Defective Title Bond

A defective title bond is required by the state and the Department of Motor Vehicles for individuals who attempt to register a vehicle that has a lost or defective title.
Key Highlights
- A defective title bond is also known as a certificate of title bond or lost title bond.
- A defective title bond is needed when a person purchases a vehicle from a seller with a bill of sale but fails to receive a properly endorsed vehicle title.
- It also guarantees damages up to the bond limit for the legitimate titleholder if they make a valid claim to the vehicle.
How do I purchase a defective title bond?
NFP, the nation's largest and most reliable surety company, is authorized to issue defective title bonds in each of the 50 states. We can provide the best rates for your bond, as well as the fastest issuance, to get your business off and running.
Our short online application makes it easy. Click below to start the application process today.
Defective Title Bond FAQs
A defective title bond is required by the state and the Department of Motor Vehicles for individuals who attempt to register a vehicle that has a lost or defective title. It is also referred to as a lost title surety bond. A defective title bond is needed when a person purchases a vehicle from a seller with a bill of sale but fails to receive a properly endorsed vehicle title, without which the state cannot transfer the title or accept the bill of sale. Requiring the buyer to post a defective title bond is the only recourse to licensing the vehicle in the buyer's name. It also guarantees damages up to the bond limit for the legitimate titleholder if they make a valid claim to the vehicle.
A defective title bond is typically needed by individuals who are trying to register or sell a vehicle but cannot provide a valid title. Situations where a defective title bond is needed include:
- The original title was lost, stolen, or destroyed.
- The vehicle was purchased without receiving a title.
- The seller has failed to transfer the title properly.
- The vehicle is too old to have a formal title on record.
- There are errors or missing information on the existing title.
- The vehicle has unresolved liens or legal claims against it.
The cost of a defective title bond typically depends on the value of the vehicle and the bond amount required by your state. Here's a general breakdown:
- Bond Amount: Most states require the bond to be 1.5 to 2 times the vehicle’s fair market value.
- Premium: You usually pay 1.5 to 3% of the bond amount, depending on your credit score.
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