Level 1 Inspections for Bonded Titles

Level 1 Inspections for Bonded Titles

The bonded title process is required when an applicant cannot prove ownership of the vehicle or mobile home, or when the Motor Vehicle Division is not satisfied that there are no unpaid lien(s), as a condition of issuing a title. The Motor Vehicle Division will require the customer to file a surety bond at the time of final application.

The bond process protects the state of Arizona from lawsuits by prior owner(s) and/or lienholder(s). This procedure will require an applicant to do many things before the title process can be completed, and a title is issued.

Our customer service representitives will provide customers seeking a bonded title with a Bond Title Requirement Form (#40-1001), so that the customer understands exactly what is required to obtain a bonded title.

Some common reasons for obtaining a bonded title are:

  • •  The title was lost or stolen prior to the purchaser taking title, and the owner cannot be located.
  • •  The title was not properly notarized, and the owner cannot be located.
  • •  The vehicle was purchased without a title, and the applicant has no ownership documents.
  • •  The vehicle was registered in Arizona as an ARO, and the owner cannot obtain a title from the foreign state or the out-of-state title is lost and a duplicate title cannot be obtained.
  • •  The customer has built or purchased a homemade trailer with an average retail value of $1000 or more, but does not have the required receipts or notarized bill(s) of sale for the materials that were used to build the trailer.
  • •  The customer is attempting to title a reconstructed or specially constructed vehicle, but does not have a dismantle permit or title, or notarized bill(s) of sale listing the dismantle permit or title number for the major component parts.
  • •  The customer does not have a lien clearance and the lienholder cannot be located.

 

There are some cases in which the bonded title process cannot be used. The following are some of the reasons why a bonded title application may not be able to be processed:

  • •  Legal acts or waiting court orders from other states (i.e. divorces, probate, reposessions, etc.).
  • •  Lien sales.
  • •  Vehicles sold by a licensed Arizona dealer.
  • •  The purchaser needs to have a Level I inspection and submit document to the Motor Vehicle Division Dealer Service Department. A dealer complaint will have to be filed.

 

When it has been determined that the bonded title process is applicable to your scenario, the following steps must be completed, and/or information furnished to EZ Title  by the customer:

  • •  Customer must complete a Bond Title Affidavit Form (#48-1302)
  • •  Customer must purchase an MVR to verify the name and address
  • •  Customer must obtain a Level I Physical Inspection. Ayala Motor Vehicle Services will contact NCIC/ACIC to determine whether the vehicle or mobile home is stolen.
  • •  If the bonded title transaction cannot be completed on the same day, a second stolen vehicle inquiry is required, prior to completing the title transaction.
  • •  Customer is required to send a return receipt requested certified letter to all owners, lienholders, or anyone listed on the Bond Affidavit who was involved with the sale of the vehicle.
    • •  The certified letters should request the required documentation (i.e. title, lien clearance, power of attorney, statement refusing to apply for a title, etc.)
    • •  When a lien clearance is required and the certified letter is accepted by the lienholder, but the lienholder does not respond, the customer cannot proceed with the bonded title process, and must pursue a judicial remedy.

 

If, at any time during the bond process, the customer is able to obtain the proper documents to complete the title transfer, the bond process stops, and normal titling process resumes. For example, if the customer sends a certified letter to the previous owner, and requests the title or a power of attorney, and the previous owner send the customer a power of attorney, the customer can then apply for a duplicate title and sign off the title to complete a regular title transfer. The bond process is no longer required, and would stop.

Once the customer has completed all of the requirements, they will return with all of the transaction related documents:

  • •  Vehicle Inspection
  • •  Bonded Title Affidavit
    •  Bonded Title Requirements Form (#40-1001)
  • •  Results of the certified letters
  • •  When the customer receives the return receipt card from the certified letter, the customer must wait 15 business days after the card was signed before returning to the MVD office or Authorized Third Party location to proceed.
  • •  When the certified letter is returned as unclaimed, the 15-business day waiting period is waived, but the customer must submit the unopened certified letter as evidence of this.

 

Our customer service representitives will review all of the documentation the customer returns with, to determine if the bonded title process can be completed. Once it has been determined that the process can be completed, the customer service representitive will inform the customer of the bond amount required. The customer will then need to contact an insurance company (i.e. OPUS Insurance Service) to purchase a surety bond for the amount being requested.

  • The surety bond shall be in an amount equal to one and one-half times the average retail value of the vehicle or mobile home, as determined. The following references may be used to determine the average retail value of a vehicle or mobile home:
    • •  National Automobile Dealers Association (NADA) Official Used Car Guide
    • •  National Automobile Dealers Association (NADA) Vehicle Appraisal Guide
    • •  Manheim’s Gold Book Cars of Particular Interest Vehicle (CPI Book)
    • •  Factory List Price Guilde Book Trucks/Trailers
    • •  Truck Blue Book
    • •  Arizona Department of Revenue Personal Property Manual, Mobile Home Valuation Table

 

The customer must apply for a title within 30 business days after acquiring the surety bond, or the customer shall pay an additional title penalty fee.

All other normal title and registration requirements apply.

Note thtat for a mobile home, verification is also required that the mobile home is not affixed, and that no taxes are owed, if there is no record on the MVD’s database. If the mobile home is affixed, customer must also follow procedures to reactivate a title, when it is no longer affixed.