Legally Buying or Selling a Car with a Bonded Title: A Comprehensive Guide

A bonded title is an important document that legally transfers a vehicle. Typically, the title is bonded for 3-5 years, during which time the rightful owner can reclaim the vehicle if it was fraudulently obtained.

Understanding a Bonded Title

A bonded title is accepted by the tax collector and is often required when purchasing a car whose previous ownership is questionable. This type of title can be removed after 3-5 years, depending on the state, as long as the correct legal procedures are followed.

Can You Sell a Car with a Bonded Title?

Yes, you can sell a car with a bonded title. To do so, you need to ensure that the seller provides necessary information, such as the bonded title or a valid registration certificate with the VIN number. Always keep a bill of sale to facilitate the transaction.

The Process of Buying a Car with a Bonded Title

To buy a car with a bonded title, the seller must provide all necessary documentation, including a bonded title or a registration certificate with the VIN number. Always have a bill of sale to protect yourself and the buyer during the transaction.

Once at the Department of Motor Vehicles (DMV), the transaction and transfer of the title occur right there. A government agent at the DMV will create a new title for the new owner. Make sure you are paid in cash or via a cashier's check. Keep the bill of sale for the new buyer.

The Regular Process of Dealing with a Bonded Title

A bonded title can be purchased if the registered owner cannot prove their claim to the car. This is done through a surety bond, which guarantees that if the registered owner comes forward within 3 years to reclaim the car, the bonding company will cover the previous owner's claim.

Bonded titles are generally not worth pursuing legal action for because most cars are not worth the cost of hiring a lawyer and suing. Bonds are priced on a sliding scale based on the value of the vehicle. Once the car is in your name, it will simply say “bonded title” in the remarks section. However, this should not affect the car's value.

Remember, the transfer of a bonded title is done the same way as any other car, with the only difference being the period during which the title remains bonded.

In summary, buying and selling a car with a bonded title is a straightforward process. Just ensure you have all the necessary documentation, follow the legal procedures correctly, and keep all relevant paperwork. Protect yourself and the buyer by insisting on a bill of sale and proper payment methods.

Conclusion

Dealing with a bonded title might seem intimidating, but with the right knowledge and documentation, it can be a smooth process. Always stay informed and be prepared to handle the transaction in a responsible manner.