For many new drivers, especially teens or young adults, this question often arises: “Can I finance a car with a learner’s permit?” While the answer is technically yes, it can be quite difficult in reality.

1. Lenders typically require a driver’s license

Most lenders and dealerships expect to see a valid driver’s license before they approve financing. A few may accept a state-issued ID or passport to verify identity, but even then, options are limited.

2. When a cosigner can help

If you have a learner’s permit and are determined to finance a vehicle, having a cosigner can make a big difference. A cosigner can:

• Improve approval chances, especially when the primary borrower lacks credit history or a license

• Secure better terms, including a lower interest rate or more manageable monthly payments

• Help build credit for the permit holder over time, assuming payments are made on time

However, it’s important to understand that a cosigner shares full legal responsibility for auto financing. If payments are missed, the cosigner’s credit is affected, and they become liable for the remaining balance. Honestly, if you’re deadset on owning a vehicle, the easiest strategy is to pay cash for something now and then finance a better vehicle once you’ve obtained a license and have established your credit.

Insurance and registration will still be key obstacles

Getting approved for financing is only one part of the puzzle. To legally drive and own a vehicle, you’ll also need insurance and registration — and this is where many permit holders run into roadblocks.

Like lenders, most insurance companies require a valid driver’s license to issue a policy. Some may provide coverage if a licensed parent or guardian adds the permit holder to a policy, but standalone coverage is rarely available to those with a permit. Even when allowed, premiums tend to be high because new drivers are perceived as having a higher risk.

Registration can be equally tricky. Many states require a license to register a vehicle, or they need the co-owner to have a valid license. Although some states allow registration using an alternative ID, such as a learner’s permit, the process is often complex and varies widely based on local DMV rules.

Should you bother trying to finance a car with a permit?

When you only have a permit, the auto financing process will be complicated and filled with hurdles. At Credit Acceptance, we strive to empower dealers to make vehicle ownership accessible to nearly everyone. However, with only a permit, you must have a cosigner with a valid driver’s license. If you have a parent or other family member willing to finance a vehicle that you’ll primarily be driving, encourage them to start the pre-qualification process on our website.