Here’s How I Got A Valid Title For A Car That No DMV Would Touch, For Just $100

One of the hardest rejections a car buyer can face is being told “no” at the Department of Motor Vehicles. Usually, this means that something horrible has happened, like the state has banned your Japanese Kei car, or you just tried to title and register a car that might not have had perfect paperwork. That’s what happened to me five years ago when I bought a 2012 Volkswagen Jetta SportWagen TDI and tried to register it. I’ve finally emerged triumphant with a clean and clear title after getting into this massive headache, and here’s how I did it.

Back in November 2020, I wrote a post titled “Here’s What A Two-Owner Volkswagen Jetta Sportwagen TDI Looks Like After 355,000 Miles.” If you want to read some classic Mercedes Streeter, this was one of the very first posts I had ever written for a prominent car website, and in a cool way, it shows how far I’ve come.

Anyway, this car was a big deal for me. I had been searching for the perfect German diesel wagon after deeply regretting selling my first Volkswagen, a 2005 Volkswagen Passat TDI wagon. I found this Jetta SportWagen for sale on Craigslist, and it checked all of my boxes. It was a one-owner car with piles of service records, both original keys, the original window sticker, functional emissions equipment, and a perfect interior. Sure, it had about 353,000 miles, but the first owner had clearly treated the car well. Seriously, I would later buy a 2010 Volkswagen Jetta SportWagen TDI, the same car, but with a manual transmission, and despite my 2012 having 130,000 more miles and a less desirable DSG transmission, it was significantly less worn out than the one with the manual.

The Forbidden Title

I had actually purchased the car around June that year, but I wasn’t hired on at Jalopnik until that October. But by that time, the car had already proven to be a thorn in my backside. When I bought the car, I never noticed that the seller signed the title on the wrong line.

When I tried turning the title into the Illinois DMV, I was swiftly declined. But, I knew that no two Illinois DMV locations are the same, so I started driving to different ones. My friends gave me stories about registering cars with sketchy titles at this hole in the wall DMV, or at that DMV in the middle of nowhere. I went to all of them, visiting over a half-dozen DMVs. Every single one of them had turned me away the second they saw the title.

One alternative is to go to a business called a Currency Exchange. Here in Illinois, you’d go to a store like this to cash checks, trade another nation’s currency for USD, or just for basic DMV services. A Currency Exchange can process title applications, and some of them have a bit of a reputation for being more lenient than the real DMV. After all, these businesses have a huge upcharge to do DMV work. Yet, not a single Currency Exchange wanted to touch this title, either.

This left me stumped. If the sketchiest of the sketchy places wouldn’t touch the title, what do I do? Back then, an officer at the Illinois SOS told me that I had only three real paths. I could contact the seller and have them get a duplicate title, or have them sign an affidavit and get it notarized, or go through the bonded title process. By this point, the Craigslist ad was long gone and I had no contact with the seller, so that was out.

The bonded title process is typically used by people who buy barn find motorcycles or cars that don’t have titles. The Illinois DMV told me that this process would involve getting a written appraisal of a car dealer and a mountain of paperwork that proves I have a right to the vehicle; then I would have to post a bond valued at 1.5 times the value of the vehicle. Suddenly, based on what the DMV told me, I was going to light a ton of time and money on fire just to register a cheap car that I had paid only $3,000 for.

Thankfully, I had found a safe harbor, sort of. Vermont was still very much “America’s DMV” back then. The state’s rules said that you could have license plates shipped out to you no matter where you lived in America, so long as you had basic proof that you owned the car. If your car was older than 15 years old, this proof was little more than a bill of sale and an online VIN check showing that it wasn’t stolen. If your car was younger than 15 years old, you needed an existing title, but the process was otherwise the same. Maybe I had lucked out or something, but while Vermont wasn’t willing to transfer the title, it did send me plates and a registration. That was good enough for me.

That was until 2023, when I decided to sell this car, and this put me into a pickle. I still had the original Wisconsin title that Illinois wouldn’t touch, and I had let the registration lapse a long time ago when the vehicle was in storage. Vermont had long closed its loophole by then, anyway. Even worse, I let an ex stay in my apartment while I was on vacation, and it looks like she used my title as a darned paper towel because it was thoroughly ruined and the title’s built-in fraud indicator had been activated.

Titling Companies Are Expensive

Now, there are other options out there. Residents of any state can register their car in Montana or South Dakota, so I looked into that. The catch with a Montana registration is that you need to start an LLC, which costs a pretty big chunk of change on its own, and then someone in my situation would need to go through the bonded title process of that state, so it wasn’t a real solution. South Dakota wouldn’t touch this title, either.

Then, I looked up companies that deal with situations like mine. The most famous one is Dirt Legal, which has this promise on its website: “Register or Title any Vehicle from any State. Guaranteed.” At the time, Dirt Legal said that it could get me a title for $2,000. What a deal. According to the Dirt Legal website, the title service for a situation like mine would now be $1,300, and all Dirt Legal would be doing is getting me a bonded Montana title.

I began to wonder why I would want to pay $1,300 just to get a bonded title from another state when I could just get a bonded title in Illinois?

That’s when I decided to just give the Illinois bonded title process a try. I figured that, in the worst case, I’d end up right back where I started. So, technically, I had nothing to lose and everything to gain.

Bonded Titles In Illinois

Illinois has a handy guide with instructions on getting a bonded title, and here’s what worked for me. You can also get the necessary documents from your local SOS office.

The how-to document that Illinois provides starts like this:

A bond is required when standard ownership documents (i.e., assigned title) cannot be surrendered with an Application for Certificate of Title (625 ILCS 5/3-109). The Secretary of State may, as a condition of issuing a Certificate of Title, require the applicant to file a bond in the amount equal to one and one-half times the current wholesale value of the vehicle. The filing of this bond will protect the Secretary of State’s office and any prior owner or lienholder as well as any subsequent purchasers, or person acquiring security interest or respective successors, against any expense, loss or damage due to the issuance of a Certificate of Title. The bond (and the deposit filed with a cash bond) must be returned at the expiration of three (3) calendar years from the date of filing, unless the Secretary of State has been notified pending any action to recover on the bond.

Definitions:

Cash Bond — A bond executed by the applicant for vehicle ownership and accompanied by the deposit of cash in the form of currency, cashier’s check, money order or bank certificate of deposit made payable to State Treasurer.

Surety Bond — A bond executed by the applicant for vehicle ownership and a person/firm authorized to conduct a surety business in Illinois, which obligates the guarantor to pay a third party upon default by the applicant in the performance of any duty the applicant owes to any third party.

Wholesale Value — The trade-in value of a vehicle or the value of a vehicle sold between licensed dealers and not at retail.

The Cash Bond was what scared me. Say that my car is assessed a value of $3,000. That means I’d have to pony up $4,500 in cash to the state before paying even more money in registration fees and taxes to title a car that I paid $3,000 for.

What interested me more was the Surety Bond. The idea here is that you’d pay an insurance company a small amount of money to issue you a bond. Should nobody come forward during the three-year time limit to try to claim your car, the insurance company keeps whatever cash you paid it, and you get to have a titled car without paying nearly as much as the Cash Bond. If you do default, the insurance company pays the duty and then comes after you for the money. If you’re in a situation like mine, where you have the legitimate title, but the title just doesn’t look good enough for the DMV, it’s basically pure profit for the insurance company.

You will find tons of Surety Bond companies online, and many of them will be happy to issue a bond for a low-value vehicle for only $100. That’s a heck of a lot less cash than $4,500.

Before I chose a surety website, I first needed to figure out how much my Volkswagen was worth. That’s where things got weird.

The bonded title fact sheet from Illinois gave two options for getting a vehicle appraisal:

A written appraisal of the current wholesale value of the vehicle from a licensed new or used vehicle dealer (including motorcycle, mobile home and trailer dealers), a licensed rebuilder (for salvage or junk vehicles only), a licensed real estate agent (for mobile homes only) or an officer of an antique vehicle club or association (for antique vehicles only). The appraisal also may be obtained from a used vehicle price guide, supported by copies of the front cover and pertinent pages of the guide, or printed from an online source. 

NOTE: If you are a licensed Illinois dealer, you cannot perform your own appraisal. Appraisals must come from disinterested, qualified parties.

The problem was when I checked online guides for the process, everyone took the first option and went to an appraiser. I wasn’t even sure where to go for this. I knew of some dealerships that could maybe do an appraisal. The other little nugget is that dealers don’t spend the time to appraise your car for free. When I called around, I got appraisal quotes as high as $400. Should you take this route, the appraiser needs to fill out the Affirmation of Appraisal form.

But what if I didn’t need to do that? The guide does say that using an online price guide is a valid option. Surely, it couldn’t that easy, right?

KBB Saves The Day

People who have gone through the process before had told me that it’s unlikely the state would take a generic printout from Kelley Blue Book over an actual appraised value. However, in my eyes, Illinois wouldn’t have included the option if it wasn’t valid.

So, I went to KBB and pulled what it believed to be my car’s value. Just to be safe, I chose the condition to be good, and chose the value that was right in the middle, as KBB displayed. That was $3,198. I then ran the Edmunds version of the same tool.

Once I got my number, I decided to pick a surety bond website. As I said, there are a million of these things, so I chose a popular website with decent ratings for car bonds. That was SuretyBonds.com. I got a bond for $4,797, which cost me just $100.

Now, it was time to just gather paperwork, fill out the necessary forms, and follow the rest of the steps. We’ll go one at a time. From Illinois:

Evidence of your right to acquire a title, such as a bill of sale, receipt or canceled check. If evidence of your ownership is not available, a notarized statement explaining how you came into possession of the vehicle is needed. 

NOTE: A bond cannot be used to obtain titles on abandoned vehicles, repossessions, mechanics liens or estates, or to remove a lienholder.

I satisfied the first step by having the valid, but ruined title. If you have just a bill of sale or even less than that, you’ll likely need to fill the Statement of Ownership form and have it notarized. To satisfy the second step, which is the appraisal portion that I quoted above, I printed out the numbers given to me by KBB and Edmunds.

The third step was a properly filled out Illinois Security Bond form and a Power of Attorney form, which I got already filled out in an email from SuretyBonds.com.

From here, the process is no different than trying to register any other car. I filled out the Illinois title application form, filled out the tax form, and then wrote two checks, one for taxes, and the other for title transfer. In this case, the DMV got a check for $165 for the title and the Illinois Department of Revenue got a check for $100. I decided not to pay the extra $151 for license plates just in case this whole thing blew up in my face.

From there, I just packed everything up, pinned them all together, and put them in a folder. I then put a cover letter in the folder explaining why I wanted a bonded title. I explained that I have a physical title, but it’s damaged to the point where no DMV would accept it.

Third Time’s The Time

Then came the waiting game, and I tell you what, there’s so much waiting. I sent the folder off in April. I didn’t hear back until June, when the state said it had accepted everything but my checks and the Surety Bond. Apparently, the bond needed to be stamped by a notary. Oops. Also, at first, I wrote a single check for $265, thinking the Illinois government would be capable of paying itself.

So, I had the bond notarized and then wrote the two checks I mentioned above. I didn’t hear from Illinois again until July, when it said I goofed up by not signing my checks. Alright, so I signed the checks and sent them out again.

Finally, just a week ago, Illinois cashed both checks and then sent me an email confirming that the bonded title process was a success and that the title was going to be shipped. The car is now officially mine.

Honestly, I was shocked it was so easy. Part of the reason I waited so long was because of Internet comments talking about how much of a nightmare the bonded title process is.

I also found a guide online from someone who got a bonded title for a moped. This person talked about having to get a physical appraisal, and also filling out the aforementioned statement of ownership and having it notarized. The guide also talked about having the vehicle inspected by a police officer.

A big part of why this was so easy was because I already had a title that was signed over to me. It was just damaged. I would imagine that if I had no documentation at all or just a bill of sale I probably would have had to jump through the extra hoops.

In the end, all this cost me was $100 more than what it would have cost me had the title not been damaged. That is a whole lot cheaper than doing the Montana trick or paying Dirt Legal $1,300. Illinois says that, despite the bond being on the title for three years, the car can still be sold.

I did all of this to make selling the car easier, but honestly, I might celebrate by actually driving the car. I am also considering writing a 50-state guide on how to fix title issues because I know I am not the only one. Until then, if you have a car with a sketchy title issue, look into your state’s bonded title process. It might be easier than you think!