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There are always questions when it comes time for a teen to drive. Should the teen have his or her own car or drive your cars? How much will my insurance go up? Can a 16-year-old register a car?

Can a 16-year-old own a car?

The short answer is, "yes." But the teen may not be able to drive it without involving parents in the insurance coverage. Car ownership can be difficult when a minor is involved. While many states have no issue with a 16-year-old owning a car and titling it in their own name, insurance companies are often reluctant to enter into a contract (an insurance policy is a contract) with a minor, which means the teen cannot legally drive the car out on the street.

At what age can a teen own a car in their own name?

When it comes to the question "how old do you have to be to have a car in your name," the answer will vary by the state you call home. But, in most cases, you need to be 18 to legally operate a car in your own name.

While it's possible to title a car in a teen's name, or even a 10-year-old's name (in some states), to legally operate the vehicle on the street it must be registered as well as insured and most states require a person to be 18 to legally enter into a contract such as an insurance policy.

A motor vehicle title which is also referred to as a "pink slip" is a legal form that establishes the legal owner of a vehicle. Basically, a title simply shows who legally owns the vehicle. Many states allow teens or even infants to technically own the vehicle by having their name on the title.

Registration is something different and is required by the state. A registration is essentially documentation by your state's tax office validating that your vehicle has been entered into their registration system and has been deemed roadworthy.

In addition, registering your vehicle indicates that you have paid all taxes and passed any inspections required by the state. Finally, the registration process verifies that the vehicle is carrying the required amount of insurance, this is the part that can make registering a vehicle in a teen's name problematic.

In order to legally sign an insurance policy or other contract, a person must be of the "age of majority." This is the age when a child legally becomes an adult. Once a person reaches the age of majority they can consent to medical treatment, sign a contract, and join the military if they wish.

The age of majority varies by state but in all states, it is at least 18 and in a couple of states it is even higher. Alabama and Nebraska put their age of majority at 19 so drivers in those states cannot legally enter into a contract until 19.

So, while the answer to the question, "can a minor own a car" is technically yes, when it comes time to register and insure the vehicle, a parent or guardian will almost always have to be involved.

How old do you have to be to have a car title in your name?

State laws vary regarding at what age someone can title a car in their own name and the best way to determine what your state requires is to contact your state's Department of Motor Vehicles for details on local laws.

Here are a few state examples to highlight the various differences in the law:

  • Texas: Curious about how old do you have to be to buy a car in Texas? According to the Texas Department of Transportation, the state doesn't have an age restriction in place for individuals wanting to be recorded on the title and registration as the owner of a vehicle so if you want to title your car in your two-year old's name you are free to do so.

However, the Texas Department of Transportation (DOT) also states that insurance companies may impose age restrictions on persons they insure which is a nice way of saying that in most cases, a teen will not be able to purchase a policy without a parent co-signing.

Proof of financial responsibility (liability insurance) is required to register a vehicle in Texas, so for most practical purposes, a driver must be 18 to truly own a car on their own.

  • North Carolina: North Carolina is similar to Texas in the sense that the North Carolina DOT does not set a minimum age limit when it comes to ownership of a vehicle. A car can be titled in a minor's names as long as the owner can sign their name on the application of title.

However, a license plate cannot be issued without proof of the owner having liability insurance on the vehicle and insurance companies rarely write policies for minors. This means that under most circumstances you will be required to have a parent or guardian sign your insurance documents (contract) if you are under 18 years of age.

  • Ohio: The Ohio Bureau of Motor Vehicles (BMV) allows teens to title a car but your parents must sign a form before that happens. If a driver under 18 wants to title a vehicle, their parent or legal guardian must complete a minor consent form and must also accompany the minor when they appear in front of the Clerk of Courts title office to have a vehicle titled in a minor's name.

While each state is different, in general, a minor cannot enter into a contract, making it very difficult to be a sole owner of a motor vehicle. A minor typically cannot own property, his or her parents technically own that property until the child becomes an adult. In many states, a parent will have to co-sign on a loan for a car, the juvenile can buy a car, but the parent will be the legal owner.

Most car dealers prefer not to sell a car to a minor because there are legal ramifications to letting a person who has not hit the age of majority, the same is true for insurance companies.

Minors lack the capacity to make a contract according to most state laws. While a minor can sign a contract, legally they have the right to honor the deal or void the contract before they reach the age of 18. This means that a minor can void a contract, which makes car dealers and insurance companies wary of doing business with someone under 18 years of age.

Because of contract law, typically a car dealer selling to a 17-year-old will request that a parent or guardian sign on the bill of sale and other contractual paperwork. Doing this makes the adult who signed the contract bound to the contract terms.

The same holds true for car insurance companies. They don't want to take the risk that you could void your insurance contract (policy) with them so they will normally request that a teen have a parent or guardian sign on the policy.

Can a 17-year-old buy a car from a private seller?

Purchasing a vehicle from a private party is basically the same as buying it from a dealer so all of the same rules apply. This means that if your state allows a vehicle to be titled in a minor's name, they can certainly buy a vehicle from a private party.

The problem will arise when it is time to get out on the road. In order to register the vehicle, you must provide proof of insurance in almost all states. The majority of insurance companies will not write an insurance policy for a minor unless a parent or guardian is on the policy as well.

So, what about insurance?

When a teen drives a car owned by the parent, adding a teen driver to the parent's policy is easy, if not expensive. It gets a bit more complicated if the teen owns the vehicle themselves.

If your state allows a teenager to own and register a car in their name, the parent would need to check with their insurance carrier to see if they could place the teen's vehicle on their policy or not. Technically, the parents would not have an insurable interest in the vehicle so the insurance company may refuse to add the teen's car to their policy.

This means the vehicle's insurance would need to be in the teen's name and that will be difficult due to the fact that minors cannot enter into contracts. At this point, the best advice is to contact insurance companies regarding their guidelines on a minor obtaining their own policy. While some insurers may agree to put a policy in the teen's name, most will require a parent or guardian to sign or at least co-sign the policy. Either way, as the parent, you are on the hook for premiums.

The best way to determine if your particular state has any regulations regarding the minimum age to buy an auto insurance policy and as a minor, if there are any consent forms for a parent/guardian to sign is to contact your state's insurance regulator.

Regardless of whether the vehicle ends up being registered in the teen's name or the parent's name, it will be important to look for discounts for teenagers for car insurance. Teen car insurance is very expensive, mainly due to the fact that teens are inexperienced drivers who pose a major risk to car insurance companies.

Emancipated minors are an exception

As with most things in life, there is an exception to this rule. Emancipated minors are free to buy, register, and insure a vehicle in their own name. Emancipation simply means that legally a minor is freed from the control of their parents or guardian and the parents are freed of the responsibility of the child.

There are a number of ways that a minor can be emancipated but the most common methods are:

  • Minor enlisted in the military - Enlisting as a minor requires parental consent
  • Getting married - In most states this requires parent consent
  • Court order from a judge - This doesn't require consent

Once emancipated, a minor is legally able to enter into a contract, so the question of how old do you have to be to register a car is no longer valid. An emancipated minor can legally sign a purchase agreement for a car and as well as an insurance policy. Emancipation laws vary by state.