A California Motor Vehicle Title Bond is a surety bond that helps protect owners, purchasers, lenders and other interested parties of vehicles for which the state cannot obtain regular evidence of ownership. The bond provides a third-party financial guarantee to protect parties harmed by issuing a duplicate title.
A California Lost Title Bond guarantees that if a seller, purchaser, lender or other interested party is damaged by the state’s issuing of a duplicate title, the bond company will reimburse them for damages. This allows the state to reduce the risk to parties buying or selling a vehicle with a duplicate title.
The bond further guarantees that the applicant and surety will honor all of section 4157 and 4307 of the California Vehicle Code, and comply with the bond requirements of California chapter 2, title 14, part 2 of the Code of Civil Procedure.
The applicant applying for the title is referred to as the principal on the bond. The principal pays bond premium and provides indemnification to a surety bond company, called the surety. The surety then provides a financial guarantee to the state of California, called the obligee. If a party suffers a loss because of the principal obtaining a duplicate vehicle title, the damaged party can make a claim to the surety or the state of California. The surety will then investigate the claim and pay it if it is valid. The surety can then go back to the principal and seek reimbursement for any amounts paid.
The bond is valuable by providing protection to all parties involved in buying, selling or lending on a vehicle with a replacement title. If a party is damaged, it may be quicker and easier to collect from a third-party bond company than trying to pursue payment from the principal.
Any party that cannot prove ownership of a motor vehicle by traditional means may apply to the state for a bonded title. Motor Vehicle in California means any self-propelled vehicle excluding wheelchairs, motorized tricycles, or quadricycles. It does include recreational vehicles. Chapter 4157 of the California Vehicle Code states:
“In the absence of the regularly required supporting evidence of ownership upon application for registration or transfer of a vehicle, the department may accept an undertaking or bond which shall be conditioned to protect the department and all officers and employees thereof and any subsequent purchaser of the vehicle, any person acquiring a lien or security interest thereon, or the successor in interest of such purchaser or person against any loss or damage on account of any defect in or undisclosed claim upon the right, title, and interest of the applicant or other person in and to the vehicle.”
The same rules apply to vehicles from outside the state referred to as Foreign Vehicles. Chapter 4307 of the Vehicle Code says:
“In the event application is made in this state for registration of a vehicle and the department is not satisfied as to the ownership of the vehicle or the existence of foreign liens thereon, then the department may register the vehicle and issue a distinctive registration card and appropriate license plates but shall withhold issuance of a California certificate of ownership unless the applicant shall present documents sufficient to reasonably satisfy the department of the applicant’s ownership of the vehicle and sufficient to identify any liens thereon or the applicant shall post a bond pursuant to Section 4157.”
California requires the defective title bond to be equal to the vehicle’s fair market value. The market value of the vehicle is based on the cost price to the purchaser as evidenced by a certificate of cost, bill of sale, titling document, or Kelley Blue Book value. The market value includes any trade in or down payment amount but does not include the taxes.
The surety bond amount is the most the bond company will have to pay out on the bond, regardless of the dollar amount of the claims or the number of claims filed. It is also the most the bond company will have to pay regardless of how many years they have written the bond.
The cost of a California Motor Vehicle Title Bond is 1% of the bond amount or less for most applicants. For example, a vehicle with a value of $30,000 will cost $270. The chart shows the pricing for many common bond amounts.
California Motor Vehicle Title Bonds can be purchased directly online in a matter of minutes. These bonds do not require a credit check for most amounts. In addition to the applicant's contact information, they need to provide the vehicle’s make, model, year, vehicle identification number (VIN) and license plate number. An applicant will also need to know the vehicle’s fair market value to enter the bond amount. Once the information is entered, a customer can submit, and purchase their bond. The bond will have to be mailed to meet California's requirements, however.
Yes, almost anyone can get a California Title Bond from Axcess Surety because most of these bonds do not require a credit check. However, contact us anytime if you have concerns. Our people have the experience, products and surety markets to help individuals and businesses in most circumstances.
California requires a bond to be in place for 3 years on bonded titles. If the vehicle is no longer registered in the state of California and the Certificate of Ownership is returned back to the state, the bond may be canceled. The surety may also cancel the bond by providing a 30 day notice to the state. In such cases, the bond principal will need to submit a replacement bond.
Each applicant will need to complete an application and bring it to the DMV.
Several other documents will need to be completed and brought with the applicant to the DMV. These include:
As discussed above, each applicant will need to obtain a surety bond for the vehicle’s fair market value. Fortunately, these can be purchased online quickly and easily.
Each motor vehicle needs to have a vehicle inspection performed by an authorized DMV representative, a California licensed vehicle verifier, an authorized auto club employee, or a peace officer who has been properly trained to perform vehicle verifications. The authorized party will need to complete a Vehicle Verification Form (Reg 31). Only complete and assembled vehicles are allowed to be inspected.
The applicant will need to bring all the above information and forms to a California DMV office. Additionally, the applicant will need to pay all fees for title and registration.
California Motor Vehicle Ownership Title Bonds are common, and needed when the state cannot property confirm vehicle ownership. These bonds are very inexpensive and easy to obtain online. Learn more about surety bonds including many frequently asked questions by visiting our Surety Bond Guide. Additionally, contact the bond experts at Axcess Surety anytime for all your surety bond needs and questions.
Axcess Surety is the premier provider of surety bonds nationally. We work individuals and businesses across the country to provide the best surety bond programs at the best price.
