New Mexico Lost Title Bond: A Comprehensive Guide

September 24, 2021

New Mexico Lost Title Bond

This guide provides information for insurance agents to help their customers obtain a New Mexico Lost Title Bond

At a Glance:

  • Average Cost: Minimum of $100 or 1.5% of the bond amount, whichever is greater
  • Bond Amount: Twice the vehicle’s value
  • Who Needs it: Vehicle title applicants in New Mexico who do not have adequate proof of ownership
  • Purpose: To ensure the rightful vehicle owner does not suffer financial harm if the title applicant does not actually own the vehicle
  • Who Regulates Lost Title Bonds In New Mexico: The New Mexico Division of Motor Vehicles

Background

New Mexico statute 66-3-24(C) requires residents who do not have adequate proof that they own their vehicle to purchase a surety bond prior to obtaining a duplicate title. The New Mexico legislature enacted the bonding requirement to ensure that the rightful vehicle owner will receive compensation if the title applicant does not actually own the vehicle. The bond will be active for three years from the date of issuance and must be in an amount equal to twice the vehicle’s value.

What is the Purpose of the New Mexico Lost Title Bond?

New Mexico requires residents to purchase a surety bond as part of the application process to obtain a bonded title. The bond ensures that the rightful vehicle owner will not suffer a financial loss if the title applicant is seeking to obtain the title fraudulently. If the title applicant is engaging in fraud, then the rightful vehicle owner can file a claim against the bond and receive compensation up to the full amount of the bond. In short, the bond acts as a safeguard against people attempting to obtain ownership of a vehicle through unethical means.

New Mexico Lost Title Bond Form

New Mexico Lost Title Bond Form

How Can an Insurance Agent Obtain a New Mexico Lost Title Bond?

BondExchange makes obtaining a New Mexico Lost Title Bond easy. Simply log in to your account and use our keyword search to find the “title” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

How is the Bond Amount Determined?

New Mexico statute 66-3-24(C) dictates that the bond amount must be twice the vehicle’s value as determined by the National Automobile Dealers Association (NADA). The NADA valuation will change based on the type of vehicle, as referenced below:

  • Average trade-in value for used cars and trucks
  • Clean trade-in/wholesale value for used motorcycles
  • Average retail value for classic, collectible, muscle cars
  • Good condition value for vintage motorcycles

The value of a mobile home can be determined from the assessed value found on a tax release.

Is a Credit Check Required for the New Mexico Lost Title Bond?

Surety companies will not conduct a credit check for bonds that are less than $25,000. At limits over $25,000, surety companies will review the applicant’s credit standing to determine qualification for the bond. For larger bond amounts, applicants with poor credit may be subject to a higher rate. Generally, most carriers want to understand how the applicant came to have ownership of the vehicle.

How Much Does the New Mexico Lost Title Bond Cost?

The New Mexico Lost Title Bond costs either $100 or 1.5% of the bond amount, whichever is greater (rates may vary for bonds greater than $25,000).

Who is Required to Purchase a Bond?

The New Mexico Division of Motor Vehicles requires title applicants to purchase a surety bond if the applicant cannot present the department with tangible proof that they own the vehicle and if the department does not have an ownership record of the vehicle. Lost title bonds are typically required for the following reasons:

  • The vehicle has never been titled
  • The applicant never received the title
  • The previous owner never titled the vehicle
  • The applicant has the title but there is an error in the title transfer
  • The applicant purchased an unclaimed/abandoned vehicle and is not a bonded agent

How do New Mexico Residents Apply for a Bonded Title?

To apply for a bonded title, New Mexico residents must complete the following steps:

Step 1 – Consult the MVD

Bonded title applicants in New Mexico should consult their local MVD office prior to purchasing a surety bond. New Mexico does not require all title applicants to obtain a bonded title, and usually only does so as an absolute last resort. Title applicants should ensure that they actually need a bond before purchasing one.

Step 2 – Purchase a Surety Bond

Once the MVD determines the applicant needs a bonded title, the applicant must purchase and maintain a surety bond in an amount equal to twice the vehicle’s value.

Step 3 – Have the Vehicle Inspected

New Mexico requires vehicles purchased out of state to be inspected prior to being registered and titled. The applicant must have their vehicle inspected by a certified VIN inspector. Most MVD offices conduct VIN inspections.

Step 4 – Complete the Application

All New Mexico bonded title applications must be mailed to the following address:

Motor Vehicle Division-Dealer Licensing Bureau
Attn: Surety Bonds
505 Marquette NW Suite 1501
Albuquerque NM 87102

Bonded title applicants must complete the application in its entirety, and submit the following items:

    • Affidavit of VIN form (obtained in Step 3)
    • Documentation obtained when the applicant purchased the vehicle (bill of sale)
    • Tax release (for mobile homes)
    • Proof of New Mexico residency

How Do New Mexico Bonded Title Applicants File Their Bond?

In New Mexico, bonded title applicants should mail the completed bond form, including the power of attorney, to the following address:

Motor Vehicle Division-Dealer Licensing Bureau
Attn: Surety Bonds
505 Marquette NW Suite 1501
Albuquerque NM 87102

The New Mexico Lost Title Surety Bond requires signatures from both the surety company that issues the bond and the bonded title applicant. The surety company should include the following information on the bond form:

  • The legal name entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Bond amount
  • Vehicle information
  • Date the bond is signed

What Are the Insurance Requirements for Bonded Title Applicants in New Mexico?

New Mexico requires all motor vehicle owners to purchase auto insurance with the following minimum limits:

  • $25,000 per person
  • $50,000 per accident
  • $10,000 property damage per accident

Bonded title applicants must purchase and maintain a surety bond in an amount equal to twice the vehicle’s value.

How Can New Mexico Residents Avoid Claims Against Their Lost Title Bond?

To avoid claims against their bond, bonded title applicants in New Mexico must ensure that they are the rightful owners of the motor vehicle.

What Other Insurance Products Can Agents Offer Bonded Title Applicants in New Mexico?

New Mexico requires all motor vehicle owners to purchase auto insurance. Bonds are our only business at BondExchange, so we do not issue other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

2021-10-15T20:09:43+00:00

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