A Colorado Certificate of Title Bond is a surety bond that is used when ownership of a vehicle or manufactured home cannot be verified, or if there are questions as to the lien status. The bond acts as a financial guarantee for any party harmed by the state’s issuing of a title for the vehicle when the vehicle ownership cannot be verified under Colorado Code 42-6-104. These bonds are commonly referred to as vehicle title bonds, defective title bonds or bonded title surety bonds.
A Colorado Certificate of Title Bond is a three-party agreement between a principal, a surety bond company and an obligee. The party needing a certificate of title is known as the principal. The principal pays money called a premium to a surety bond company and agrees to indemnify the bond company against losses. In return, the bond company provides a financial guarantee to the state of Colorado, known as the Obligee.
The bond provides protection to any party harmed by the state’s issuing of a Certificate of Title where ownership of the vehicle is in question. A damaged party can make a claim against the title bond. In such cases, the surety will investigate the claim and pay the damaged party. The surety can then seek to be reimbursed by the principal under the indemnity agreement. The certificate of title bond provides valuable protection. Surety bond companies and licensed and rated for their ability to pay claims. A damaged party will usually find it much easier to collect from a surety company than trying to collect directly from the principal.
An example of a claim against a Colorado Certificate of Title Bond would be if a vehicle is sold to the buyer, and subsequently discovered that the seller was not the rightful owner of the vehicle. The buyer could then make a claim against the surety bond for defective title and get reimbursed for damages.
A Colorado Certificate of Title Bond must be at least twice the reasonable amount of the vehicle’s value. A reasonable value must be determined by the following:
When obtaining an appraisal through any of the above, the appraisal must be in the same condition as the vehicle. All appraisals must also identify the vehicle by the Vehicle Identification Number (VIN), year, make and model.
Manufactured homes must be valued according to the county assessor’s value.
Colorado Certificate of Title Bonds are easy to obtain for most. Most amounts can be purchased online instantly, and without a credit check. Applicants will need:
The applicant can complete the online application, purchase the title bond and print the bond within a few minutes.
Larger certificate of title bonds may also be purchased online. However, some may require a personal credit check of the applicant.
Most Colorado title bonds can be purchased without a credit check. Only very large amounts may require any check at all. Axcess Surety understands that credit challenges can happen to anyone. We work with bond companies for those in almost all situations and can help applicants who have had past credit issues and bankruptcies in most cases. Contact us today to learn how we can help.
Most applicants can purchase a Colorado Certificate of Title Bond for 1% of the bond amount. For example, a $50,000 title bond would cost $500, while a $25,000 title bond would cost $250. Other applicants may pay as much as 1.5% of the bond amount for title bonds of larger size.
A Colorado certificate of title must remain in place until the vehicle is sold, or ownership is otherwise transferred. This is different from other states where the bond is usually no longer needed after a period of time, such as three years.
Colorado will allow an applicant to post cash, or a certificate of deposit (CD) instead of a surety bond under C.R.S. 11-35-101. There are reasons that an applicant may want to reconsider using one of these methods. The state will hold on to this collateral until the vehicle is sold or ownership is transferred. Therefore, the applicant could have their cash tied up for a long period of time. Since money has time value through interest and investments, cash is often better used for other purposes. Another reason is a claim against the applicant. With cash and CDs, there is little defense against a claim.
1. Complete a VIN inspection on the vehicle. This must be done by a certified P.O.S.T. inspector. The inspector will provide form DR 2704 which must be dated within one year of the time of application for a Certificate of Title. Manufactured homes do not need an inspection but must complete form DR 2698.
2. Complete Form DR 2489A Motor Vehicle Requestor Release Affidavit of Intended Use. A trackable copy of letters must be sent to all owners and lienholders. The letter must include all of the following:
If no Colorado records are found, a national database search must be completed. If no record is found in the national database, a record search of the state in which the vehicle was purchased must be completed.
For manufactured homes, an attempt must be made to contact the owner of record by letter. The letter must be sent by certified or registered mail.
3. MUST obtain a lien release if the record shows a lien on the vehicle. You cannot obtain a bonded vehicle title in Colorado without a lien release.
4. Obtain a Colorado Certificate of Title Bond or alternative.
5. Complete Form DR 2394 Bond Statement Guide & In Lieu of Bond Affidavit.
6. Take all Items to the local Colorado Division of Motor Vehicles.
Colorado Certificates of Title are required when the state cannot properly verify the ownership of a vehicle. The process allows the state to issue a title while protecting sellers, buyers and other interested parties in the vehicles. Fortunately, these title bonds are easy to obtain and can be purchased online in most cases. Those needing bonded titles can also contact the experts at Axcess Surety anytime for assistance. Other Colorado bonds can also be purchased directly at the Colorado Surety Bonds Page.
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.
