How to Cancel Motor Vehicle Title Bonds

Vehicle title bonds protect purchasers of cars with title problems.
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Vehicle title bonds reduce a purchaser's risk when an automobile is bought with a missing or lost title. These bonds are only temporary, with a maximum duration of three years. If the vehicle is sold or scrapped before the three-year period expires, you must complete some paperwork to cancel both the title and the bond. You must cancel the title with your local motor vehicle department before you can cancel the bond that backs it.

Step 1

Obtain a title cancellation form from the Department of Motor Vehicles or equivalent agency in your area. In some areas, cancellation may be included as an option on the title change form rather than listed on a separate form.

Step 2

Complete all of the fields on the title cancellation or change form. Include the reason you wish to cancel the vehicle's title. In most cases, the title is cancelled only when the vehicle is destroyed or scrapped.

Step 3

Contact your surety bond company once you have received the title cancellation from the Department of Motor Vehicles. This will allow the surety company to cancel the bond that was attached to the vehicle's title.

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