You need a valid driver’s license before you can get behind the wheel of a car and drive. But does the same rule apply to buying a car?
Buying a car without a license presents a few unique hurdles, but that doesn’t mean it’s impossible. Continue reading to learn everything you need to know about buying a car without a license.
Can You Buy a Car Without a License?
The short answer—while it may seem counterintuitive to some—is yes. You can legally buy a car without a driver’s license. There are no laws in the United States that prohibit buying a car without a license.
However, there is no one-size-fits-all set of requirements when it comes to car-buying. You could have a relatively easy time—or a very challenging time—buying a car without a license.
Obstacles of Buying a Car Without a License
No matter your reason for buying a car without a license, it can be more complicated than doing so with a license.
Below are the biggest obstacles you can expect to encounter when buying a car without a license, as well as how to work around each issue.
The biggest hurdle you’ll face when buying a car without a license is the process of registration.
To be driven on public roads, a car must be DMV-registered to its legal owner, whose name is on the title. If you intend to maintain full ownership of the vehicle, this would be your name.
The caveat is that you need a valid driver’s license to register a car. You cannot register the vehicle in your name without a license, which can prevent you—albeit somewhat indirectly—from purchasing the vehicle for yourself.
This issue is only relevant if you want to maintain full ownership of the vehicle personally. It is not applicable if:
- You’re buying the car as a gift. The recipient will be the registered owner, so they must possess a driver’s license and insurance.
- You’re buying the car for your business. Your business entity will be the registered owner. All drivers must be licensed and insured.
- You’re buying the car as a collector’s item. A collectible car may not need registration if it never gets driven on public roads.
You can work around the issue of registration by buying the car with someone who has a valid driver’s license. As long as this person has a valid driver’s license, they can register the car in their name as title-holder.
The downside of this workaround is that the car will legally belong—either partially or entirely—to that other person. If you’re buying a car without a license and you want to maintain ownership, it’s best to co-own the vehicle with someone you trust, like a close family member.
As mentioned above, dealerships don’t always require a driver’s license to buy a car. You will need photo identification, but this can come in other forms.
However, the lack of a driver’s license may prevent you from financing a vehicle with a dealership.
This is because a valid driver’s license provides a dealership with some essential information:
- It proves you can legally own the car.
A car dealership usually helps a buyer through the registration process at purchase so that they can legally take their new car off the lot. And to register the vehicle in your name, you need a valid driver’s license.
Not having a license may prevent you from taking out an auto loan with the dealership because it shows that you can’t take full ownership of a new vehicle.
- It proves you are who you say you are.
You need to prove your identity to buy a car at a dealership, particularly if you want to finance the vehicle. Dealerships and lenders want to make sure you’re not taking out a loan in someone else’s name.
A valid license also helps the dealership locate the correct credit report when they check your financing eligibility and qualification.
Most dealerships will not offer in-house financing if you can’t present a valid driver’s license. However, you may be able to find a dealership that does.
It will be easier to receive financing if you’re buying the vehicle for your business and your company has a good credit report.
Alternatively, you can apply for financing from a third-party auto-loan servicer. Creditors will require you to have the proper insurance coverage for your vehicle in place before you take out a loan.
Gaining the proper insurance coverage for your vehicle is necessary before you can obtain financing and before the car can legally go on the road.
The problem is, most insurance providers require applicants to provide their name and license number on the application. This information allows the insurance provider to check your driving record and determine your eligibility.
You can usually overcome this obstacle if you’re buying the car for someone else and you know their full name and license number.
Many insurance companies are understanding when it comes to insuring a car without a license.
However, it’s essential to enter any insurance discussion equipped with information about who will be driving the car. The insurance provider will use the primary driver’s license information to determine your eligibility and rates, even if you’re the one paying the bill.
You may be added to the insurance policy as an “excluded driver,” which means you’re not insured to drive the car. If you obtain a license in the future and want to drive the car, you’ll have to notify the insurance company and make changes to your policy first.
Whether you’re buying a car new or used, a test drive is an essential part of the process. It allows you to make sure the vehicle is in good condition and that it’s what you’re looking for before you take it home. During a test drive, you may notice minor details that you would miss when sitting in the lot.
This problem is easily avoidable by bringing along a licensed driver to the lot. This can be the primary driver of the car, or someone else if the car is meant as a surprise gift.
Without a license, you may still be able to purchase a car. However, you won’t be able to get it home or to its primary driver. Many dealerships offer delivery services, but this can come at a cost.
Bring along the primary driver to drive the vehicle off the lot. Remember that this person needs to be the registered owner of the car, as well as insured to drive the vehicle.
If you’re buying the car as a gift, you can purchase the vehicle and then have the primary driver go and pick it up from the dealership after you surprise them with the keys or title paperwork.
How to Buy a Car Without a License
Step 1: Identify the Primary Driver
The first step is determining who will drive the car and who will legally own the vehicle. If the two are one and the same, this simplifies the car-buying, registration, and insurance process, even if you don’t have a license yourself.
Obtain the full name and driver’s license number of the primary driver if you plan on setting up and paying for the car insurance.
Step 2: Shop Insurance Providers
It is more difficult to insure a car when you don’t have a valid driver’s license. But if you start shopping insurance providers early on, you can avoid paying unnecessarily high rates.
Visit car-buying websites and talk to people you know about their insurance services to find one that provides car insurance to unlicensed buyers at a reasonable rate.
This step is high on the list because you’ll need the proper insurance coverage to obtain financing and to buy a car.
Step 3: Shop Dealerships or Private Sellers
You can simplify the process of buying a car without a license by shopping for the best dealership. Some dealerships specialize in selling cars to unlicensed buyers, while some may prohibit it entirely.
Watch out for car dealerships who sell cars to unlicensed buyers in exchange for significant price hikes. You don’t need to pay more for a vehicle just because you don’t possess a driver’s license.
You may also purchase a car from a private seller, which can allow you to complete registration later on.
Step 4: Obtain Financing or Cash
If you want to finance your purchase, you’ll need to find a dealership that offers financing to unlicensed car-buyers. Alternatively, you can take out an auto loan from a third-party servicer or pay for your purchase in cash.
Keep in mind that to obtain any type of financing for a car purchase, creditors will want to confirm that you have the proper insurance coverage for your car first.
Step 5: Bring a Licensed Driver with You
Whether you’re buying the car with a licensed driver as co-owner, or you’re planning to turn the title over to someone else entirely, you should bring along someone who has their license when you shop for or buy a car.
This allows you to take the car off the lot for a test drive to make sure it’s in good condition and exactly what you’re looking for. It also allows you to avoid unnecessary delivery fees to get the car home or to its destination.
Step 6: Complete Registration
If you bought the car in cash from a private seller, or you bought it as a gift from a dealership, you’ll need to complete the registration process. If you want to maintain partial ownership of the vehicle, this means putting your name and your co-owner’s name on the title and having the car registered in your co-owner’s name. If you bought the car as a gift, this means registering the car in the recipient’s name after their name is on the title.
Why Buy a Car Without a License?
There are many reasons why you might want to purchase a vehicle that you can’t personally drive.
Your reason for buying a car without a license will impact how difficult it is to achieve:
- For Business Purposes
Business owners often purchase vehicles for their employees to use. In this scenario, you would register the vehicle under your company’s name, which means you’re not necessarily required to have a license yourself.
You will have to make sure the correct insurance is in place before you use the car for business purposes.
If you buy the car from a dealership, a sales rep will walk you through the process of registering the car to your business entity.
- As a Gift
If you’re planning to surprise a family member, colleague, or friend with a brand new car, you can buy a vehicle for them without having your own license.
The registered owner and title-holder will be the recipient of the vehicle; your name will appear only on the bill of sale, so a license typically isn’t required. (Keep in mind that the recipient must have a valid license to register their new car.)
If you want to finance the gift vehicle, however, you will likely need to have the proper insurance in place beforehand, which may be challenging.
The dealership may offer to deliver the birthday gift, along with the vehicle’s title and registration forms, if you can’t get it home yourself.
- As a Collectible
Vintage and rare car collectors sometimes purchase vehicles that they never drive or have others drive.
If the car you’re buying isn’t meant for use on public roads at any point, it likely won’t require a license to purchase.
You may also be able to avoid the more complex hassles of insuring and registering your car without a license if you plan on it never leaving your driveway.
- For Your Personal Driver
Individuals with disabilities, or those who just prefer not to drive themselves, sometimes buy cars for their drivers to use. This is entirely legal, technically speaking.
However, it gets into more complicated territory if you want to maintain ownership of the vehicle and you don’t have a driver’s license.
The car-buying system is set up in a way that favors license-holders. Luckily, there are ways to overcome those obstacles when you’re buying a car without a license.
If you follow the tips listed above, you most likely don’t need a driver’s license to purchase a car. However, you should always check with your state’s DMV to make sure you understand local rules and regulations.
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown are for the College Ave Undergraduate Loan product and include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 5/18/2020. Variable interest rates may increase after consummation. Lowest advertised rates require selection of full principal and interest payments with the shortest available loan term.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.