Do I Need a License to Buy a Car?

Do I Need a License to Buy a Car?

No, you don't need a driver's license to buy a car. However, you can't drive your new ride home without a license, so you'll need to have the vehicle delivered or get someone else to drive it. If you have a learner's permit, you can drive the car home with a qualifying licensed driver as a passenger; check your state's laws for specifics.

If you're planning to get an auto loan through the dealership, you don't technically need a driver's license to do so, but you will need another acceptable form of identification. Government-issued photo identification such as a state photo ID, passport or military ID card can generally substitute for a driver's license, but you should check with the dealership first.

Depending on state laws, you may need a driver's license to register your new vehicle. Dealerships typically handle registration and vehicle licensing for you. Before visiting the dealership, check with your state's department of motor vehicles to see if another form of photo identification can be used instead.

Learn more: How to Get a Car Loan

When Would You Need to Buy a Car Without a License?

There are several reasons you might want to buy a car even without a driver's license.

• You're buying the car as a gift for someone else.
• You're still learning to drive and haven't qualified for a full license.
• You plan to hire someone to drive you around.
• You're buying a car for a teenager who can't legally get a loan for the vehicle.
• You're disabled and are purchasing a vehicle your caregiver can use to transport you or do your errands.
• You want to buy a collectible car that you don't plan to drive.
• You're a business owner purchasing a vehicle for your employees to drive.

Whatever your reason for buying a vehicle without a license, it's important to understand the hurdles you may come across.

Can I Get Insurance Without a License?

You generally need auto insurance in order to buy a car, but getting insurance without a license can be challenging. Insurance companies typically consider unlicensed drivers to be riskier than licensed drivers. They may charge you higher rates or deny you coverage altogether.

Here are some options for getting car insurance without a license:

• Work with an independent insurance agent. Professionals who know which companies insure unlicensed car owners can save you time by gathering quotes from multiple providers.
• Purchase the vehicle with a co-owner who has (or can apply for) car insurance.
• Buy insurance naming a licensed driver in your household as the primary driver of the vehicle.

Any of these methods can help overcome the problem of getting car insurance.

Learn more: Why You Need Car Insurance Before Buying a Car

Can I Register a Car Without a License?

Depending on your state's laws, you may need a driver's license to register your new vehicle. Dealerships typically handle registration and vehicle licensing for you. Before heading to the dealership, check with your state's department of motor vehicles to see if you can use another form of photo ID.

Tip: Another option is to have a licensed driver as a co-owner. The co-owner can purchase the vehicle with you and register it using their driver's license.

How to Buy a Car Without a License

Generally, buying a car without a license is the same as buying one with a license—you'll just need a few workarounds. Here's what to do.

1. Set a budget. Based on your income and expenses, determine how much car you can afford. Try to keep your total monthly transportation costs, including car payment, maintenance, gas and insurance, no higher than 10% to 15% of your take-home pay.
2. Choose a car. Based on your budget, needs and plans for the car, research different vehicles and prices. If the car you want is out of your price range, consider a used model.
3. Save for a down payment. Making a down payment of at least 20% on a new car and at least 10% on a used car can help you qualify for a lower interest rate on your loan and reduce your monthly payment.
4. Get preapproved for an auto loan. It may take some time to find lenders who'll work with an unlicensed car owner, but preapproval can give you more negotiating power at the dealership. If you plan to co-own the vehicle with someone else, applying as co-borrowers could help you qualify for better loan terms or a larger amount.
5. Decide on financing. See if the dealership can match or beat your preapproved terms. Bring your alternate photo ID to the dealership; you'll need it if you decide to accept their loan offer.
6. Have insurance in place. You'll need car insurance before taking your new car home. An independent insurance agent can help you find a provider that insures unlicensed car owners. You can also choose a licensed driver with insurance as the vehicle's co-owner or list a licensed driver in your household as the primary driver on the insurance policy.

Learn more: Step-by-Step Checklist for Buying a New Car

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

There are other ways to get around besides buying a car without a driver's license.

• Use rideshare services. If you only need occasional transportation, consider using a rideshare service like Uber or Lyft.
• Take public transportation. Depending on public transportation options in your city, this could be a much cheaper alternative to buying a car. However, public transportation isn't always available or practical if you live in a rural or suburban area.
• Ride a bicycle. If you're traveling relatively short distances, a bike can be another way to get to where you need to go.
• Get a driver's license. You're legally required to have a driver's license to drive your car at all. Even if you don't plan to drive, getting your license can make it easier to buy the car, get an auto loan and get car insurance.

Depending on your situation and available options, one or more of these methods may work for you.

Learn more: How to Save on Commuting Costs

Frequently Asked Questions

License to Save

You can buy a car without a driver's license, but having a license can make things easier. So can having good credit, which is generally defined as a FICO^® Score^☉ of 670 or more. You can check your Experian credit report and FICO^® Score for free to see where you stand.

If you don't need a car right away, take steps to improve your credit score before you start shopping. Simple actions like paying bills on time, paying down your credit card balances and catching up on late payments could help you qualify for a lower interest loan, which could mean significant savings on your new car.