Do you need a driver’s license to buy a car?

Do you need a driver’s license to buy a car? Legally there are no barriers to purchasing an automobile, even if you are unlicensed, provided you are able to either pay cash or qualify for financing. There are also a number of legitimate reasons why a person may wish to buy a car, even if they cannot legally operate it. 

However, a vehicle buyer without a license to drive can face other obstacles, such as securing a loan and obtaining enough insurance for your car. These problems are not insurmountable, and largely depend on why you are making the purchase and what you plan to do with the vehicle. Here is a guide for unlicensed individuals wishing to buy a car.

Buying a Car Without a Driver’s License

Any competent individual of legal age who is able to afford the purchase price and can find a willing seller can buy an automobile, regardless of whether or not they actually have a license to operate it. However, depending on the reason for the purchase, you will be limited as to what you can do with it as an unlicensed person. 

Obviously, you will not be able to operate the vehicle on public streets and roads without risking a ticket for driving without a license. Furthermore, you may face additional obstacles, such as securing financing if you are unable to pay cash or even getting insurance coverage. You may also run up against a serious problem when you attempt to register your car with your state’s department of motor vehicles. (For more information, read our “Can I get car insurance without a license?“).

Before going into the difficulties of making a car purchase when you don’t have a license, let’s look at some individual situations why a person who is not licensed to drive would buy an automobile.

• As a gift. Buying a car as a present for graduation, a wedding or other special occasion is not uncommon, and it does not require the buyer to be licensed to drive it. The recipient of the gift must be licensed, however, and the vehicle registered in their name.
• For a chauffeur.  You are essentially buying a tool for an employee so that they can perform the task of driving you around. This may be an actual chauffeur or a full- or part-time caregiver. All that matters is that they are licensed and insurable.
• For a business. As a business owner, you can buy as many cars, trucks, or other necessary vehicles as you need for your employees, regardless of whether or not you have a driver’s license. Vehicles used for a business much be covered by a commercial fleet insurance policy. 
• Collector cars. People who collect antique, vintage, and classic automobiles do not need a driver’s license to purchase them. Typically, insurers place tight restrictions on when and where collector cars can be driven.

Where can I buy a car without a license?

Any dealership or private individual can sell you a car, regardless of whether or not you have a license to drive it.  If you have cash in hand, buying a car without a license is a fairly straightforward transaction. You will need to have a valid, government-issued form of identification, but this does not necessarily need to be a driver’s license. A military ID or even a passport will do; many states also offer their own identification cards.

Barriers To Buying a Car Without a License

If you do not have a license to drive, finding someone willing to sell you a vehicle can be the least of your problems, especially if you need a car loan in order to make the purchase. There are other obstacles as well that involve insurance coverage and road taxes.

Getting Car Insurance

Obtaining car insurance without a license for their purchase is a major obstacle to unlicensed car buyers. It can be done, but keep in mind that an insurer requires a driver’s license in order to access a potential customer’s driving history. This said, there are a few insurance companies that will write policies for unlicensed car owners under special circumstances.

What is required is licensing information and a driving record for the person who will be the primary operator. Even if you are paying for the coverage, rates will be based on information regarding the person who actually drives the vehicle. As long as the car is in your name, you will be listed on the policy as an “excluded” driver or “non-driver” to whom coverage does not apply.

Registering Your Car

Every state and province requires that a vehicle be registered and taxed before it is driven on public roads and highways. Unfortunately, the law requires that anyone registering a vehicle in their own name have a valid driver’s license. The only way around this is to list the actual driver on the registration. This would make you at best a co-owner.

Getting Financing

Can you finance a car without a license? It’s not impossible, but finding a lender can be very challenging.  First of all, applying for a car loan requires a valid form of photo identification. Any form of state or federal government-issued identification can fulfill this requirement. However, there is a  catch, which is that most lenders will not approve car financing unless the buyer has a valid license to operate the vehicle. The reason is that lenders require that the buyer have car insurance, which an unlicensed driver does not have.

Even car dealerships that have their own in-house financing will offer a loan to someone with bad credit before someone without a driver’s license. This is because of the aforementioned registration laws and the fact that there will be a co-owner on the title. You could apply for financing from a third party, but again, that insurance requirement can present a serious barrier to car ownership.

Buying a Car Without a License: The Bottom Line

There are a number of legitimate reasons why a person without a license to drive would purchase a car. Just be aware that the system as it exists is designed to serve licensed drivers. Understand that without a license to operate the vehicle, you will be facing numerous obstacles.