If you’re looking for a new car there are some circumstances that can be difficult to navigate. While this one might be rare, it does occur, so let’s set your mind at ease with how you can get around it. The problem: financing a car, without a license.
To some readers this may seem strange. Surely there’s no way someone without a full, valid driving licence can finance a car? But that’s not the case – and here’s why.
The legalities of financing a car
When you finance a car you can choose from a variety of purchase plans. The most popular being a PCP or HP financial agreement.
A PCP agreement is where your monthly repayments are slightly lower, because there is a balloon payment due at the end of your agreement, in order to own the car. You don’t have to make this final payment, you can instead return the car to the manufacturer and take out another PCP financial plan. If you do this you never own the car, but you are the registered keeper.
An HP agreement, also known as a hire purchase, is where your monthly repayments are slightly higher, because there is no balloon payment at the end. You will own the car outright at the end of the agreement, making you the legal owner and registered keeper of the car.
But how can you finance a car in either of these circumstances without a license? Well, that’s because financing a car doesn’t mean you have to be the registered keeper, or the person who drives the car. A financial agreement for a car does not mean you own the car, or that you will be the person driving.
This doesn’t prevent you from driving the car. If you’re financing the car, you can still learn to drive it under regular conditions (that you are accompanied by someone over the age of 25 who has held their license for an extended period of time and that you are insured on the car with all the correct information) .
A financial agreement for the car is separate from the ability of the person driving it, or in fact who drives it. All you will need in order to take out the financial agreement for your car is proof of identity. This can be done with a passport or provisional license.
Can you finance a car without a license?
As we’ve previously explained, the short answer is that you can. However, this doesn’t mean that you won’t face some difficulties. Ultimately, the decision is down to the car manufacturer. Having a license may not be an issue, but you may not pass their financial checks.
If you’re a young driver without a full driving license, it’s fair to assume that you don’t have a long line of credit information either. This would prevent some car manufacturers from giving you a car on finance, simply because your bad credit rating is not high enough for their standards. It’s important to note that this isn’t simply because you are young, you could be 40+ with bad credit and a full licence, and still could be refused a financial agreement from the car manufacturer.
How to get a car on finance without a license
Can you get a car finance deal without a license, yes. But it’s important to set your expectations at the right level. This is a financial agreement after all, and it’s safe to assume that because you’re looking to enter a financial agreement, you don’t have the money to put down a huge deposit or buy a car outright. So let’s look at what it will take to get a car on finance without a license.
The first thing you need to do is look at how much you can afford. If you’re in full-time work with a salary, you know how much you get paid each month. So when speaking to a car dealership, let them know how much you’d be looking to pay as a maximum each month. If your payslip is unpredictable each month, then you’ll need to be looking for repayments as low as possible.
The next thing you need to do is look at brands that are affordable. There’s no point in looking at a brand new Audi or Mercedes if they’re not going to be in an affordable price range. Head to a second-hand car dealer and see what they’ve got on the forecourt. We recommend speaking to a salesperson before you start getting too attached to brands and colours on offer. Let them know your price point and go from there.
Financing a car without a license is straightforward because it’s all about affordability. If you can afford it, then you can have it. Then don’t delay in passing your test to bring your insurance repayments down!
