If you’re looking for a new car, some circumstances 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 of financing a car without a license.
To some readers, this may seem strange. Surely there’s no way someone without a valid driving licence can finance a car? But the truth is, you can, and many people do for reasons such as buying a family car for a partner or preparing for when they pass their driving test. In fact, with around 80% of new cars in the UK bought on finance, most through PCP agreements, it’s not unusual for the registered keeper not to be the driver themselves.
The legalities of financing a car
When you finance a car, you can choose from a variety of purchase plans, the most popular of which are PCP (Personal Contract Purchase), HP (Hire Purchase), and increasingly, Lease/Subscription models.
PCP Agreement: 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.
HP Agreement (Hire Purchase): Monthly repayments are higher because there is no balloon payment at the end. You own the car outright once payments are completed, making you the legal owner and registered keeper. More on Hire Purchase car finance.
Leasing/Car Subscriptions: A growing trend in the UK and Europe is subscription-based car finance. Instead of buying, you “rent” the car on a long-term lease. This often includes maintenance, servicing, and sometimes insurance, making it attractive for those without a license but planning ahead for when they pass.
But how can you finance a car in any 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 it.
This separation between “financing” and “driving” is often misunderstood. In practice, as long as you can prove identity and pass affordability checks, you can secure a finance deal.
Can you finance a car without a license?
As we’ve explained, the short answer is yes. However, this doesn’t mean you won’t face some difficulties. Ultimately, the decision is down to the car manufacturer or finance provider.
Having a license may not be an issue, but the bigger challenge is affordability and your credit profile. If you’re a young driver without a full driving license, it’s fair to assume that you don’t have a long credit history either. This could prevent some car manufacturers from approving your finance application. In fact, around 1 in 5 car finance applications in the UK are rejected due to poor credit history or affordability concerns.
Bad credit car finance without a license.
One of the most common barriers is not just having no license, but also having poor credit. According to UK Finance reports, around 1 in 5 car finance applications are rejected due to credit score issues.
If you fall into this category:
Consider specialist lenders: Some finance companies focus specifically on bad credit car finance.
Build your credit: Using credit responsibly on smaller agreements (like a phone contract or credit card) improves your score over time.
Expect higher interest rates: Bad credit car finance can mean APRs of 20%+, compared to the market average of 9.9%–12%.
Look at cheaper vehicles first: Starting with a more affordable car can increase your likelihood of approval.
Even if you don’t have a license, applying with a joint applicant (such as a parent, spouse, or guarantor) can significantly improve your chances of approval.
Market trends: Financing a car without a license
While it may sound unusual, the practice is growing. With the rise of multi-car households and car subscriptions, more people finance cars for someone else in their family. For example:
- Parents financing cars for children preparing for their test.
- Partners financing cars jointly where one doesn’t yet drive.
- Businesses financing pool cars where the main signer is not the driver.
The scale of the market reinforces this: in March 2025 alone, around 240,000 cars were financed in the UK, totaling £5.15 billion in loans, an 18% increase year-on-year.
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.
Here are some steps to improve your chances:
- Know Your Budget: If you’re in full-time work, calculate a safe monthly repayment. Experts recommend keeping car finance below 15% of your net monthly income.
- Check Your Credit Score: Many free tools let you check this before applying, helping you target lenders more effectively.
- Choose Affordable Brands: Opt for reliable used cars (Ford, Vauxhall, Toyota) instead of premium brands initially.
- Consider a Guarantor: A co-signer with a strong credit history can unlock better deals.
- Shop Around: Use brokers or comparison platforms rather than applying to a single dealership.
Remember: Financing a car without a license is more about financial responsibility than driving ability. If you can afford it, you can usually have it.
Finance companies care more about affordability than your driving status. As long as repayments are realistic for your income, approval is still possible even without a license.
Alizeh is a car finance specialist at ChooseMyCar with a focus on clear, jargon-free advice. Her expert guides are designed to help UK drivers understand their options, from PCP deals to managing monthly budgets, so they can finance their next car with confidence.
