A Tennessee Motor Vehicle Title Bonds is a three-party financial guarantee that protects buyers, sellers, lien holders and other interest holders to a vehicle when the state issues a duplicate title or a title without being satisfied to the ownership of the vehicle. The state may also require these bonds when they are not satisfied that there are no security interests such as lien against the vehicle.
The bond also requires the compliance with all provisions of the Tennessee Code 55-3-103(b).
The title applicant is referred to as the principal on the bond. The principal pays a third-party bond company, referred to as the surety to issue the title bond. In exchange for payment and indemnity, the surety provides a financial guarantee to the State of Tennessee Department of Revenue (DOR). This party is called the obligee.
The title bond guarantees that if a party is harmed because the state issued a duplicate title to the principal, that party can file a claim on the bond. The surety will investigate claims and pay them. The surety then has the right to seek reimbursement from the principal.
A Tennessee Motor Vehicle Title Bond provides value to the public by protecting them from vehicles with fraudulent titles. A damaged party, whether a buyer, seller, lender or other party, can simply file and collect against the bond. Surety bond companies must be rated for their liquidity and claims paying ability, so this is often much faster and easier than seeking damages from the principal.
A Tennessee Title Surety Bond may be used when according to the DOR’s website:
“When owners of vehicles/manufactured homes with a fair market value (FMV) greater than $3,000 and a manufacture year of less than 30 years old cannot supply requisite proof of ownership, an approved Surety Bond Application may be used to support an application for title. Additionally, ATV’s, golf carts, trailers could qualify for a surety bond.”
Tiny homes in Tennessee are also eligible for a bonded title.
A vehicle title bond can be used for a salvage vehicle, but the applicant will receive a salvage
There are some exclusions to bonded titles which can be found below.
If a vehicle, manufactured home, or mobile home is older than thirty years old, or has a value of less than $3,000, an applicant can just submit a Certificate of Ownership to obtain a title. A title bond is not needed.
A Tennessee Vehicle Title Bond cannot be used for any legally affixed mobile home. According to the state:
“A legally affixed mobile home has an Affidavit of Affixation on file in the county register of deeds’ office. A check for a recorded Affidavit of Affixation with the county register of deed’s office will be done for all mobile homes needing a surety bond.”
Tennessee considers affixed mobile homes as “dwellings” so they do not qualify for a bonded title.
A Tennessee vehicle title bond may only be used for Tennessee residents, or a person or company that has a residence or office in the state of Tennessee.
Tennessee Title Bonds are required to be for one and one half times (1.5x) the vehicle’s value as determined by the department. For example, a vehicle with a value of $10,000 would need a title bond in the amount of $15,000.
A Bill of Sale is the preferred method for establishing value. If no bill of sale is available, the below means may be used.
Tennessee Vehicle Title Bonds can be purchased online instantly and without a credit check in most cases. An applicant will need to enter their contact information along with the vehicle year, make, model, Vehicle Identification Number (VIN) and bond amount. The applicant can then submit, pay and print their bond in minutes. The entire process can be completed online, but the experts at Axcess Surety are always ready to help.
For manufactured homes and mobile homes, the physical address of the home must be printed on the title bond or the application will be rejected.
Tennessee Title Bonds cost less than 1% of the bond amount for most applicants. For example, a $20,000 Tennessee title bond can be purchased online for $180. There is generally a $100 minimum, however.
A Tennessee vehicle title bond must remain in place for three years. At the end of three years, the bond will be returned. The bond can be returned before three years if the vehicle is no longer registered in Tennessee and the certificate of title is surrendered back to the state.
The state of Tennessee allows both corporate surety bonds and personal surety bonds to be used for a certificate of title. Corporate Sureties are large corporations that are rated by independent third-parties such as A.M. Best to certify their financial strength and their ability to pay claims. Because of their financial strength, only one corporate surety is required for a vehicle title bond in Tennessee.
Personal Sureties are bond companies that are using the individual assets of a person or persons. The backing of the individuals is often in question and these bonds have been involved in much fraud. Because of their questionable assets, Tennessee allows title bonds to be backed by personal sureties, but they require two “solvent” personal sureties to be on the vehicle title bond. The two sureties must own land in the state and not be related. They must also submit a General Tax Certification showing the property’s most recent value. A person cannot act as their own surety.
When it comes to a Tennessee vehicle title bond, it is best to avoid the risk of a personal surety. For one, it may provide no real protection to the vehicle’s interested parties. It could result in the principal having to replace the bond and paying the premium twice.
Tennessee Department of Revenue, Special Investigations (ATTN: Surety Bonds)
Andrew Jackson Building, 11th Floor
500 Deaderick Street, Suite 11.125
Nashville, Tennessee 37242
Needing a replacement title is common. Fortunately, Tennessee is one of many states that allows for a title to be obtained by using a surety bond. These bonds offer great protection, are inexpensive and easy to obtain. Contact the experts at Axcess Surety today for help with your bonded title. You can also visit our Surety Bond Guide for more information about surety, including many frequently asked 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.
