Does the Person Financing a Vehicle Have to Be the Primary Driver?

The person financing the purchase of a vehicle doesn't have to be the primary driver. The person financing the loan is simply the one who owns the vehicle and takes on the contractual obligations outlined in the loan agreement. Primary driver considerations are more important to auto insurers.

Primary Driver Basics

The primary driver is the person who uses a vehicle most often. Car insurance providers ask about the primary driver when you arrange coverage on a new vehicle. Many insurers build car rates by matching vehicles with the primary driver. Vehicles are usually classified as "commuting," for work use, or for pleasure use.

Financing Basics

Most buyers finance car purchases just as they do homes. These are typically the two most expensive major purchases people make. Financing a car means getting a loan from a third-party bank or lender, or getting financing directly through the dealership. When you purchase your vehicle, you either inform the dealer that you have a pre-approved loan through another lender or you ask the dealer to explore financing options through its lender network.

Loan to Driver

The person financing a vehicle is simply the buyer. Couples, or more than one person, can jointly buy a car and get an auto loan. However, the car's buyer becomes its owner. The owner can drive the car, let someone else drive it, or park it in the garage and never drive it. The dealership and lender are only concerned that you can repay your loan. Insurers want to know the primary driver to understand the risks associated with insuring the vehicle.

Dealer or Third Party

Jamie Page Deaton points out in her June 2009 Yahoo! Finance article, "How to Finance a Car and Get a Car Loan," that many car buyers falsely assume dealers always have the lowest loan rates. This is not always the case. Deaton suggests buyers go car shopping with a loan approval in hand to compare against the rates offered by the dealer's lenders. "Buy Here Pay Here" is relatively new lender financing alternative whereby the dealer reviews your credit upfront before shopping for cars that meet your buying potential.