apply:
You bought a car but didn’t receive a title.
You bought a car but the title shows it’s under a different name.
You bought a car and received the title but lost it before it became officially registered under your name.
You bought a car and discovered the title was lost or stolen.
The purpose of a lost title bond is to protect against the sale of vehicles with fraudulent titles. If the DMV issues a replacement title for you after a private sale, then the rightful owner of that vehicle could come down months or years later contesting ownership. It’s very possible their vehicle was stolen and resold to you.
Therefore, lost title bonds protect both the rightful owner and the general public. Since lost title bonds act as a deterrent to fraudulent titles, there’s less likelihood for everyday consumers to be exploited. And if a bad transaction does occur, there’s financial recompense when the rightful owner claims ownership.
If your title bond goes unchallenged for a certain period of time — usually three to five years depending on your state — you can apply for a regular title.
When a claim is filed against your bond, it means that the claimant is claiming ownership of your vehicle. They will need to supply proof of ownership to the surety. If the claim is approved, then they can qualify for financial recompense for their loss. If they cannot prove the claim, then generally you will not need to take further action. Just keep in mind that you are still responsible for reimbursing the surety for any claim payouts they make on your behalf.
Since the cost of a lost title bond can depend on the fair market value of the vehicle sold, the premium can vary for each customer. Generally, those with good credit can expect to pay 1% to 3% of the bonded amount with a $100 baseline charge. So, if your minimum bond amount was $10,000, then you may pay $150 to $300. Applicants with poor credit may face higher premiums.
A lost title bond is not accepted across all 50 states. However, that doesn’t mean you should do nothing. Your best bet would be to contact your local DMV to explore your options. In some cases, you may need to apply for a court-ordered title.
While fraudulent titles are unfortunate, there are several sureties out there that sell lost title bonds to put you on the path to official ownership. You can typically obtain a lost title bond through insurance companies or specialized surety bond companies. Many sureties have an online application process with the following steps:
Submit an application that includes your personal and vehicle information (e.g., name, address, vehicle identification number or VIN).
Receive a premium quote based on your qualifications.
Purchase and receive your bond (or refuse and shop around).
File your lost title bond with the DMV. Additional filing fees and documents may apply depending on the agency.
Obtaining a lost title bond is easy when applying with Worldwide Insurance, Inc. Just fill out our initial application form and get an instant quote in minutes. With rates starting as low as 1%, we issue all types of surety bonds in all 50 states. No credit check required and no obligation.
A lost title bond is a type of surety bond that is required when you purchase a vehicle and don’t receive a valid title when the transaction is completed. Your bond serves a kind of temporary title. If your bond goes unchallenged after three to five years, you can apply for a valid title through your state’s DMV.
Premiums on a lost title bond typically start at $100 and can depend on the fair market value of the purchased vehicle. Generally, those with good credit will pay 1.5% to 3% of the minimum required bond amount.
Terms on lost title bonds typically last one year and you would need to pay another premium to renew it.
If you purchased a vehicle and don’t have a valid title, you will generally need to obtain a lost title bond or contact your DMV to explore other options. Depending on your state, a court-issued title may be required.
Yes, bad credit applicants can still get bonded but may face higher premiums. Worldwide Insurance, Inc. works with thousands of consumers and business owners — even those with low credit — to help them meet their bonding requirements.