There are many reasons a car shopper decides they want to purchase a vehicle for another party. Perhaps they're buying information technology for their child who is merely starting to drive, or perhaps an elderly parent. They could also be looking to buy a car as a gift for a significant other or assistance out a friend who has bad credit. Although nosotros're used to seeing ads that feature shiny new vehicles with big red bows, surprised recipients, and proud gifters, there's a lot more that goes into buying a vehicle as a gift. We'll accost common questions similar "Do yous need a license and insurance to buy a car?" "How can you gift a car?" and, "How does auto financing piece of work in this scenario?"

Do I Demand a License or Insurance to Buy a Car?

car insurance policy

Let's starting time with some of the logistics. If you're not a car owner yourself, and you want to purchase a vehicle for a family unit member or friend, you lot may not have some of the documents that are needed when buying a vehicle. These include a current driver'south license to test drive the vehicle (and drive information technology off the lot) also as motorcar insurance.

Every bit long as yous have some other course of regime-issued identification that you can utilise as proof of identity, you're non required to take a driver'southward license to purchase a vehicle. You lot volition need one to exam drive the automobile and to take it home, however. If y'all take discussed the purchase with the recipient, they will be able to come along to the dealership and will need to bring a valid license in order to get behind the bike. If the buy is a surprise, some other licensed commuter will demand to exist nowadays to help you take the vehicle home.

driver's license for test drive

A current license will be required to test drive the motorcar and may be required for motorcar financing.

The car financing step tin can also exist stalled by a lack of a valid driver's license. Co-ordinate to Car and Driver, the dealership'southward finance team will exist hesitant to upshot loans to buyers without a license since it's causeless the unlicensed heir-apparent will take part ownership in the vehicle.

Insurance coverage is the other slice of the car buying puzzle. The vehicle will need to be covered before it can exist driven, so the recipient of the motorcar will need to have an insurance policy in their proper noun. If you choose to buy the insurance policy along with the vehicle, yous tin list the recipient equally the primary driver on the account.

Gifting a Machine

car keys in gift box

Unless you've discussed the details with the recipient, ownership a automobile as a gift isn't recommended.

When it comes to gifting a vehicle, it'due south best to discuss the buy beforehand. Unless y'all share your finances with the recipient of the vehicle (in the case of a spouse, for example) surprising someone with a car gets tricky. Fifty-fifty if you're able to pay cash for the entire automobile buy, there are a number of other expenses associated with car ownership including maintenance, insurance, and fuel. These can add together a substantial burden to monthly expenses, and so y'all'll desire to brand sure the recipient is ready to take them on.

If you're not planning to pay for the vehicle outright, you'll have to determine if you'll accept on the machine loan payments or take the recipient cover them while you help with the down payment. The logistics of car loans in the example of a gift are addressed beneath. If you choose to pass on the loan payments to the recipient, they will demand to be actively involved in the purchase and agree to the loan corporeality.

Oftentimes, the recipient of a gifted car will exist a first-time car owner like a teenager or college student. They should sympathize the responsibilities that come with machine buying including all the expenses involved. If you lot don't programme to assist out with all the additional costs, you lot need to exist certain the immature driver is comfortable taking them on.

Auto Financing

parents buy car for daughter

Perhaps the most disruptive part of buying a car on someone else'due south behalf is the motorcar loan process. In order to buy a vehicle for another political party, you'll have to put the loan entirely in your name, cosign, or co-infringe with the recipient. The person receiving the auto will need to go to the dealership in person to cosign the loan, and if you're planning the gift as a surprise, you will need to put the loan into your ain proper noun. The championship of the vehicle can nevertheless be registered under both your name and the recipient's.

Compromised credit tin make buying a machine hard. If you're looking to purchase a car to help out a friend or family fellow member with bad credit, your best bet is to act as a cosigner or co-borrower. Financing a motorcar in your proper name and so transferring it to someone who could not obtain a car loan on their ain is called a 'harbinger buy' and it is illegal and risky. Using someone else's name to secure a car loan because of poor credit as well falls nether this umbrella. Co-signing on the loan means you lot will be responsible for making payments if the primary owner defaults, and then you should be prepared to have on this hazard.

Making sure you and the recipient of the vehicle are on the same page about the ins and outs of the car purchase is crucial. Hash out how the auto loan will be handled and who is responsible for the downward payment, monthly payments, insurance, and maintenance costs before heading to the dealership.

Notice Local Used Car Discounts