How old do you have to be to finance a car?
What Age Do You Need to Be to Get a Car Loan? Of course, you must be 16 years old to legally drive a car, and usually, you have to be 18 to apply for a car loan. Fortunately, some financial institutions, like City Credit Union, will offer car loans for teens younger than 18 with a co-signer.
You're not of legal contractual age so you'll have to pay in full. Some banks won't even fund you under 18 even with a cosigner.
Buying a vehicle involves a lot of paperwork, including a sales contract, which you typically need to be at least 18 to sign. If you need financing, they may have to co-sign the loan for you. Dealers also handle your vehicle registration, and you need to be at least 18 to register a vehicle in most states.
Real-World Example: A $30,000 auto loan balance with an average interest rate of 5.0% paid over a 5 year term will have a monthly payment of $566.
Co-sign a loan or a lease
"Helping a 16- or 17-year-old get a used car loan can be a good way to build credit," Griffin tell CNBC Select.
Legally, only someone over 18 can get a loan and, even if you are 18 or older, the lender will probably ask for your parent or another adult to co-sign. However, you'll need to make the payments every month, or it will have a negative impact on your credit—and on your co-signer's credit, too.
For insurance purposes, this means a 17-year-old cannot own their own car insurance policy without having an adult sign it with them. In fact, if a teen wants to finance and buy a car, their parent or guardian must co-sign the loan. Even if they were to pay cash, their parent is still the legal owner.
Because most drivers under 18 can't get an auto loan, the only other alternative is to purchase a car in cash. However, young drivers who want to buy a car with cash might run into some obstacles. If a minor wants to pay cash for a vehicle, most states still won't allow them to have a car titled in their name.
The Eligibility Requirements
Essentially, you should be: A Resident Indian. Above the age of 18 years. A salaried professional, a self-employed professional, or a business owner earning at least ₹25,000 per month.
Co-signing on an auto loan for your child can help them establish credit and qualify for a lower interest rate, but parents should beware of the risks of co-signing a loan.
How much is a $25,000 car loan for 72 months?
For example, if you get a $25,000 loan with a 3.5% interest rate for 48 months, your monthly payment will be $559, and you'll pay a total of $1,827 in interest. If you extend the loan term to 72 months, it will reduce your monthly payment to $385, but you'll pay $2,753 in interest.
If you're looking for the lowest overall cost over the longer term, buying a car with a loan, and then driving it for a while debt free after you finish making payments, is usually the best option. But if low monthly payments and a smaller down payment are a priority, a lease may be worth considering.
Generally, lenders don't let you finance less than $5,000, but some direct lenders' caps are even higher. The good news is you can make the overall cost of your loan more affordable without worrying about the financing limit.
The highest score you can have on the most widely used scales is 850. According to data from FICO, about 1.7% of all FICO scores were at the coveted 850 as of November 2023.
The best way to build your child's credit is to start teaching them credit basics early on. You can add them as an authorized user on your credit card when they're ready and, eventually, you may choose to cosign one of their loans or credit cards.
Can you check a minor's credit score? Well, they won't have a credit report to check until they are 18. So no – it isn't possible to check your child's credit report when they are a minor simply because it doesn't exist (yet).
You and your cosigner don't need to live in the same state. A cosigner is also required for all 17-year-old applicants. The cosigner must be a U.S. citizen or permanent U.S. resident alien (with Green Card). The cosigner must be the age of majority in the state where they live.
A 16-year-old can buy a car with cash, but an auto loan is out of the question until the teenager is 18 years old. A minor can't register a vehicle in their name or purchase car insurance by themselves.
In the United States, a person cannot legally sign a loan contract if they are under the age of eighteen. However, there are a few ways to get approved for a loan when underage. You can apply for student loans, get a secured credit card, or apply for a loan with a cosigner.
What Age Do You Need to Be to Get a Car Loan? Of course, you must be 16 years old to legally drive a car, and usually, you have to be 18 to apply for a car loan. Fortunately, some financial institutions, like City Credit Union, will offer car loans for teens younger than 18 with a co-signer.
What is the cheapest insurance for a 17 year old?
Travelers and State Farm have the cheapest car insurance quotes for most young drivers. This includes teens on a parent's policy and teens on their own. USAA has the cheapest rates overall, but it's only available to teens in military families.
| State Sort arrow ascending Sort arrow descending | Avg. annual full coverage premium Sort arrow ascending Sort arrow descending |
|---|---|
| California | Avg. annual full coverage premium $6,640 |
| Colorado | Avg. annual full coverage premium $6,152 |
Teenagers can't lease a vehicle on their own because they're not legally allowed to sign a contract.
Cars 15-20 years old are nearing the end of their service lives. While they're the cheapest to buy, unexpected and costly repairs can upend the lower initial cost.
It's possible to get approved for a car loan with no credit. However, unless you have a cosigner to help you, your options may be limited and expensive.
