There are always questions when it comes time for a teen to drive. Questions like: Should your teen drive their own car or your car? Is it better to have your teen on your auto insurance policy or their own? As the parent and auto insurance policyholder, how much will your insurance increase? Can a 16-year-old or 17-year-old register a car or own a car?
We have answers to the questions that have crossed your mind regarding your teen driver, including one of the most common: How old do you have to be to buy a car? In most states, you have to be 18 years old to buy a car, and it is illegal for anyone younger than 16 to register a vehicle in their name.
- To legally sign an insurance policy or other contract, a person must be of the age of majority in their state – when a teen legally becomes an adult.
- If your state allows teens to own and register cars in their name, the parents would need to find out whether they can put their teen’s car on their insurance.
- A car cannot have a license plate unless the owner has liability insurance, and insurance companies rarely write policies for minors.
- Can a 16-year-old own a car?
- At what age can a teen own a car?
- How old must you be to have a car title in your name?
- Can a 16-year-old or 17-year-old buy a car?
- Can a 17-year-old buy a car from a private seller?
- Can a teenager get their own car insurance policy?
- Frequently asked questions: How old must you be to buy a car?
Can a 16-year-old own a car?
The short answer is “yes.” But your teen may be unable to drive it without involving you, as the parent, in securing auto insurance coverage. Car ownership can be complex 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 most cases, you must be 18 to have a car in your own name. While it’s possible to title a car in a teen’s name, it must be registered and insured to operate it on the street. Most states require a person to be 18 to enter into a contract, such as an insurance policy.
A motor vehicle title, also referred to as a “pink slip,” is a legal form that establishes the legal owner of a vehicle. A title shows who legally owns the car. Many states allow teens to own vehicles by listing their names on car titles.
Registration validates that your vehicle has been inspected and registered, deemed roadworthy and the taxes paid. Finally, the registration process verifies that the vehicle is carrying the required amount of insurance, which is the part that can make registering a car in a teen’s name problematic.
To legally sign an insurance policy or other contract, a person must be at the “age of majority,” 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, vote and join the military.
The age of majority is at least 18 in all states. In a couple of states, it is higher – Alabama and Nebraska put their age of majority at 19, so drivers in those states cannot legally enter into a contract until 19.
How old must you be to have a car title in your name?
State laws vary regarding the age at which someone can title a car in their own name. The best way to determine the requirements is to contact your state’s Department of Motor Vehicles (or the Department of Public Safety in Texas) for details.
Here are a few state examples to highlight the legal differences:
Texas doesn’t have an age restriction for individuals wanting to be recorded on the title and registration as vehicle owners. However, insurance companies may impose age restrictions on insured drivers.
North Carolina is similar to Texas in that the state does not set a minimum age limit regarding vehicle ownership. A car can be titled in a minor’s name as long as the owner can sign their name on the title application.
However, a license plate cannot be issued without proof of liability insurance on the vehicle, and insurance companies rarely write policies for minors. This means that under most circumstances, you must have a parent or guardian sign your insurance contract if you are younger than 18.
The Ohio Bureau of Motor Vehicles, or BMV, allows teens to title a car but their parents must sign a form before that happens. Suppose a driver younger than 18 wants to title a vehicle. In that case, their parent or legal guardian must complete a minor consent form and 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.
Can a 16-year-old or 17-year-old buy a car?
While each state is different, a minor generally cannot enter into a contract, making it very difficult to be the sole owner of a motor vehicle. A minor typically cannot own property – their parents technically own that property until the child becomes an adult. In many states, a parent will have to cosign on a loan for a car, and a minor can buy a car, but their parent will be the legal owner.
Most car dealers prefer not to sell a car to minors because there are legal ramifications, which also is true for insurance companies. Minors cannot enter into a contract, so 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 younger than 18.
Because of contract law, a car dealer selling to a 17-year-old will typically request that a parent or guardian sign the bill of sale and other contractual paperwork, which binds the adult who signed the contract to the contract’s terms.
The same holds for car insurance companies. They don’t want to take the risk that a teen could decide to void their insurance contract (policy) with them, so they will 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 the same as buying it from a dealer, so all the same rules apply. If your state allows a vehicle to be titled in a minor’s name, they can buy it from a private party.
The problem will arise when it is time to get on the road. To register the vehicle, you must provide proof of insurance. Most insurance companies will not write a policy for a minor unless a parent or guardian is also on the policy.
Can a teenager get their own car insurance policy?
When a teen drives a parent-owned car, adding a teen driver to the parent’s policy is easy, if not expensive. It’s more complicated if the teen owns the vehicle.
If your state allows a teenager to own and register a car in their name, the parent will need to check with their insurance carrier to see if they could place the teen’s vehicle on their policy. 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 must be in the teen’s name, which would pose a problem since minors cannot enter into contracts. Your best bet is to contact insurance companies regarding their guidelines regarding a minor obtaining their own auto insurance policy.
The best way to determine if your particular state has any regulations regarding the minimum age to buy an auto insurance policy is to contact your state’s insurance regulator.
Regardless of whether the vehicle is registered in the teen’s or parent’s name, it will be essential to look for discounts for teenagers for car insurance. Teen car insurance is costly, mainly because teens are inexperienced drivers who pose a significant risk to car insurance companies.
But discounts are available for teen drivers who earn good grades, students who live away from home and drivers who complete defensive driving and low mileage.
Emancipated minors are exceptions
As with most things, there is an exception to this rule. Emancipated minors can buy, register and insure a vehicle in their own name. Emancipation means that legally, a juvenile is freed from the control of their parents or guardian, and the parents are freed from the responsibility of the child.
There are several 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 parental consent.
- A court order from a judge: This doesn’t require parental consent.
Once emancipated, a minor can legally enter into a contract, so age is no longer relevant. An emancipated minor can legally sign a purchase agreement for a car and an insurance policy. Emancipation laws vary by state.
Frequently asked questions: How old must you be to buy a car?
I am 16 years old and have a job. Can I buy a car with cash on my own?
You can purchase the car if your state permits minors to title vehicles. However, you will still need a parent or guardian in most states to secure vehicle registration and auto insurance.
Can a 17-year-old get a loan to purchase a car from a dealership?
This depends on the lender, but generally, you will not be able to get a loan as a minor. Even if you find a lender extending loans to minors, they will require an adult co-signer. The same laws will apply whether you purchase from a dealership or a private party.
Can I transfer a car title to my 17-year-old?
In most states, no. Title and registration must be done under the name of someone who is considered a legal adult. It is best to leave the vehicle in your name until your child reaches your state’s age of majority.
– Mark Vallet contributed to this story.