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Do You Need a License in Order to Get a Car Loan?

Car Loan No LicenseYes, you do need a valid driver’s license to get an auto loan. Most lenders believe that a person who ends up being arrested for not having a valid license while driving will default on a loan for a car that may be now impounded or have wheel locks on it.

Having said that, there are exceptions to every rule. If there are multiple people within a household and one of them is licensed, the loan may go through for various reasons.

Reason 1

A minor child is wanting to borrow money for a car in anticipation of getting their driver’s license. In this case, a parent would have to be a cosigner on the loan, meaning that the primary borrower would be unlicensed, but the cosigner would have a valid license and insurance. Both of these conditions more fully guarantee that the loan will be repaid on time.

Reason 2

If a married couple is in need of an auto loan, but the spouse with the highest income and credit score does not drive, a lender may consider the loan in all of its other aspects and ignore the lack of a driver’s license for the primary borrower. Again, there is a licensed driver that will be operating the vehicle.

Reason 3

If your driver’s license is suspended, but will be reinstated in the very near future, a loan officer may choose to approve your loan application anyway. Your chances for approval would greatly increase if you waited to apply for the loan until your license has been reinstated, though.

About the Author

The author has many years of experience in automotive finance and insurance. However, each consumer's situation is unique. It is best to contact a finance specialist for further assistance.
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