I was recently asked by a friend who doesn’t have a driver’s license if he could purchase a car without one.
I wasn’t quite sure, so I decided to do some research.
So can you buy a car without a driver’s license?
In the United States, there is no legal requirement to have a driver’s license to purchase a vehicle. A dealership will typically require you to have some form of picture identification.
This could be a state identification card or a school identification card.
Keep in mind that without a driver’s license you will not be able to test drive the car or legally drive it off the lot.
Typically, not having a driver’s license will not prevent you from insuring the vehicle or getting the title in your name. Paying cash simplifies the process.
There are many reasons people may buy a car without a driver’s license to include:
- Disabled driver’s who purchase a car for their caregiver to drive, but they desire ownership.
- Business owners who purchase vehicles for employees to drive.
- People who buy a vehicle as a gift for another person.
- People who buy a car for a family member or friend that is too young or unable to buy themselves.
- Vehicle collectors that don’t drive.
- People who buy a car for a chauffeur to drive them around.
Many people think that they will not be able to finance a car without a license or get good interest rates, but this is not always the case.
Car Financing Without License
Although cash is the easiest way, it is possible to finance a car without a license with some dealerships and lenders.
Typically, dealerships will not provide in-house financing if you do not have a license. They prefer to see a valid license and address in case they need to repossess the vehicle or take other actions.
Dealers also will not allow you to test drive the car or drive it home under any circumstances because they could be potentially held liable for any accidents or other negative outcomes.
Some dealers are flexible and may finance you without a driver’s license if you have valid documents or other forms of identification to prove residence.
You may also need to have a good explanation or proof of why you need to buy without a license.
Typically, lenders aren’t as strict about financing you without a driver’s license.
This is especially true if you are using your bank or credit union because you have already established a relationship and trust with them.
If you get financing elsewhere, most dealers will relax their restrictions on you buying a vehicle from them without a license.
It is also important to note that buying without a license will not affect your interest rate or loan terms. Lenders will base this primarily on your credit report and income.
The lender is more concerned with if you can pay the loan back, not whether you have a license or your driving record.
They will require that you have specific insurance coverage to protect the vehicle.
This is where it can get a bit difficult. Most insurance companies will want to verify your license and driving record before insuring your vehicle. This is one of the main factors they use to determine your rates.
So it is best to make sure you can get insurance before buying a vehicle without a license.
Car Buying Tips
Budget
While you may have your mind set on your dream car, you won’t be able to buy or keep it unless the car fits within your budget.
The general rule is not to exceed 25% of your total monthly income on all of the vehicles in your home.
This amount should include, gas, maintenance, and insurance. There are numerous free online budget calculators to help you figure out your budget.
New, Used, or Lease
Certified pre-owned vehicles(CPO) are now becoming a popular option because they have low miles and offer many benefits of a new vehicle, minus the price.
Depending on your budget and needs, there is an abundance of affordable new cars on the market also.
There are plenty of quality non-certified used cars also if you look carefully. Leasing a vehicle is an option if you don’t want to own the vehicle.
This makes the choice of which type of car to buy very difficult. Although the initial price is cheaper, you will typically pay higher interest and have a shorter warranty for used or CPO vehicles compared to new ones.
Leasing a car is like paying rent, so you will never own the car and have to follow the terms to avoid expensive penalties.
A new car may cost more, but you get more in the way of lower interest rates, free maintenance, and roadside services.
Focus on a Few
It is important to narrow your search down to a few vehicles before visiting dealerships. This can be done by visiting dealer websites or reputable review sites. Start by looking for cars that have the features you desire.
Select a few cars that have everything you desire that are within your budget.
Aim for vehicles that are at least 5 percent below your total monthly budget. This will ensure that you have enough money for other vehicle-related costs.
Evaluate Ownership Costs
It is important to consider the total ownership costs of each vehicle on your shortlist.
Some websites can give you a basic idea of what it will cost to own a certain vehicle.
For improved accuracy, do your own specific calculations for insurance, fuel, and other car-related expenses.
Get quotes from insurance companies on each vehicle from your shortlist before purchasing.
Financing
It is best to secure an auto loan before your visit a dealership. If possible, get the loan with your bank or credit union because they will probably offer you the best deal.
Typically, dealerships receive a commission for every loan they close. So the bigger the loan, the more money they make.
Also, don’t disclose upfront to the dealer your auto loan pre-approval amount because they may try to sell you a car for as close to that amount as possible.
Dealer Financing
Dealerships are notorious for advertising plenty of appealing financing deals to lure you to their lots.
The fact is, the majority of consumers won’t qualify for these unbelievable deals.
Once on the lot, they will try to steer you towards rates that are higher based on your credit scores or other factors if you don’t have your own financing.
It is best to take advantage of the dealer cash rebates along with your own lender.
Invoice Price
It is important to know the invoice price of the vehicles on your list before visiting the dealerships.
The invoice prices you find online should be close to the sticker prices at the dealerships.
This is always the best price to start your negotiations. The price you negotiate should be before any discounts.
Remember the dealer has to make a profit, so they won’t go much lower than the sticker price.
Research Discounts in Advance
There are many possible discounts you can take advantage of to include, military, student, and being a member of certain organizations.
Do your research before visiting the dealerships.
Don’t assume the dealer will tell you about these discounts because they want to make as much money as possible.
Test Drive
It is best to contact the dealerships ahead of time to schedule a test drive.
This gives you a chance to establish a relationship with someone before visiting. This may make them less likely to try and take advantage of you.
You should take your time and thoroughly check everything in the car.
Especially items that are important to you. Ask questions about anything that you are unsure about. It is best to prepare specific questions about the vehicles you want before visiting the dealerships.
Smart Negotiations
Remember dealers are professionals and do this for a living, so you have to come to the dealerships well prepared. If you have a trade, negotiate the price of it separately from your new vehicle.
Make sure you research the value of your trade online before visiting the dealerships.
Unless its something you desire, decline the additional options that may be offered because they can dramatically increase the price of the vehicle.
If you do decide on some options, research them on your own to make sure you are getting the best deal.
Before signing the contract, make sure you read it thoroughly and ask questions about anything you are unsure about. The fine print should match your negotiations.
Related Questions
Are there no driver’s license car lots?
There are not necessarily car lots that cater specifically to people with no driver’s licenses, instead, there are car lots who are willing to work with people with a variety of special needs such as no license, a suspended license, bad credit, no credit, and repossessions etc.
Can you buy a car with a permit?
Basically, the same rules apply to an individual with a permit and a person who doesn’t have a license or permit.
The key difference is a person with a permit would be allowed to test drive or drive the car home with another licensed driver in the vehicle.
Can you get a car registered without a license?
Typically, you can register a car without a license with proof of insurance and photo identification.
The problem you may have is getting insurance without a license.
