A bonded title is also called a Certificate of Title Surety and is used to prove the ownership of a motor vehicle in the United States. It can be used instead of the standard vehicle title to register, buy insurance for or sell the vehicle.
Obtaining a bonded title as opposed to a regular title requires three things from the Department of Motor Vehicles in most states.
The first is proof of due diligence in trying to obtain the original title. This includes documents and receipts used to contact the former owners or any relevant authorities. The second is obtaining the proper forms to request a bonded title. Some states have different forms depending on how much the vehicle is worth. The third is that the vehicle usually cannot be an abandoned vehicle; it must be a purchase or received as a gift. Some states require various taxes be paid on the vehicle before a bonded title is issued.
A bonded title is useful in several situations. It determines the legal ownership in the event this comes into question. For example, used car scams where two titles are sold to the same buyer. It allows the owner to register the car and buy insurance. It also prevents seller liability for misrepresentation.