No License, No Problem: How To Buy a Car With a Permit

You can buy a car with a permit, but you might have more difficulty with insuring and registering that car. Drivers with a permit can get insurance, but it's a lot cheaper to be on a parent or guardian's policy. Insurance is required to register a car, so when you buy a car with a permit, you will need to make sure you have it insured before you can register it.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Jan 26, 2022

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Things to Remember

  • You do not need a full license to buy a car
  • You do need insurance on your car in order to register it in most states
  • Permit holders can be covered on the insurance policy of a parent or guardian

You’re on your way to getting your license, and the car of your dreams comes up for sale. Do you need to wait, or can you buy a car with a permit?

The good news is that you don’t have to have a license to buy a car. Whether you are buying from a dealer or a private party, the only need for a license comes when you need to drive that car home. Beyond that, registering and getting insurance on your new car will also become an issue. You have to meet your state’s car insurance requirements. Confused? We’ll clear it all up right here.

From financing a car to getting it registered, we will cover all of the rules s you know exactly how to buy a car with a permit.

Of course, you will need to insure a car you buy with a permit, and we can help with that, too. Enter your ZIP code above for fast, free quotes from top companies.

Can you buy a car with a permit?

You’re not required to have a license in order to purchase a car. As long as you can pay for the car, you can buy it. However, there are plenty of issues you will run into when you buy a car with only a permit.

First, as permitted drivers can’t drive alone, you will need to have a licensed driver with you in order to get that car home. Second, a driver’s license is required to get insurance on a car, and you’ll need both in order to register it.

So, while the question of buying a car with a permit is simple, getting it on the road might not be. Let’s take a look at some of the issues.

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Do you need a license to buy a car from a dealership?

You don’t necessarily need a license to buy a car from a dealership. Technically, all the dealership requires is that you are able to pay for that car. To that end, it’s much easier to buy a car without a license if you are paying cash. But can you finance a car with a permit if you don’t have cash?

The rules on financing a car if you don’t have a license will vary. Some dealerships won’t provide in-house financing to unlicensed drivers, so you might have better luck looking at loans from banks and credit unions. Bear in mind that credit unions require you to be a member before giving you a loan, and banks have rules, as well.

In addition, most young people have very little credit on their record, which can be just as bad as having a poor credit record when it comes to getting a loan. It’s still possible to get a loan, but it will be costly.

That said, if you have a government-issued ID and can prove your ability to pay back the loan, you can probably finance a car without a license. It’s a good idea to have your financing lined up before you go to the dealership so that the purchase process will be simplified.

Can you register and insure a car with a permit?

Registering a car and getting insurance will require that you have a driver’s license. However, there are some ways to get around this, and the easiest is to have someone else register the car for you. You can both be listed as owners of the car, but without that licensed driver listed, you can’t get it registered at all.

It may be possible to register the car with just a permit in your state, but you will have to get insurance first.

Most new drivers with a permit will be covered under the insurance policy of a parent or guardian. That same parent or guardian can register the vehicle and list it on their policy to meet the legal requirements. It is possible to get learner’s permit insurance on a car on your own, but it’s more complex and usually also more expensive.

The registered owner of the vehicle needs to be on the insurance policy, so even if you get your own insurance, every person listed as an owner on the registration needs to be list on that policy.

Once you get your full license, you can transfer the ownership of the car into your name alone, and if you like, you can also get your own insurance. Again, it’s worth a look at the cost before you make that move.

How can you get affordable auto insurance with a permit?

Unfortunately, getting cheap car insurance with a permit is a lot harder than buying a car. That’s because permitted drivers are new drivers. They have little to no experience, and that means they’re a much higher risk for insurance companies.

In most cases, a driver with a permit is better off being insured on a parent’s or guardian’s policy. In fact, many insurance companies won’t even start charging for that permitted driver until they pass a road test and get a license, but the policy will still cover them. Bear in mind that the driver has to follow all of the rules that come with a permit in order to be covered.

For example, permitted drivers can only drive when there’s a licensed driver in the car. If they drive alone and get into an accident, the insurance company could deny the claim.

As soon as a permitted driver becomes licensed, they need to be added as a regular licensed driver on the policy. This is where things get expensive. Take a look at the average rates for teen drivers from top auto insurance companies.

Best Auto Insurance Companies: Average Annual Auto Insurance Rates for Teen Drivers
Insurance CompanyTeenage Female Average Annual Auto Insurance RatesTeenage Male Average Annual Auto Insurance RatesTeenager Average Annual Auto Insurance Rates
Allstate$9,282.19$10,642.53$9,962.36
American Family$5,996.50$8,130.50$7,063.50
Farmers$8,521.97$9,144.04$8,833.01
GEICO$5,653.55$6,278.96$5,966.26
Liberty Mutual$11,621.01$13,718.69$12,669.85
Nationwide$5,756.37$7,175.31$6,465.84
Progressive$8,689.95$9,625.49$9,157.72
State Farm$5,953.88$7,324.34$6,639.11
Travelers$9,307.32$12,850.91$11,079.12
USAA$4,807.54$5,385.61$5,096.58
Average$7,559.03$9,027.64$8,293.33
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Staying on a parent or guardian’s insurance policy is almost always the best financial move. New drivers can take advantage of all of the discounts already on that policy, like multi-car and loyalty discounts. That can save you thousands of dollars a year. Finding the cheapest teen auto insurance is often about getting as many discounts as possible.

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Can you buy a car with a permit? The Bottom Line

You can buy a car with a permit, but it becomes complicated when you need to insure and register that car. You do not need to have a license to buy or own a car, but you do need one to get insurance. And, you need insurance to register your car in almost every state. Be sure you check the specifics of your state laws.

It’s best to have a fully licensed driver, like a parent or guardian, add your car to their insurance policy, and list them as co-owner on the registration. Staying on someone else’s insurance policy will save you a lot of money.

When you buy a car with a permit, you should always shop around and compare rates. Enter your ZIP code now to see auto insurance quotes from top companies.

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