Your Guide To Buying A Car With A Title Bond

Your Guide To Buying A Car With A Title Bond

When buying a car, your excitement about the car’s condition, features, and price may overshadow your concern with the legal paperwork.

For first-time car buyers, the process can be confusing unless you have someone to guide you. One of the most important aspects to consider before you purchase a vehicle is the title’s standing.

A car with a “bonded” title may cause some of us to hesitate to buy it. Here’s what this means for you:

A Bonded Title:

A bonded title is similar to a regular car title and allows you to register, insure, or sell the vehicle. The only difference is that it is marked as “bonded,” representing its connection with a surety bond.

Why Would A Car Have A Bonded Title?

Vehicles that have a bonded title tend to do so for a simple reason. It may be that the original title for the car was lost or damaged between title transfers.

This leaves the person who owns the vehicle at the time without any legal proof of their ownership. A bonded title allows the owner to transfer the title of the car as well as get surety for the vehicle.

Discussing title bonds before buying a car

Surety Bonds:

This is where surety bonds come into play. Because the previous car owner could not provide proof of ownership without a title, the DMV won’t give them a new one.

To protect themselves and the car’s previous title owner, the owner purchases a surety bond. This bond safeguards the current and previous title owners of the vehicle.

If someone claims to be the legal owner of a car and that the bonded title shouldn’t have been issued, they can make a claim on the surety bond.

If their claim is found to be legitimate, the surety company is responsible for reimbursing the individual. After that, the person who bought the surety bond is obligated to pay back the surety company.

Risks Involved:

You’ll rarely find a claim on a bonded title because the DMV tends to carry out an investigation into the vehicle’s history before issuing the title bond.

However, if a claim is made, the surety bond won’t transfer, unlike the title. Therefore, your name won’t be connected to the bond itself, but the person who bought the surety bond will be responsible for repaying the claims.

In case the judge rules in favor of the claimant and you lose your vehicle, you’ll have to seek compensation from the person who previously sold you the car.

If you’ve lost the title bond for your car and are looking to replace it with a title bond, get in touch with SuretyEZ.

The firm provides many different types of bonds, including title bonds, contractor bonds, fidelity bonds, and more, for individuals, businesses, and industries in Los Angeles. Get in touch with them to learn more about title bonds.

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