Can I Buy a Car With Only a Permit

Home > Resources > Buying a Car Without a License

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.

Registration

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.

Solution:

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.

Financing

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.

Solution:

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.

Insurance

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.

Solution:

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.

Test Drive

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.

Solution:

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.

Delivery Costs

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.

Solution:

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.

Bottom Line

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.

Can I Buy a Car With Only a Permit

Source: https://www.studentdebtrelief.us/resources/buying-a-car-without-a-license/

Share this post