A bonded title is a type of vehicle title that is acquired using a surety bond when the vehicle owner does not have valid prior title documents or those documents have been damaged. Typically, a vehicle title is signed over to the new owner by the prior title holder when purchasing the vehicle. Unfortunately, not all sellers deliver on their promise of a title. If you live in Texas and you are trying to obtain a new vehicle title without valid prior title documents, you may be able to obtain a bonded title.
Step 1: Determine if your vehicle qualifies for a bonded title
The following reasons may render your vehicle ineligible for a Texas bonded title:
- Is the vehicle in your possession?
- Are you in control of the vehicle?
- Are there any liens or security interests?
- Is the vehicle non-repairable, junk, or salvage?
- Is the vehicle complete?
Liens and security interests
Vehicles that have a lien or security interest on the title are not eligible for a Texas bonded title unless one of the following conditions is met:
- You have obtained a lien release signed by your lienholder
- The lien is more than 10 years old
Non-repairable, junk, salvage, and incomplete vehicles
Vehicles that fall into one of these categories are not eligible for a Texas bonded title. To check if your vehicle is non-repairable, junk, or salvage, perform a VIN check through the NMVTIS database. Incomplete cars are vehicles that are inoperable or disassembled. Vehicles that are disassembled or incomplete are not eligible for a Texas bonded title.
Step 2: Complete the Texas Bonded Title Application
If your vehicle is eligible for a bonded title, the next step is to begin the application process. Complete the Bonded Title Application or Tax Collector Hearing Statement of Fact (VTR-130-SOF) with the following information:
- Odometer reading
- Purchase price
- Your information (if you are to be the new title holder)
- Explanation for application
- Answers to all application questions
- Certification of application
- Copy of your ID
Explanation for application
This section of the Texas bonded title application is very important. Why are you requesting a bonded title? Why don’t you have the prior title? Oftentimes the answer is simply “I bought the vehicle online and never got a title” or “I lost the title document”. The Texas DMV wants to make sure that you’re requesting a bonded title in good faith.
If your vehicle meets the criteria described on page two of the bonded title application as a rebuilt or newly assembled vehicle, you may be required to submit additional documents. Be sure to review the instructions prior to submitting to the DMV. Once completing this application, submit it to the Texas DMV along with a processing fee of $15.00 and any evidence of ownership you have such as a bill of sale or canceled check.
Step 3: Determine your vehicle’s value
Texas has a specific method to determine the value of your vehicle. Using the Standard Presumptive Value (SPV) on the Texas DMV website, input your vehicle’s information to obtain the presumvalue. If your vehicle’s value cannot be determined through the SPV, your vehicle will need to receive an appraisal from a licensed dealer or insurance adjuster.
Step 4: Purchase your surety bond and submit final documents
Once your application has been approved and you’d like to proceed with the bonded title, you can purchase your surety bond. The amount for the bond will be determined by your vehicle’s SPV value or appraisal value. To purchase your surety bond, visit a surety bond agency such as ProBonds.com. The surety bond amount for a Texas title bond is 1.5x the value of the vehicle. However, this doesn’t mean you’ll have to pay thousands of dollars just to obtain a surety bond. Most surety bonds cost around $100-$150 to purchase, the surety bond company backs the DMV with the remainder of the amount. The reason for the surety bond is to protect the DMV in the situation where there is a discrepancy of ownership over your vehicle.
After being approved for a Texas bonded title and purchasing your surety bond at 1.5x the value of the vehicle, gather all of the documents and submit them to the county tax assessor-collector’s office for the application to be processed or a hearing to be held. Include the Application for Texas Title and/or Registration (130-U), both pages of the Bonded Title Application (VTR-130-SOF), Form VTR 130ND issued to you by the Texas DMV stating the amount of your bond, and the Certificate of Title Surety Bond (VTR-130-SB). If your vehicle requires an inspection or VIN certification, be sure to review and include those necessary documents as well.
A Texas bonded title is a great alternative when vehicle owners are unable to provide prior title documents. This article is not a full list of instructions, if your vehicle meets rebuilt, kit, or otherwise reconstructed criteria, there may be additional steps you need to take. Before proceeding with a Texas bonded title, make sure to contact your local Texas DMV to determine eligibility.