It’s not an all that uncommon predicament, where you would like to apply for a car loan but don’t yet have your driver’s licence. Maybe it’s because you’re about to go for your licence, or you could be purchasing the car on behalf of someone who is already licenced. It’s important to understand that this position won’t necessarily be to your detriment in applying for finance, however you will need to be open and transparent as to the circumstances. After all, no one wants a black mark to follow them around on their credit report.
Having a driver’s licence
To start with, the main purpose of a driver’s licence when applying for a car loan is to serve as a primary form of photographic ID. Should you not have access to a licence, you will need to consider alternative forms of photo ID.
As for insuring the vehicle, there are far less speed bumps in the way when you have access to a driver’s licence. These nuances will vary by insurance provider, as well as the state in which the car is purchased and parked up. When it comes to registration however, sometimes this can only be done if the person to which it is registered has a valid driver’s licence.
Therefore, if you can’t register the vehicle, it is against the law to be on the road regardless of who intends to drive it. Even if they are licenced. At the same time, should you apply for a car loan on behalf of someone else, there are important considerations to contend with regarding your credit history being exposed to their behaviour.
As mentioned earlier, insurance and registration matters differ state by state when it comes to a car owner not having a driver’s licence. In New South Wales and Victoria there is no restriction as such. You are able to apply for a car loan, secure insurance, and register the car even if you do not hold a driver’s licence.
In contrast, head over to South Australia and the rules are different. There you must have a driver’s licence in order to register the vehicle for legal road use. In special circumstances, some car buyers might be well served to take advantage of these variances by registering the car in one state where requirements are less stringent, before having it delivered to their residing state and later re-registered there. Of course, you should always be mindful of the hefty costs involved with an arrangement of this nature, but if you’re ever in any doubt, speak to an expert car loan broker.
The Fincar team is here to help you with all your financing needs. Contact us today to help arrange your next car or equipment loan.