When a vehicle is received in Texas without sufficient or complete proof of ownership, the owner of the vehicle may be asked to obtain what is called a bonded title as an alternative to a tax assessor-collector hearing. A bonded title is identical to an original title except it has a surety bond is attached to it. By following the five steps to getting a bonded title, you can get your vehicle on the road in no time.
Step 1: Contact your local Department of Motor Vehicles
The Texas Department of Motor Vehicles, or DMV, is the office responsible for issuing vehicle titles for the entire state of Texas. The first step to getting a bonded title is to visit your nearest branch office and apply for a title. If it is determined that evidence of ownership is insufficient to issue a title for the vehicle, the owner may opt to choose a bonded title. Those who are eligible for a bonded title in Texas include residents of the state, military personnel stationed in Texas, or those possessing a vehicle most recently titled in Texas.
Step 2: Complete Necessary Documents
Once an applicant contacts their local DMV office, they will be required to submit paperwork and a $15 application fee; the DMV accepts payment of the application fee via cash, check, or money order. The documents to be submitted when applying include the following:
- A Statement of Fact for Bonded Title (Application Form VTR-130-SOF)
- Supporting evidence of ownership (Bill of Sale, Invoice, Cancelled Check, etc.)
- Photo ID
For those who are a Texas resident, but the vehicle is an out of state vehicle, the vehicle identification number must be verified by a Texas certified Safety Inspection Station. Inspection Station locations can be found on the Texas Department of Public Safety site. If necessary, this form should be submitted along with all other required documents.
Step 3: Wait for Approval
After all necessary documents have been submitted, the applicant should wait for the Department’s approval for a bond. When the DMV approves an application for a bonded title, they will issue a rejection letter including information regarding the amount of the surety bond they will need and if there is a lien less than 10 years old on the vehicle to be titled. It is important to note that getting a surety bond for a vehicle with a lien may be very difficult due to the likelihood of claims. Many companies will require a certificate of lien release prior to issuing the bond.
Step 4: Purchase a Surety Bond
Once an applicant receives the amount of the bond they need to get, which must be 1.5x the appraisal amount of the vehicle, they should contact an agent to buy their surety bond. The amount of the bond will determine the price—also called premium—an applicant pays for their bond. The cost breakdown for Texas title bonds is as follows:
- Bond Amount: $1-$6,000 / Cost: $100
- Bond Amount: $6,001-$25,000 / Cost: $15 per $1,000 of coverage ($100 minimum)
- Bond Amount: $25,001+ / Cost: Subject to Underwriting
What does underwriting mean?
When a surety bond is subject to underwriting, it means the bond needs additional consideration and cannot be issued instantly. Bonds are often submitted for underwriting due to the riskiness associated with the obligation or a large bond amount being required. While many title bonds can be issued instantly at a set cost, those that exceed $25,000 must be submitted for an underwriter to review. An underwriter will look at things such as the applicant’s credit and other qualifications when determining a cost, so the exact price will often vary from one applicant to another.
Once the premium of the surety bond has been calculated, the applicant must pay it in full for the bond to be issued. The bond will then be sent to the applicant’s preferred mailing address, at which point they must physically sign the bond.
For a more in-depth explanation of these bonds, visit the Texas certificate of title page on our website.
Step 5: Apply for a Bonded Title
Once the applicant has received their title bond, they have 30 days to submit it along with any additional documents to the county tax office, which is responsible for many title-related issues. The additional documents to be included with the surety bond are those listed in step two of the process, the original letter provided by the Regional Service Center, and a completed application for Texas title and/or registration. Additional documents may be required for vehicles without a Texas record, vehicles previously titled in another state, or imported or commercial vehicles. More information can be found by visiting the TxDMV website. If the bond is not submitted within the 30 days, the obligee will not accept it and a new surety bond must be issued, meaning the premium must be paid a second time.
Once all of the required documents have been submitted to the county tax office, a bonded title will be issued to the applicant. Bonded titles in Texas are effective for a period of three years, at the end of which it will be replaced with an original title.