Why is getting a Surety Bond difficult?
Surety bond programs have been on the rise. More Surety Companies are writing low risk bonds for clients that have qualification issues. A few months ago if you had credit issues and you needed a defective Title Surety Bond you where subject to high rates and possible collateral. Now surety companies are taking on a common sense approach.
What’s the catch?
One problem you may still face is minimum premiums. The majority of Lost title Bond amounts are under a $1,000, the cost for the bond may be anywhere from $150 to $250, but if you consider that the only other option was 100% collateral it’s well worth it. If you post 100% collateral for your surety bond the state may retain your collateral up to the statue of limitations. Do you really want to tie up your money with the state; when you may only have the vehicle for a few months? How long do you think a cheap used car for a $1,000, will last?
What is a defective title bond?
A defective title bond is a required by the dmv to register a trailer or vehicle in your name when the original title cannot be procured. Applying for a surety bond is similar to apply for a loan the surety reviews your financial standing to determine surety credit. If you have a claim on your surety bond the surety will reimburse the obligee and then you must pay the surety back for the loss. A defective tile bond can also be referred to as a lost tile bond.
Defective title bonds are usually written for a four year term. Bond amounts are 1.5 to 2 times the value of the vehicle, its different for each State, so always check with your local DMV.