Can You Buy a Car with an Expired License and Bad Credit?

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Even with poor credit.

By

Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - October 1, 2019

Technically, you may be able to buy a car with an expired license and poor credit. However, finalizing the auto financing process and getting the vehicle insured with an expired license is going to cause some problems. Your license needs to be current and valid before you head to a dealership to get a bad credit car loan.

License Requirements for Buying a Car

In order to finance a vehicle with bad credit, the lender is going to require proof of identity with your driver’s license. Listed on your license is the expiration date – usually your birthday and year – and the lender is going to see if it’s expired.

You need a valid driver’s license in order to insure a car in your name, and register it for license plates. You also can’t finance a vehicle with an expired license.

If your license is expired and hasn’t been renewed, or you don’t have a temporary license, you’re going to have a hard time getting auto insurance for the car. You must have full coverage insurance in order to finance a vehicle, regardless of your credit situation, and you need a valid, non-expired driver's license to get auto insurance.

Once I Renew My License, Where Do I Go to Buy a Car with Bad Credit?

As soon as you renew your driver’s license, you can get right to work on the car buying process. Now it’s time to find a dealer. CarsDirect can point you to a local dealership, but first let’s talk about the two types of dealers you could work with:

  1. Special finance dealerships – These dealers are signed up with subprime lenders that work with credit-challenged consumers. Although these lenders run credit checks, they base approvals on additional factors including your income and job and residence stability.
  2. Buy here pay here dealerships – Buy here pay here (BHPH) dealers offer loans in-house, meaning they’re both dealerships and lenders. Most BHPH dealers don’t run credit checks, and base approvals on your income. However, you may not be able to improve your credit score with one of these auto loans since some don’t report loans or on-time payments to the credit bureaus.

Keep in mind that each lender has different requirements. In most cases, though, you need a minimum monthly income of $1,500 to $2,000 before taxes in order to qualify.

Additionally, you can expect to be asked to make a down payment. Subprime lenders typically require $1,000 or 10% of the vehicle's selling price down, whichever is lower. BHPH dealerships generally set their down payment requirement based on the price of the car you choose.

The Bottom Line

Make sure your license is current before you start the car buying journey. You don’t want to be stuck in the middle of the process only to find out you can’t finance a vehicle and get insurance due to an expired driver’s license.

Once you have that set, though, you can move forward and finance the car you need – even if you have bad credit. Here at CarsDirect, we’re teamed up with dealers all across the country that specialize in getting people with less than perfect credit financed.

Fill out our auto loan request form today, and we'll get right to work connecting you to a local dealership!

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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