Why is a driver's license required for a car on installment?
4 Answers
A driver's license is not necessarily required for a car on installment, but banks generally require it to be presented because banks usually only allow the borrower to take out a car loan to reduce the risk they bear. The materials required for a car loan are as follows: 1. Identity documents: Copy of the applicant's ID card; copy of spouse's ID card (not required if single). 2. Property documents: If no property is owned, a copy of a friend's property certificate can be provided as collateral or a guarantee company can be sought for a guarantee. 3. Proof of residence: Household registration or temporary residence permit. 4. Income documents: Including the original income certificate of the applicant and the original income certificate of the spouse. 5. Copy materials: Copy of the driver's license.
Requiring a driver's license for car loans is primarily a repayment safeguard consideration. As an ordinary car owner, banks or lending companies aren't charities—they need to ensure loan repayment. A driver's license proves you're a legal driver who can commute and potentially earn income using the vehicle to cover monthly payments. Without a license, the purchased car would sit unused, depreciating rapidly in the garage. How would you make payments if unemployed? This also ties into insurance—no license means no auto insurance, yet loan contracts typically require coverage against accidental losses. Overall, the driver's license serves as part of credit assessment; its absence creates excessive risk that banks simply won't accept.
I have to say that getting a car loan absolutely requires a driver's license—it's fundamentally a legal compliance issue. From a practical standpoint, a driver's license is the basic threshold for driving; without it, the car becomes scrap metal and can't legally hit the road. Lenders must protect their own interests—for example, if the buyer is caught driving without a license, the car could be confiscated, turning the debt into a total loss. The car's value is already depreciating, so if you can't even use it, the bank stands to lose big. Additionally, loans involve identity verification, and a driver's license helps confirm credit history and reduces fraud risks. So whether from a safety or economic perspective, this rule makes perfect sense.
Financing a car requires a driver's license, which I deeply understand from personal experience. A car is a tool that needs someone to drive it to realize its value and repay the loan. During loan approval, they assess whether you can use the vehicle normally to facilitate your life. A driver's license proves you're a responsible driver, likely with stable employment and income. What's the point of buying a car without a license? You can't drive it or be of any help, only adding more repayment pressure. Another relevant point is traffic regulations—laws clearly require a license to drive, and banks want to avoid any potential legal disputes.
