In the United States, you need a valid driver's license to operate a vehicle on the roads. However, do you actually need a license to purchase a vehicle? Well, the simple answer is no, you don't. You might think the car buying process is pointless for unlicensed drivers, but there are a couple of different reasons someone would do this.
Maybe you don't have a license, but you'd like to buy a vehicle for one of your family members who is a licensed driver, or perhaps you're a business owner who wants to keep ownership of the vehicles used at work. Other scenarios could include purchasing a vehicle for a chauffeur or a caregiver to use, or buying a collectible car for a hobby or restoration purposes.
Even though you can buy, it doesn't exactly mean it's the easiest process, so let's check out what this would really entail.
First things first, you'll still need an identification card. A government-issued photo ID is required to get a car loan, auto insurance coverage, and vehicle registration for public roads. If you don't have this, you won't make it very far in the process. To get one, you'll have to make a trip to your local Department of Motor Vehicles.
Once at the DMV, you'll likely need to provide your social security card, proof of residency, and additional proof of identification, but specific requirements will vary, depending on your state of residence.
Next, you'll need to figure out how to get a car insurance policy. Since you don't have a license number, these agencies can't look into your driving record, which causes issues. Many insurance companies won't offer coverage if you're not the primary driver, so you'll need to find someone who can take that place.
Keep in mind that insurers will base their rate off of that primary driver's previous driving record, credit score, and how many miles are going to be driven. So, if you want a good rate, use someone with a good driving history. If you go this route, you will usually be added to the policy as an excluded driver.
Financing Without a Driver's License
After getting insurance squared away, you'll need to think about where you're going to get an auto loan. In order to obtain a loan, you'll need to show proof of insurance. Obviously, the most ideal scenario for someone without a license would be to buy a used car outright in cash, rather than a new car. But, very few people will have the money for the car they want upfront, especially if it's a new vehicle. Again, it's not uncommon for lenders to avoid loans to unlicensed drivers, but there are many others who are willing to take on the risk.
Major banks may not always be the best option, as they tend to do things strictly by the books, but you may have more luck with a credit union. These credit unions are known for working with people more, and they may even get you a cheaper rate than you might think. Another route you can take is trying to get a personal loan. Either way, you'll have to do a little browsing to find what you're looking for.
Purchasing and Registration at a Dealership
Now that you've got insurance and financing taken care of, you can head to the dealership and go check out your potential new ride. Another downside you're going to experience with not having a license is not having the ability to test drive the car. Not all that shockingly, dealers will not allow it if you're not legally able to drive.
If you're able to, it would be beneficial to bring someone else along with you that can test drive, so that you can ride along and see if everything is up to par from the passenger seat. As far as registration goes, considering you still want to purchase, you'll have some more barriers. If you're purchasing for a business, you can register it under the business' name instead of your own.
If you're buying the vehicle as a gift, the primary driver will need to register the vehicle in their name, even if you were the one who paid. This does technically make them the new owner, so I wouldn't do this unless you really trust that person. If you happen to be purchasing a collectible car, you may not even have to register at all. Many collectible cars are considered historic or classic cars, which gives them different, or more lenient, requirements.
So, there it is. Can a prospective car buyer successfully purchase a vehicle without a license? Yes, but it's certainly a lot of hassle. In many cases, you have to pass off ownership on paper in one way or another just to get it legal for the roads. There are many unique situations that wouldn't allow an individual to get a license, but I assure you that if you're capable of it, it's much easier to just go and get one before starting the buying process.
This post was originally published on January 18, 2021.