Personal Finance

Can I Buy a Car Without a Driver’s License?

Buying a car without a license is possible, but you may run into some issues with registration and insurance once you've completed the purchase. If you're thinking about buying a vehicle and don't have a driver's license, here's what you need to know.

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 might you still want to move forward with a purchase? There are several reasons, including:

  • You're buying the car as a gift to someone else.
  • You're learning to drive and haven't yet qualified for a full license.
  • You hire someone to drive you around.
  • You're purchasing a car for a teenager who can't legally get a loan for the car.
  • You're disabled and need a vehicle for your caregiver.
  • You want to purchase a collectible car and don't plan to drive it.
  • You're a business owner and need a vehicle for your employees to drive.

Whatever your reason for purchasing a vehicle, it's important to understand the potential roadblocks you may run into during the process.

Can You Legally Buy a Car Without a License?

In the U.S., there is no law that requires you to have a driver's license to buy a car. However, there are aspects of the process before and after the purchase that could prove challenging to someone without a license.

Insurance

It can be challenging and expensive to get auto insurance for your vehicle if you don't have a driver's license. Traditional insurers may even refuse to offer you coverage. If you can find coverage, you'll likely pay more since insurers typically view unlicensed drivers as riskier than drivers with a license.

To save yourself some time, consider working with an independent insurance agent who can provide quotes from multiple insurers and may have a better knowledge of which companies will insure unlicensed car owners.

Alternatively, you can add a co-owner during the buying process, and they can apply for insurance coverage for the vehicle. Finally, you can name another person in your household who has a license as the primary driver.

Financing

You don't technically need a driver's license to get an auto loan. But if you don't have another form of photo identification, the lender may not approve your application because you can't prove your identity.

An easy fix for this obstacle is to get a state photo ID, which you can provide to prospective lenders.

Registration

Depending on where you live, you may need a driver's license to register the vehicle. In some cases, you can get by with another form of photo identification but double-check the laws in your state before you start the car-buying process.

Of course, if you live in a state where a driver's license is required, and you have a licensed co-owner, they can register the vehicle using their license.

How to Buy a Car Without a License

There are a few different ways you can buy a car and do (basically) everything else car ownership entails without having a driver's license. Your options include:

  • Naming someone who is licensed as the co-owner for the purposes of insurance, financing and registration.
  • Listing a licensed member of your household as the primary driver on the insurance policy.
  • Shopping around for auto loans to find lenders who don't require a license.
  • Having a strong credit history to eliminate other risks for the lender.
  • Work with an insurance agent who can help you find an insurer that will work with unlicensed owners.

Alternatives to Buying a Car When You Don't Have a License

There are many reasons someone may not have a driver's license. Depending on your situation, here are some potential alternatives to buying that car:

  • Rideshare services: If you just need to get around occasionally, consider using a rideshare service like Uber or Lyft to get to where you need to go.
  • Public transportation: Depending on the state of public transportation in your city, this could be an excellent option, not to mention a cheaper one. However, this alternative may not be possible if you live in a rural or suburban area.
  • Bike: Riding a bicycle can be another way to get to where you need to go.
  • Get a license: If you plan to drive the vehicle at all, you're legally required to have a driver's license. Even if you don't, getting your license can solve a lot of problems, especially if you can't take advantage of any of the options above.

Keep Your Credit in Good Shape to Maximize Savings

Establishing and maintaining good credit is key to saving money during the car-buying process. Not only will it make it easier to qualify for a loan with a favorable interest rate, but it can also lead to a lower auto insurance rate in many states. What's more, maintaining good credit will also help you get approved for affordable financing for other purposes in the future.

Building credit can take time, especially if you have negative items on your credit reports. Start by checking your credit score to see where you stand. Also, get a copy of your credit report to review areas you may need to address. There are many ways to improve credit, but some of the most impactful methods include paying your bills on time and getting caught up on past-due payments and paying down your credit card balances.