Section 24 of 38
Chapter 23: Bonds and Certifications
23.025 Motor Vehicle or Vessel Bond Alternatives
In lieu of submitting a bond for a vehicle or vessel, a Vehicle, Vessel, or Off-Highway Vehicle Title Deposit Agreement and Assignment (REG 5059) form may be submitted for each deposit with one of the following:(CCP §§995.710-995.770)
Lawful Money of the United States (Cash Deposit)
The cash deposit shall be:
- Maintained by DMV in an interest-bearing trust account.
- In the form of cash, cashier’s check, certified check, bank money order, traveler’s check, or personal check.
— A personal check is not valid until the check has cleared the bank.
If no proceedings are pending to enforce the liability of the account then, on demand, the state shall pay quarterly to the depositor any interest on the deposited amount when earned in accordance with the terms of the account.
The procedures below must be followed:
- Send all required documents to DMV headquarters.
- Send the receipt and REG 5059 to the Accounting Unit, Attn: Special Funds in DMV headquarters for safekeeping.
Bearer Bond or Bearer Note of the United States or the State of California
The bearer bond or note shall have a market value:
- Equal to, or in excess of, the amount that would be required to be secured by a bond issued by an admitted surety company.
- Agreed upon by stipulation of the principal and beneficiary or, if the bonds or notes are given in an action or proceeding and the principal and beneficiary are unable to agree, the market value shall be determined by a court order.
Additional bearer bond information can be found in CCP §995.720.
Certificate of Deposit
The certificates shall:
- Be payable to the State of California.
- Have a monetary amount not exceeding the federally insured amount issued by banks or savings associations that are:
— Authorized to do business in California.
— Insured by the Federal Deposit Insurance Corporation (FDIC). - Show the name and address of the financial firm holding the deposit and be endorsed (signed) by the firm.
- Show the effective date.
- Be for a term of three years or, when there is no provision for the term of the assignment, it must remain valid until surrendered by DMV (assignee).
Assignment as Security
An assignment as security can be a:
- Savings account.
- Investment certificate or share account.
- Certificate for funds or share accounts.
Savings Account
The savings account shall:
- Be assigned to DMV (assignee).
- Have a monetary amount not exceeding the federally insured amount, together with evidence of the deposit in the savings accounts with banks:
— Authorized to do business in California.
— Insured by the Federal Deposit Insurance Corporation (FDIC). - Be equal in value to the sum of money of the bond requested or the retail value of the vehicle/vessel in lieu of a bond, which allows them to earn interest on the security (deposit) during the time it is held.
- Be accompanied by the account passbook.
- Include the name of the person posting the assignment (assignor) and their signature.
Investment Certificate or Share Account
The investment certificate or share account shall:
- Be assigned to DMV.
- Have a monetary amount not exceeding the federally insured amount, issued by the saving associations:
— Authorized to do business in this state.
— Insured by the Federal Deposit Insurance Corporation (FDIC).
Certificate for Fund or Share Account
The certificate for funds or share account shall:
- Be assigned to DMV.
- Have a monetary amount not exceeding the federally insured amount, issued by the union, as defined in California Financial Code §14002, whose share deposits are guaranteed by one of the following:
— The National Credit Union Administration.
— Any other agency approved by the Department of Financial Institutions.
Additional Information
All deposits are to have a face value, or in the case of bearer bonds or notes, have a market value, equal to or in excess of the amount that would be secured by the surety bond.
The value of the vehicle or vessel is determined by one of the following:
- Vehicles– a written appraisal provided by a California or other state-licensed dealer or motor vehicle insurance representative.
- Vessels– a written appraisal provided by a California or other state-licensed yacht and shipbroker.
- A REG 256 giving the valuation based on information provided in a recognized industry motor vehicle valuation and pricing handbook, such as the Kelley Blue Book. The REG 256 must also include:
— The lowest and highest price variations added together and divided by two, to get the average price of the vehicle which shall be used as the fair market value of the vehicle.
Example: 1,000+2,000=3,000, 3,000÷2=1,500, Fair market value=$1,500.
— Any information required for the diligent effort.