Michigan Vehicle Title Bond for Business Entities ($50,000 and Under)

If your business needs to register a vehicle in Michigan but lacks sufficient proof of ownership—such as a lost, defective, or missing title—you may be required to obtain a Michigan Vehicle Title Bond. This bond ensures that prior owners, lienholders, and future buyers are protected against potential title disputes or ownership claims.

In my experience, many businesses—especially auto dealerships, fleet owners, towing companies, and repair shops—encounter this requirement when purchasing or handling vehicles without a clear title. If you find yourself in this situation, this guide will help you understand what a Michigan Vehicle Title Bond is, why it’s required, how much it costs, and how to obtain one efficiently.

What Is a Michigan Vehicle Title Bond?

A Michigan Vehicle Title Bond is a type of surety bond required by the Michigan Department of State when a business applies for a vehicle title but cannot provide proper ownership documentation. This bond acts as a financial safeguard, ensuring that:

✔ The vehicle’s ownership is verified before issuing a title
✔ Any prior owners or lienholders are compensated if a title dispute arises
✔ The business applying for the bond takes full responsibility for the title request

If a valid claim is filed against the bond (e.g., a previous owner proves the vehicle was stolen or a lienholder was overlooked), the surety company may pay damages up to the bond amount, and the business must reimburse the surety for the amount paid.

Who Needs a Michigan Vehicle Title Bond?

Your business may need a Michigan Vehicle Title Bond if:

✅ You purchased a vehicle without receiving a properly assigned title
✅ The original vehicle title is lost, stolen, or damaged beyond recognition
✅ The vehicle was acquired through a repossession, auction, or lien sale without proper documentation
✅ Your business repairs or stores vehicles and is claiming ownership after non-payment of services
✅ Your company purchases vehicles in bulk but lacks proper title records for some units

Common Business Types That Need a Vehicle Title Bond

🚗 Auto Dealerships – Selling used vehicles without a clear title
🚛 Fleet Owners & Transportation Companies – Registering commercial vehicles with missing ownership records
🏗 Towing & Impound Companies – Seeking titles for abandoned or unclaimed vehicles
🛠 Auto Repair Shops & Mechanics – Claiming vehicles left unpaid after repairs
🔧 Salvage & Rebuild Title Processors – Requesting a title for rebuilt or salvaged vehicles

When Is a Vehicle Title Bond Required in Michigan?

Not all vehicles require a title bond. The Michigan Department of State (MDOS) requires a Vehicle Uniform Surety Bond only when:

📌 The vehicle value is over $2,500
📌 The vehicle is less than 10 years old
📌 There is no verifiable proof of ownership (e.g., missing, altered, or improperly assigned titles)

If your business is trying to register a low-value vehicle (under $2,500) or a vehicle older than 10 years, a bond may not be required. Always check with MDOS before applying.

How Much Does a Michigan Vehicle Title Bond Cost?

The bond amount required is twice the appraised value of the vehicle.

Bond Amount Calculation Example

📌 If the vehicle is valued at $10,000, the required bond amount will be $20,000
📌 If the vehicle is valued at $25,000, the required bond amount will be $50,000

Bond Premium (What You Pay)

Rather than paying the full bond amount, businesses only pay a bond premium, which is a small percentage of the total bond amount.

💰 Typical Premium Rates:
📌 With good credit (700+ score): 1% - 2% of the bond amount
📌 With fair credit (650-699 score): 2% - 4% of the bond amount
📌 With poor credit (below 650): 4% - 10% of the bond amount

Example Bond Premium Costs

• For a $20,000 bond:
  
  

  • Good credit: $200 - $400 per year

  • Fair credit: $400 - $800 per year

  • Poor credit: $800 - $2,000 per year

• For a $50,000 bond:
  
  

  • Good credit: $500 - $1,000 per year

  • Fair credit: $1,000 - $2,000 per year

  • Poor credit: $2,000 - $5,000 per year

💡 Tip: Businesses with strong credit and no bond claims history typically qualify for lower bond rates. If credit is a concern, working with a surety provider that specializes in business bonds can help reduce costs.

How to Obtain a Michigan Vehicle Title Bond for Business Entities

The process for obtaining a Vehicle Title Bond is quick and straightforward:

1️⃣ Determine the Vehicle’s Value – You will need an official appraisal or valuation from a licensed dealer or state agency.
2️⃣ Check Bond Requirements – Verify with MDOS that a bond is required for your vehicle.
3️⃣ Apply for the Bond – Submit a bond application with details about your business and vehicle.
4️⃣ Receive a Quote – Your bond premium will depend on credit score, financial stability, and bond amount required.
5️⃣ Pay for the Bond – Once approved, pay the bond premium to activate coverage.
6️⃣ File the Bond with MDOS – Submit the Vehicle Uniform Surety Bond (Form TR-121) along with your title application.

Most bonds are issued within 24 hours, helping businesses avoid delays in vehicle registration.

What Happens If a Claim Is Filed Against Your Bond?

If a prior owner, lienholder, or another party has a valid ownership claim to the vehicle, they can file a claim against your bond.

Common Reasons for Bond Claims:

🚨 A previous owner proves the vehicle was wrongfully titled
🚨 A lienholder claims an outstanding loan or debt on the vehicle
🚨 Fraudulent documentation is discovered after the title was issued

If a claim is validated, the surety company may pay the claim amount (up to the bond limit). However, the business is legally responsible for reimbursing the surety for any amounts paid.

To avoid bond claims, businesses should:
✔ Ensure all available documentation is accurate
✔ Confirm no outstanding liens or disputes exist
✔ Obtain a detailed vehicle history report before applying for the bond

Why Choose Axcess Surety for Your Michigan Vehicle Title Bond?

At Axcess Surety, we specialize in helping businesses secure the bonds they need—fast and at the best rates available.

✔ Fast Approvals – Most bonds issued in 24 hours
✔ Competitive Pricing – Affordable options, even for businesses with credit challenges
✔ Expert Support – We understand Michigan’s title bonding requirements
✔ Easy Online Application – Apply in minutes from anywhere

Get Your Michigan Vehicle Title Bond Today!

Need a Michigan Vehicle Title Bond for your business? We make it fast, easy, and affordable.

🔗 Apply Now or call us today to get started!