Can you finance a car without a licence?

It might seem unusual to want to buy a car if you don’t have a driving licence - and it is. But although it’s rare, it’s not unheard of. 

The good news is that not having a driving licence doesn’t automatically mean you can’t get car finance. Let’s take a look at how it all works.

Is it possible to finance a car without a licence?

There are circumstances where you might be in the market for a new ride, even if you don’t have a full driving licence. For instance, you might be a generous soul looking to buy a car for someone else, like a friend or family member. Or, you might be learning to drive with a provisional licence, and lining up your wheels ready for when you pass your test.

The beauty of car finance is that it’s so flexible, and there are tons of different options to suit different circumstances. Car finance companies usually prefer it if you do have a full licence, but some will lend to people with a provisional or learner licence. 

Plus, your licence isn’t the only thing they consider. So, if you’re looking to finance a car without a full driving licence, don’t assume it’s impossible - there’s a chance you could find the right deal for you.

Why do most lenders ask for a driving licence?

Generally speaking, most lenders would want you to have a driving licence if they were going to offer you a car finance deal. 

For one thing, your driving licence is a handy way for the car finance company to check your identity, which reduces the risk of fraud. 
Plus, it assures them that you’re legally allowed to drive, and gives them confidence that you want to take out the loan for a legitimate reason, and that you intend to actually drive the car. 

When you apply for car finance, the lender will weigh up how risky it might be to lend to you - this forms a big part of their decision on whether to accept you, and what deal they might offer you. If you don’t have a driving licence, they might question whether you really intend to use the car, and this could then raise concerns about why you’re buying the car, and how likely it is you’ll keep on top of repayments. 

Having said all that, lenders do consider other things as well as your licence, so not having one doesn’t necessarily mean it’s the end of the road.

Are there exceptions for car financing without a licence?

There are plenty of genuine scenarios where you might be looking to finance a car, even though you don’t have a full driving licence. For example, you might be looking to buy a car for a family member, or you might be learning to drive with a provisional licence, and setting yourself up so you can hit the road as soon as you pass your test.

If you’re in a situation like this, you could still get a car finance deal from some lenders. But, if you don’t have a driving licence, the chances are the lender might ask for some extra paperwork to satisfy any risk or security requirements. They might also offer you a higher interest rate, particularly if they think there’s a higher risk involved in lending to you.

What are the alternative options if you don't have a driving licence?

Getting car finance without a driving licence is by no means impossible, but it’s a little less straightforward. There are other options you could explore, to help get you on the road to your new car.

Rather than applying for car finance on your own, consider whether you could add a close friend or family member who does have a driving licence to your application. You could do this as a joint car finance application, where you are both equally responsible for the car and the repayments. 

Another option would be to apply for guarantor car finance - this is where the other person, known as the ‘guarantor’, is legally responsible for the loan if you’re unable to keep up the repayments.

These are both ways for you to potentially improve your chances of getting accepted for car finance, because borrowing money along with another person makes it less risky from the lender’s perspective. Having two people on board - especially if one of them has a driving licence - means the lender can be more confident that the loan will be managed responsibly and all the repayments will be made on time.