• Buying Guides

Can You Buy a Car without a License?

By Michael O'Connor | August 25, 2022

Buying a new car is incredibly exciting and can open up a lot of new possibilities for you when it comes to getting around town or commuting to work. However, like with any big purchase, a new car comes with a lot of responsibility and a lot of things to work out. One of the things you may want to consider is whether or not your driver’s license is in good standing. While it is usually possible to buy a car without a license, it can open you up to some problems that will make the car buying experience much more difficult.

There are a lot of reasons why you may be thinking about purchasing a car without a license. No matter what, it is important to know the ins and outs of the process and what you may be up against as you start shopping around. By understanding what you need to do to purchase a car without a license, you can give yourself the best chance at success and get the car you have been dreaming of.

Reasons for Buying a Car Without a License

It may seem like there is no point in buying a car if you don’t have your driver’s license. However, the truth is that there are a lot of different circumstances where someone may need to make a vehicle purchase, even if they can’t drive that car. Knowing what these are can help you decide if you fit in one of these categories. If so, finding out about the process and what you will need to be prepared for is essential.

The Car is a Gift

Many times, an unlicensed person will buy a vehicle because that car is a gift for another person. Even if the purchaser doesn’t have their driver’s license, the recipient of the car most likely will, and this is a legitimate reason for a vehicle sale where the buyer isn’t licensed. Many times, this will happen if the buyer is older and doesn’t need to drive anymore but wants to purchase a car for a family member.

Another scenario where a car might be a gift from someone without a license is for a donation. Donations are tax-deductible and there are a myriad of charities looking for vehicle donations for their various causes. If you want to donate a vehicle to a cause you are passionate about, but you don’t have a license yourself, it is important to know how to go about it.

It is a Company Car

One of the most common reasons a person would want to buy a car without a license is when that car is for business purposes. While the business owner may not be a licensed driver, the people who will be driving for the company will have a valid driver’s license. In a situation like this, it is always best to make the purchase under the company name and list it as a business expense so banks and insurance companies understand the situation. This will make it much easier to cut through some of the red tape that can arise when trying to buy a new vehicle without a license.

The Lack of a License is Temporary

You may want to buy a new car at a time when your driving privileges have temporarily lapsed. This can happen if you have a suspended license or if you simply have let your license expire and haven’t renewed it because you haven’t needed it. It can take some time to get an appointment at the DMV for your new license and in the meantime, you may find a deal on a new car that is too good to pass up. In cases like this, it might be a good idea to wait until your license has been renewed before making the purchase so you don’t end up paying higher interest rates for your loan or have trouble at the dealership.

A Caregiver Will Be Driving the Car

In a situation where a patient is an unlicensed driver and is buying a new car for a caregiver, the process of buying the vehicle is a little more complex. If the patient wants to retain ownership of the vehicle, the caregiver will most likely have to be listed as the primary driver on the vehicle’s registration. When registering the car with the Department of Motor Vehicles, the caregiver will have to bring a photo identification as well as their driver’s license to be put on the car registration to drive on public roads. The patient will still be listed as the primary owner, even though they do not have a valid license.

It is a Piece of a Collection

In many cases, a person without a license will buy a car if it is a collector’s item and they are simply adding that vehicle to their collection. A collectible car will not usually be purchased through a lender since it is not going to be driven on the street and most car collectors will buy the vehicle outright with cash. If the car isn’t going to be driven, the whole process is much easier since you don’t have to deal with registering it or insuring it at the same levels as you would if it was going to be used for actual driving. Most of the time, it can be registered as non-operational and insured as a collector’s item instead of as a working vehicle.

The Buyer Has a Learner’s Permit

Sometimes, a person will want to buy a new or used car before they have their driver’s license. If you or someone in your family only has a learner’s permit but wants to have a car ready to go when they get their license, this is entirely possible. However, like with a lapsed driver’s license, it may be a better idea to wait until they have passed their test and gotten a valid license. This will make everything much easier and less expensive in the long run.

Registering a Car Without a License

The biggest challenge when it comes to buying a car without a license is registering it. When you purchase a car, you need to register it with the DMV before you can legally drive it on the street. To do this, you need to have the car title, proof of insurance, and, in many cases, a driver’s license to get the car registered in your name and new license plates. However, in most states, you have up to 30 days to register a new vehicle. If you are simply waiting for your driver’s license appointment at the DMV, you should be able to get it in time to meet the deadline.

In cases where you are purchasing the car for someone else and they have a valid driver’s license, they will become the titleholder, which means the car will be registered in that person’s name with their driver’s license number and photo ID and your portion of the car buying process is over. If you want to retain ownership of the vehicle, some states allow you to register as a co-owner and will let you put a lien on the car so it can not be sold without your permission. However, this can also open you up to legal issues if some sort of crime is committed with the vehicle or if it is involved in an accident. In cases like this, it is best to consult with a lawyer before making any decisions.

Getting Auto Insurance Without a License

Getting car insurance without a driver’s license is also a fairly big challenge. Since insurance coverage is meant to cover the driver as much as it covers the car itself, some providers may have an issue with covering a car that isn’t owned by a licensed driver. It could end up being much more difficult for you to find an insurance policy that will cover the car, which can, in turn, make it difficult to register the car.

Insurance companies base their rates and levels of coverage on things like how the car is used, the driving history of the owner, and the condition of the vehicle. Without a valid driver’s license, you may find that it is not easy to get the coverage you want. However, if you have a good credit score, you might be able to save some money on your insurance premiums. As long as you are willing to pay a little bit more than you would if you had a current license, you should be able to find a company that will cover your vehicle.

Getting an Auto Loan Without a License

You will not be able to get an auto loan if you don’t have proof of insurance for the car you are trying to buy. Because of this, you will want to make sure that you have all your insurance needs taken care of before you try making the actual purchase of the car. When it comes to getting a loan for a car without a driver’s license, you may run into some trouble. Most lenders will be wary of giving a loan to an unlicensed driver because if you are caught driving without a license, you may not be able to make the payments on the car. To avoid coming across this roadblock, be sure to have all your affairs in order and reasons as to why you are purchasing the car before you start shopping around for a loan.

Most big banks are not going to be willing to give you a car loan if you don’t have a valid driver’s license. In almost every case, it is going to be much easier to get a loan with a smaller bank or credit union. It is especially helpful if you are purchasing the car for your business and you have a business account with that bank. If they can get easy access to your credit report and your history is good, they may consider giving you the loan, even if you do not have your driver’s license.

Downsides of Buying a Car Without a License

No Test Drives

Perhaps the biggest downside of trying to buy a car without a license is the fact that you will not be able to test drive it. Whether you are buying the vehicle from a dealership or a private seller, not being able to get a feel for how the car drives and handles can be a big issue. However, if you are buying the car for your business or as a gift for someone else, this won’t be as much of a problem.

Limits Loan Options

No matter what, trying to get a loan for a vehicle without a driver’s license is going to be much more difficult than if you were licensed. Many lenders will be wary of the risk involved with a transaction like this and you may end up having to compromise or pay more in interest or a down payment. Because of this, it is incredibly important that you are as prepared as possible and have all your documentation to show that you will be able to make the payments.

Increased Insurance Rates

If you do not have your driver’s license, you will have to be prepared to pay more for insurance. Since insurance companies lean so heavily on your driving history when determining rates, they will charge you more if your history has gaps. Being ready to pay extra will help you make the right choice when shopping around for car insurance.

Red Tape

Overall, there is going to be much more red tape involved when trying to buy, register, and insure a vehicle if you don’t have your driver’s license. As long as you understand what the laws are in your area and what you need to do to make the process go smoothly, you should still be able to make the purchase. To be sure that you are prepared, consult with a lawyer before taking any of the steps and give yourself the best possible chance at getting a good deal on your vehicle sale.

Final Thoughts

Buying a car without a license is a difficult process, but with the right preparation, it can be done. Whether you are purchasing a car for your business, to add to a collection, or as a gift for someone else, it is a good idea to know what will be required of you and what you need to have ready as you go through the steps. By understanding what you will need, you can make your purchase and get a good deal on a new or used car, even if you aren’t going to be driving it.