Why is a driver's license required for a car on installment?
2 Answers
Purchasing a car on installment does not necessarily require a driver's license, but most banks currently request to see one. This is because banks generally only allow the actual purchaser to take out an auto loan to minimize the financial risks they undertake. The required documents for an auto loan are as follows: 1. Proof of identity: A copy of the applicant's ID card; a copy of the spouse's ID card (not required if single). 2. Proof of property ownership: If the applicant does not own property, they can provide a copy of a friend's property certificate as collateral or seek a guarantee from a guarantor company. 3. Proof of residence: Household registration or temporary residence permit. 4. Proof of income: Includes the original income certificate of the applicant and the original income certificate of the spouse. 5. Copies of documents: A copy of the driver's license.
Currently requiring a driver's license for auto loans is primarily for risk control and contractual compliance purposes. As a financial advisor, I've seen numerous cases where lenders strictly verify the borrower's driving qualifications before disbursing funds, as this directly affects whether the vehicle can legally operate on roads. Banks' biggest fear is the collateral (the car) becoming worthless scrap metal - if you recklessly drive without a license and cause an accident resulting in total loss or impoundment by authorities, how will the loan be repaid? Additionally, insurance contracts inevitably involve driver's licenses, as financed vehicles typically require full coverage insurance, but unlicensed individuals cannot be registered as policyholders. I recommend ensuring your driver's license status is valid before applying for financing, otherwise it may lead to loan rejection or even affect your credit history.
