Can You Be 17 and Get a Car Loan?

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Even with poor credit.

By

Content Manager

David Topham is the Automotive Content Manager for Internet Brands. He works as the lead editor for CarsDirect and Auto Credit Express, and contributes to those sites alongside other Internet Brands' properties like The Car Connection. He was born and raised in Michigan and is a graduate of Michigan State University.


, Content Manager - January 21, 2020

Some teenagers may be wondering if it’s possible to get an auto loan when they’re 17. Unfortunately, you can’t be 17 years old and take out a car loan. Getting an auto loan requires signing a contract, and you have to be 18 years old to legally enter into a contract in the United States.

Why You Have to Be 18 to Get a Car Loan

Seventeen-year-olds can’t take out a car loan, or even become a cosigner or co-borrower on one. In the U.S., you absolutely have to be 18 years old in order to legally sign a loan contract. Up until you turn 18, you’re considered a minor by law and can’t enter into a contractual agreement with a lender.

This probably isn’t what some teenagers want to hear, but it’s the law. Besides, there are many other factors outside of your age that you have to consider when it comes to qualifying for an auto loan. Even 18-year-olds are going to want to do their due diligence before they consider applying.

Auto Loan Requirements

Even if you were allowed to take out a loan when you’re only 17 years old, it’s likely that you would have a hard time meeting the typical car loan requirements.

Here are four criteria lenders consider when qualifying you for an auto loan:

  • Credit – You have to have qualifying credit in order to get approved for a loan. The minimum credit score you need varies from lender to lender. Subprime lenders, for example, specialize in helping borrowers with bad credit or no credit get financed. They’re more likely to be able to work with a borrower with a credit score below 600 than mainstream banks or online lenders, who tend to have stricter credit score requirements. It’s not uncommon for 17- and 18-year-olds to have little or no credit, so this is likely to present a road block.
  • Income and Employment – You also have to be able to meet the lender’s minimum income requirement. Obviously, lenders aren’t going to be interested in approving loans for borrowers who aren’t going to be able to pay them back. How much you need to make varies by lender, but subprime lenders often require a minimum monthly income of at least $1,500 to $2,000 before taxes. Outside of the legal implications, not many 17-year-olds are able to meet such an income requirement. You also have to have a job, or at least a steady income from another source that you can prove you’ll receive for the entire loan term.
  • Residence – Lenders also have rules pertaining to an applicant’s residence situation. Generally speaking, they want to know where the vehicle is going to be parked, which is why they require you to prove the location of your residence. Don’t be surprised to be asked to provide a utility bill in your name at the address listed on your application to serve as proof of residence.
  • Identity – You have to provide a valid driver’s license or state ID to serve as proof of identity. This also has to prove that you're at least 18 years old. The ID has to be valid, which means it can’t be expired, suspended, or revoked.

Needless to say, the general requirements for a car loan are going to be hard for younger borrowers to meet.

The Bottom Line

You can’t be 17 and get an auto loan, and even most 18-year-olds are going to be facing an uphill climb to get approved. These younger consumers are going to be better served if they take some time to prepare for a car loan in the future. Start by establishing a good credit history as soon as possible, and make preparations to be able to meet lenders’ other typical requirements.

When the time is right, CarsDirect can help you get connected to a local dealership, or help you find the right vehicle for you with our new and used car sections. We want to be your go-to source for help!

Since we work with a nationwide network of special finance dealers, we’re experts when it comes to identifying which dealership near you can work through unique credit situations, such as having poor credit or no credit.

To get the process of getting matched to a local dealer started, fill out our secure auto loan request form online. Our service is free and never puts you under any obligation to buy, so you can get started with confidence right now.

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, Content Manager

David Topham is the Automotive Content Manager for Internet Brands. He works as the lead editor for CarsDirect and Auto Credit Express, and contributes to those sites alongside other Internet Brands' properties like The Car Connection. He was born and raised in Michigan and is a graduate of Michigan State University.


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