There’s no minimum age to own a car, but you need to be 18 to buy one without a parent or guardian to co-sign all contracts and handle financing.
TL;DR
The legal age to purchase a car varies by situation, but here’s what matters most:
- Under 18: You can own a car, but need an adult to co-sign contracts and handle financing
- 18 and older: You can buy independently, and need car insurance and a driver’s license
- Financing reality: Most teen drivers have limited credit history and won’t qualify for auto loans
The bigger question isn’t just age, it’s whether you can handle the $6,480 annual cost that comes with car ownership.
Can I buy a car if I’m under 18?
Yes. Here’s something that might surprise you: there’s actually no minimum age to own a car. A 10-year-old could technically own a vehicle. The complications start when you want to actually buy one.
The age of 18 represents the age of majority in most states (AKA, when you become a legal adult), which means you can:
- Sign a sales contract without parental involvement,
- Apply for an auto loan as the primary borrower,
- Take full legal responsibility for the purchase.
If you’re 17 years old or younger, you’ll need adult help with every step of the process.
Whether you’re shopping at car dealerships or buying from a private seller, the age requirement stays the same. The main difference with private sellers is they often accept cash payments, which can bypass some financing complications, but you still need an adult for the title transfer if you’re under 18.
How much does owning a car actually cost?
Before you get too excited about car buying, let’s talk real numbers. That moment when you drive off the dealership lot? That’s actually when the real expenses begin. According to recent Lemonade survey data, parents spend an average of $6,480 annually supporting their teen’s driving, and that’s on top of whatever they paid for the car itself. Here’s how that staggering cost breaks down monthly:
| Expense category | Monthly cost |
|---|---|
| Gas | $176 |
| Car insurance | $206 |
| Maintenance | $158 |
| Total | $540 |
This financial reality explains why only 14% of today’s teens actually buy their own first car, compared to 35% of their parents’ generation. The generational shift is dramatic: when today’s parents were teens, 45% had their own cars. Now, only 39% of teens have their own vehicles, and 61% share with parents.
New drivers face particularly harsh financial realities because insurance premiums are highest for teen drivers (often 2-3x adult rates), and having no credit history means higher interest rates on auto loans. Most lenders won’t approve first-time buyers without a co-signer, regardless of age.
What’s the process of buying my first car?
Getting started: license and budget
You don’t technically need a driver’s license to buy a car, but good luck getting car insurance without one. Most insurance companies require a valid license for coverage, so start there.
Next, be upfront about the real costs involved. Beyond your monthly payments, you’ll need money for a down payment (typically 10-20% for used cars), auto insurance, gas, maintenance, and those unexpected repairs that always seem to happen at the worst time.
Credit and co-signing reality
Most teen drivers start with either no credit score or what lenders consider bad credit. This reality means you’ll face higher interest rates, smaller loan amounts, and almost certainly need a co-signer. Even if you’re 18 and legally able to sign contracts, most lenders won’t approve auto loans for young adults without credit history or significant income.
Research that actually matters
Smart car buyers focus on four key areas when comparing vehicles:
| Factor | Why it matters for teens |
|---|---|
| Safety ratings | Lower insurance costs, parental approval |
| Fuel efficiency | Gas costs add up to $176/month average |
| Warranty coverage | Protection against expensive repairs |
| Insurance costs by model | Varies wildly between car types |
Dealership vs. private seller: The trade-offs
Car dealerships offer warranty protection, financing options, and trade-in possibilities, but you’ll pay more upfront. Private sellers might offer lower prices and more negotiation flexibility, but you’ll get less financing help and take on more risk without warranty coverage.
Regardless of where you buy, always test drive any first vehicle you’re considering, and bring a knowledgeable adult who can spot potential issues.
Why is car insurance so expensive for teens?
Here’s where age really hits your wallet. Young drivers pay the highest insurance rates because traditional insurance companies use your birthday as the primary factor in determining your premiums. Most insurers see “teen” and automatically assume “high risk,” regardless of how well you actually drive.
But here’s where things get interesting: not all insurance works this way. Several strategies can help you fight back against age-based pricing, and the most effective approach is choosing an insurer that judges your driving skills, not your birthday.
Lemonade takes a completely different approach. Instead of punishing you for being young, we use AI-powered telematics to track how well you actually drive from day one. Our system rewards safe driving habits like smooth acceleration, gentle braking, and keeping your phone untouched while driving. Drive responsibly, and you’ll earn discounts that start immediately, not after you turn 25.
Traditional strategies still help too: choosing cars with excellent safety ratings, taking defensive driving courses, and bundling with your parents’ insurance policy can all reduce costs. But with usage-based insurance that measures your actual driving performance, you’re not stuck waiting years to prove you’re a safe driver, you can start earning those discounts from day one.
How do I pay for a car?
Traditional auto loans
Most banks and credit unions will require a co-signer with good credit history, proof of steady income, and a down payment of 10-20%. The interest rate you’ll pay depends heavily on your co-signer’s credit score and the lender’s assessment of risk.
Alternative approaches
Some families set up their own payment plans, which can skip credit score requirements and offer more flexible loan terms while building family trust and responsibility. If you’ve saved enough for a used car (realistically $3,000-$8,000 for something reliable), cash eliminates monthly payments, interest rate concerns, and credit report issues entirely.
What cars should I look to buy as a first-time buyer?
The smartest first car choices are typically used cars that are 2-4 years old, still under warranty, and from popular models that make maintenance easier and more affordable. Focus on vehicles with good safety ratings and reasonable fuel efficiency.
Several models consistently make sense for first-time buyers because they tend to be reliable, have lower insurance rates, and hold their value well:
- Honda Civic or Accord: Known for reliability and reasonable insurance costs
- Toyota Corolla or Camry: Excellent resale value and widespread service availability
- Mazda3: Good balance of features and affordability
- Hyundai Elantra: Often comes with strong warranty coverage
Red flags to avoid
At dealerships, watch out for pressure to buy extended warranty plans, salespeople who focus only on “monthly payment” instead of total cost, refusal to allow independent inspections, and interest rates significantly above market rates.
With private sellers, be wary of car title issues, refusal to allow test drives, prices way below market value (usually indicating problems), and high-pressure “must decide today” tactics.
How do I convince my parents to let me get a car?
Here’s the reality: your parents are probably going to stress about this. Driving is actually the #2 thing families fight about, and parents spend an average of $6,480 per year on their teen’s driving costs. That’s a lot of money, which explains why they’re not exactly jumping at the chance to hand you keys.
The good news? Most of their worries are predictable, which means you can get ahead of them. Parents typically freak out about speed, gas money, not knowing where you are, and how late you’re staying out. Every one of these concerns connects back to either safety or money… but usually both.
Here’s your game plan for the conversation:
Before you even bring it up
Do your homework. Research actual cars and their costs (not just the purchase price: insurance, gas, maintenance). Show them you understand this isn’t just “buy car, drive car.” Present a realistic budget that includes how you’ll help pay for things, and prove you’re responsible in other areas of your life first.
During the actual conversation
Acknowledge that $6,480 reality they’re facing. Offer to share costs or earn money for payments. Suggest starting with a reliable used car to prove you can handle the responsibility without them risking a huge investment. And here’s the key part: offer to accept monitoring apps or driving restrictions without being asked. Most parents (63% according to our data) actually want this technology anyway.
The families that make this work treat it like a partnership, not a battle. When parents see you understand both the financial commitment and safety concerns, they’re way more likely to say yes. Plus, 96% of parents actively work on teen safety. They want you to succeed, they’re just scared about the risks and costs.
Before we go…
Ready to start your car ownership journey? When you’re ready for car insurance that rewards responsible driving, check out Lemonade’s transparent pricing and AI-powered discounts that help safe drivers of any age save money while building trust with their families.
Car buying FAQs
Can I buy a car at 16?
You can own a car at 16, but you’ll need an adult to handle all contracts and financing. Most dealerships require someone 18+ for the actual purchase paperwork, and you’ll definitely need help with any auto loan applications.
How can I buy a car if I have no credit history?
You’ll almost certainly need a co-signer, face higher interest rates, and might need a larger down payment. Building credit with a credit card or becoming an authorized user on a parent’s account can help long-term.
Is it better to buy new or used for my first car?
It’s a personal decision, but used cars make more financial sense for most teens because you’ll avoid massive depreciation, pay lower insurance premiums, and reduce the financial pressure on your family. A reliable used car can serve you well while you build credit history and driving experience.
How much should I spend on my first vehicle?
Financial experts suggest keeping total transportation costs (payment, insurance, gas, maintenance) under 20% of your income. For most teens, this points toward used cars in the $5,000-$12,000 range, depending on your financial situation.
Do I need my parents to co-sign if I'm 18?
Not legally, but practically? Probably. Most lenders won’t approve auto loans for 18-year-olds without credit history or significant income, regardless of age. Even if you can technically sign contracts, the financing piece usually requires adult help.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage and discounts may not be available in all states.
Share
