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The Expert Podcast brings you firsthand narratives from experts across diverse industries, including private investigators, general contractors and builders, insurance agencies, vehicle specialists, lawyers, and many others.
So how does a bonded title work, and how can it help you get a title for a vehicle? Well, in most states—42, to be exact—there are 12 states where you can't get a bonded title. A bonded title will allow you to get a legal title for a vehicle that you have no paperwork on using a surety bond process. And the reason this can help you is that you can see this picture here; there's a barn, right? If you find an old car abandoned on the side of the road, you may be able to use the bonded title process.
Even though you see in this article the word abandoned, do not use abandoned vehicles as an application for a title. In almost every scenario, what's going to happen is that if you declare the vehicle abandoned, you're not going to get to keep it. Because if it's declared abandoned, the police will ask an authorized towing company to remove it, take it to storage, and then they will sell it at a public auction. Abandoned vehicles are not finders keepers. However, if you file for a bonded title, a surety bond title, it's basically you going to the licensing authority and saying, Look, I legitimately am authorized to have this vehicle.
I bought it; it was left on my property; I gave somebody money for it; I traded for it; but I don't have the old title; I don't have the transfer of ownership. Obviously, if you have the title, it would be easy. You know, a title is a certificate that looks like this; it's got all the official government printing on it. If you have that, you have no problem. But if you have purchased a vehicle, acquired a vehicle, traded a vehicle, or somebody left you a vehicle that has no legal title, now you have to do something different.
Now, one of the things that many people are misinformed about about a bonded title is that you have to pay thousands of dollars to get a surety bond. That's actually not true. What you have to do is purchase a surety bond in an amount that's equal to the value of the vehicle. But that surety bond is probably only going to cost you a hundred dollars for the actual surety bond. And once you get that surety bond, you have to sign some affidavits, fill out some forms, make sure everything is all eyes dotted, T's crossed, and submit it to the DMV. As long as the vehicle is not stolen and doesn't have any large open liens on it, it's not reported as parts only; they'll give you a title, and you can own that vehicle.
Now remember, if you say abandon instead of title in an article, let's say this right here: if you find an abandoned vehicle in your barn, that's not yours to keep. You have to call the police, and the boys in blue will get that relic from you, right? So don't say it's abandoned, because if it truly is abandoned, it's probably not yours to keep unless you go through some other process.
One of the processes they talk about is that you can put a lien on the car for a storage fee, but that's actually not completely accurate. And the reason why is that in order to do that, you have to be a licensed automotive shop, and you have to have signed repair orders saying somebody brought this car in for service. In fact, there's so much attempted fraud with that process that the state of Oregon says you need a $20,000 bond before applying for a mechanics lien. Body shops and other auto repairs will have to obtain a $25,000 bond in order to be able to assert a lien on a vehicle for non-payment. So most states are going to this model or already have, for that matter. You have to be a licensed automotive facility, you have to have a signed repair order, and you have to post a twenty thousand dollar bond. There are many easier ways to do it. Even if you have a buddy of yours who has a repair shop that wants to put in a fake mechanics lien, don't do it because they're going to audit that lien.
They're going to audit all of these mechanics lien processes. If you don't have all the documents from the owner, and when the ownership is changed, they're going to send a letter to that prior owner that says look, somebody filed for a mechanics lien on your vehicle to change the ownership. Did you bring your car in for service somewhere? And if that person says no, I sold it on Craigslist, or I traded it in, or I left it in some field, they're going to revoke that mechanic's lien, and they're going to probably seize the vehicle. So don't put in a fake mechanics lien. What you want to do is get a bonded title.
Another thing you can do is get a court order title, and this article goes on to talk about it. There might be another way, by getting a judgment of ownership. They might ask the applicant to make some efforts to contact the owner, and you have to file it with the court in the county where you reside. If you file a claim of ownership with the court and an affidavit, the court can give you a judgment. You bring that to the DMV to get a title. You can do that without getting a surety bond. So get more information on both the surety bond and a court order title; those are definitely good ways to go. They're much better than even the Vermont loophole that people do all the time because Vermont's going to charge you big-time sales tax. We'll talk about that in another video, but check out bonded title and court order title as options to solve your problem.