How to Buy a Car at 17 Years of Age

At what age can you own a car? The short answer is that you can own a car when you reach the age of majority (18 years of age in the United States). While there are exceptions to this rule, the most likely scenario for a teenager hoping to buy a car while still a minor is that the participation of a parent or guardian will be required to hold the car's title on their behalf.

Even if a minor could secure a loan to purchase a car, Bank of America notes that most states make it illegal to grant a car title to anyone under the age of 18. Instead, the parent or guardian typically holds the car title and transfers it to the teenager when they reach the age of majority. Requirements for holding a car title vary by state; you can contact your state's department of motor vehicles if you want to find out what's required in your state.

According to Cornell University's Legal Information Institute (LIL), contracts with minors are not legally enforceable until the person comes of age. Institutions are therefore unwilling to sign a contract (such as a loan agreement or vehicle sales agreement) with a minor, knowing that it might be voided at any time before the minor turns 18. The exception to this rule is that emancipated minors may enter contracts, although prior approval of a court may be required to do so.

Several contracts must first be entered to purchase and use a car; contracts are the point at which a person under the age of 18 will begin to encounter roadblocks. Lending institutions – even those that work with people who have little to no credit history – will generally not issue loans to minors, given that the loan represents a contract that may not be legally enforceable. However, according to Experian, a teenager may be able to receive a loan with an adult co-signer. The credit history of both the minor and the co-signer would be affected by the repayment or non-repayment of this loan.

With the assistance of a parent or guardian, a teenager can often acquire a used car, and even a car loan, and begin building their insurance record and credit history. In the age of the internet, most of this can be done online, so long as the teenager and their parents exercise caution.

Consumer Reports identifies some of the top auto finance companies online, which can help find the best rates for teen (or any) drivers who are looking to get their first car loan. However, use caution when searching for any lending institution. Check that your loan does not include loan prepayment penalties (financial penalties for paying off your loan early or faster than expected). You can select the best site to buy used cars, whether online or in person, by researching on the internet and discussing with people in your life who may have recently bought used cars.