Buying a car without a license is possible, but you may run into registration and insurance issues once you’ve completed the transaction. Here’s what you need to know if you want to buy a car but don’t have a driver’s license.
Why Would You Need to Buy a Car Without a License?
You can’t legally operate a vehicle without a driver’s license, so why would you want to make a purchase? There are several reasons for this, among them:
- You’re purchasing the car as a gift for someone else.
- You’re still learning to drive and haven’t earned a full license.
- You hire a driver to take you around.
- You’re buying a car for a teen who can’t legally get a loan for it.
- You are disabled and require transportation for your caregiver.
- You want to buy a collectible car but don’t intend to drive it.
- You own a company and require a car for your employees to use.
Whatever your reason for purchasing a car, it’s critical to understand the potential stumbling blocks you may encounter along the way.
Is It Legal To Buy a Car Without a License?
There is no law in the United States that requires you to have a driver’s license in order to purchase a car. However, there are some aspects of the process before and after the purchase that may be difficult for someone who does not have a license.
If you don’t have a driver’s license, it can be difficult and expensive to obtain auto insurance for your vehicle. Traditional insurers may even refuse to cover you. If you can find coverage, you’ll almost certainly pay more because insurers typically consider unlicensed drivers to be riskier than licensed drivers.
Consider working with an independent insurance agent who can provide quotes from multiple insurers and may have a better understanding of which companies will insure unlicensed drivers.
Alternatively, you can add a co-borrower during the purchasing process, and they will be able to apply for car insurance coverage. Finally, you can appoint another licensed member of your household as the primary driver.
A driver’s license is not required to obtain an auto loan. However, if you do not have another form of photo identification, the lender may deny your application because you are unable to prove your identity.
Obtaining a state photo ID, which you can show to prospective lenders, is a simple solution to this problem.
Depending on where you live, you may be required to have a driver’s license in order to register the vehicle. You may be able to get by with another form of photo identification in some cases, but check the laws in your state before you begin the car-buying process.
Of course, if you live in a state where a driver’s license is required and have a licensed co-owner, they can use their license to register the vehicle.
How to Buy a Car Without a License
There are a few different ways to buy a car and do (basically) everything else that comes with car ownership without having a driver’s license. You have the following options:
- Designating someone who is licensed as a co-owner for insurance, financing, and registration purposes.
- On the insurance policy, name a licensed member of your household as the primary driver.
- Look for lenders who don’t require a license when looking for auto loans.
- Having a good credit history reduces other risks for the lender.
- Work with an insurance agent to find an insurer willing to work with unlicensed owners.
Alternatives to Buying a Car When You Don’t Have a License
There are numerous reasons why someone might not have a driver’s license. Here are some potential alternatives to purchasing that car, depending on your situation:
- Rideshare services: If you only need to get around on occasion, consider using a rideshare service such as Uber or Lyft to get to your destination.
- Public transportation: Depending on the state of public transportation in your city, this could be an excellent, as well as a less expensive, option. This option, however, may not be available if you live in a rural or suburban area.
- Bike: Riding a bicycle is another option for getting around.
- Get a license: If you intend to drive the car at all, you must have a driver’s license. Even if you don’t, getting your license can help you solve a lot of problems, especially if you can’t use any of the options listed above.
Maintain Good Credit to Maximize Savings
Establishing and maintaining good credit is essential for saving money on a car purchase. It will not only make it easier to qualify for a loan with a low-interest rate, but it will also result in a lower auto insurance rate in many states. Furthermore, maintaining good credit will help you get approved for low-interest loans for other purposes in the future.
It can take time to build credit, especially if you have derogatory marks on your credit reports. To begin, check your credit score to see where you stand. Also, obtain free a copy of your credit report to review any issues that may need to be addressed. There are numerous ways to improve credit, but some of the most effective include paying bills on time, catching up on past-due payments, and paying down credit card balances.