There are always questions when it comes time for a teen to drive.
Should your teen have their own car or drive your car? Is it better to have your teen on your auto insurance policy or on 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 in order to buy a car and it is illegal for anyone younger than 16 to register a vehicle in their name. However, state laws vary.
- State laws vary regarding at what age someone can title a car in their own name, but it’s 18 in most cases.
- A minor cannot enter into a contract, making it very difficult for someone 17 and younger to be a sole owner of a motor vehicle.
- To legally sign an insurance policy or other contract, a person must be of the Age of Majority in their state – which is the age when a child 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?
The short answer is “yes.” But your teen may not be able to drive it without involving you, as the parent, in securing auto 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?
When it comes to the question “How old do you have to be to have a car in your name?” the answer will vary depending on the state you call home. But, in most cases, you need to be 18 to legally hold 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 operate the vehicle on the street legally it must be registered as well as insured. Most states require a person to be 18 to enter into a contract such as an insurance policy legally.
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 own the vehicle by having their name on the title.
Registration is a different matter altogether and is required by the state. It validates that your vehicle has been entered into their registration system and has been deemed roadworthy and 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, which 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 at the “age of majority, which 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, 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.
So, while the answer to the question, “can a minor own a car” is “yes,” when it comes time to register and insure the vehicle, a parent or guardian will need to be involved.
How old do you have to be to have a car title in your name?
State laws vary regarding the age someone can title a car in their own name. The best way to determine what the requirements are 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 various differences in the law:
Curious about how old you have to be to buy a car in Texas? 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. However, insurance companies may impose age restrictions on persons they insure and dealers likely won’t sell to a minor.
North Carolina is similar to Texas in the sense that the state does not set a minimum age limit when it comes to ownership of a vehicle. 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 will be required to 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. If a driver younger than 18 wants to title a vehicle, 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, 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 – 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 lack the capacity to 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, typically a car dealer selling to a 17-year-old will 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 true 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 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. 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 and 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.
Can a teenager get their own car insurance policy?
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’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 would need to 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 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.
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 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 from 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 parental consent.
- Court order from a judge: This doesn’t require parental consent.
Once emancipated, a minor is legally able to enter into a contract, so the question of 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
I am 16 years old and have a job. Can I buy a car with cash on my own?
If your state permits minors to title vehicles, you can purchase the car yourself, but in most states, you will still need a parent or guardian to secure vehicle registration and auto insurance for the vehicle.
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 that will extend loans to minors, they will require an adult co-signer. Whether you purchase from a dealership or a private party, the same laws will apply.
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.