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Can I get a car loan if I'm only 16?

I just got my license and I have $5,000 saved up from doing odd jobs. I want to buy a new car, but I'm not sure how to go about it. Can I get a car loan if I'm 16 years old?

avatar
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Saving up $5,000 at your age is impressive—way to go!
As far as getting a
car loan
if you’re only 16, I hate to be the bearer of bad news, but you cannot. This is because you are not legally considered an adult in the US.
Luckily, you have plenty of other options. You can:
  • Use the $5,000 to pay cash for a
    used car
  • Use only a portion of the $5,000 to buy a car and save the rest for expenses, such as car insurance, gas, and maintenance
  • Have your parents get a car loan or purchase a car outright on your behalf, and make loan payments directly to them
The first two options are more financially savvy, especially when you consider the cost of car insurance. Expect to pay somewhere between $300 and $500 a month. Due to their lack of driving experience, car insurance companies consider drivers under age 25 to be higher risk. So, young drivers are more expensive to insure.
The more expensive the vehicle is that you purchase, the more expensive your insurance will be, as well. But for an older car that’s less than $5,000, you may be able to cut your insurance costs down exponentially.
Once you choose your wheels, land the best price on car insurance with
Jerry
. Jerry is an insurance comparison app that shops for low prices with over 50 different insurance companies for free. You will get quotes in seconds, can make changes at any time, and if you ever have any questions, agents are just a text away!
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