Defective Title Bond A defective title bond is required by the state and the Department of Motor Vehicles for individuals who attempt to register a vehicle that has a lost or defective title. It is also referred to as a lost title surety bond. A defective title bond is needed when a person purchases a vehicle from a seller with a bill of sale but fails to receive a properly endorsed vehicle title, without which the state cannot transfer the title or accept the bill of sale. Requiring the buyer to post a defective title bond is the only recourse to licensing the vehicle in the buyer’s name. It also guarantees damages up to the bond limit for the legitimate titleholder if they make a valid claim to the vehicle.