Car ownership for DACA and undocumented immigrants

Car ownership presents unique challenges for U.S. residents without documentation. If you don’t have a Social Security number, getting a driver’s license can be difficult in many states. Since June 15, 2012, the Deferred Action for Childhood Arrivals (DACA) has offered protection to specific non-citizens who entered the United States as children. DACA provides work authorization and allows eligible individuals to obtain a driver’s license. Bankrate’s insurance editorial team reviewed provisions in various states that allow DACA recipients and other undocumented individuals to get licensed to drive in the U.S. 

Getting a driver’s license as an undocumented immigrant

Nineteen U.S. states and Washington, D.C. have passed legislation permitting undocumented immigrants to get a driver’s license. The process still requires certain documents — such as a foreign passport — but it’s available to those without proof of lawful presence in the country. 

The requirements to obtain a driver’s license as an undocumented individual vary from state to state, but you’ll typically need to: 

• Provide proof of your identity
• Provide proof of your residence in the state
• Pass any knowledge, vision and/or physical tests required to drive in the state
• Pay any mandatory licensing fees 

Always check your state’s specific laws to understand the options available to you. We’ve provided links to resources by state to help you get started in your search.

License restrictions for undocumented immigrants

Any license for undocumented immigrants will not be valid for federal or REAL ID purposes, such as flying or voting, as of May 7, 2025. But some states have additional restrictions on driver’s licenses for those who cannot prove they are a U.S. citizen. 

Driver’s licenses for undocumented immigrants — known as driver privilege cards in some states — may not function as legal IDs. Be sure to check your state’s laws to understand the privileges and functions associated with your license. 

Some states have additional requirements. For example, Utah S 227 establishes that unauthorized immigrants may have a valid driving card for just one year. Virginia law allows drivers to retain privileges through their second birthday after issuance. Maryland’s restricted driver’s license prohibits recipients from purchasing a firearm.

Buying a car as an undocumented immigrant

Purchasing a new vehicle can be a significant financial undertaking, whether you’re opting for a brand-new model or a used one. An auto loan is often a valuable solution, but applicants must meet specific criteria to qualify.

For many transactions, including buying a car, lenders typically request an SSN to confirm your identity and conduct a credit evaluation. This can present a challenge for undocumented individuals who might not possess the necessary details. However, certain lenders or car companies might accept an Individual Taxpayer Identification Number (ITIN) as an alternative. An ITIN allows individuals to file taxes irrespective of their immigration status and might replace a Social Security number in various scenarios, depending on the institution’s policies.

Another scenario that could potentially pose some problems is that many DACA recipients, being relatively new to the credit system, might face challenges in securing loans due to limited credit history. Therefore, for better auto loan rates and financing opportunities, it could be helpful for both undocumented individuals and DACA recipients to focus on enhancing their credit scores, ensuring they present a solid credit standing when applying for loans. Always explore your options and consult with different companies, as requirements and offerings can differ.

Loan options for undocumented immigrants

Once you have found the vehicle you want, it is time to sign on the dotted line. If you do not have the funds to pay in total upfront, there are still several options to finance your new car with an auto loan.

• Dealership financing: The dealership is likely to push its in-house financing if you need an auto loan. This may be a convenient fit, but it’s a good idea to shop for financing rates to be sure that you are getting a better rate for your new car.
• Direct online financing: An online lender may be a better fit for those seeking more approachable credit requirements.
• Credit unions: A credit union is another option to pay for your new car. Credit unions can offer low-interest rates and excellent incentives for their members that can be hard to beat elsewhere.
• Personal loans: A personal loan could also help you finance your vehicle. It enables you to bypass the down payment requirement with a flexible loan option. If you choose an unsecured personal loan, your lender won’t hold your new car as collateral. However, since your car is not collateral, the rates are likely to be higher than a secured loan.

Tips for finding cheap cars for undocumented immigrants

Finding an affordable car is important for many, especially undocumented immigrants who may have budget constraints or not have the adequate credit profile for a car loan. While searching for cost-effective vehicles, it’s crucial to stay informed and be wary of potential pitfalls in the buying process. Here are some general guidelines to help you find an economical car and ensure a smoother transaction:

1. Research is key: Before heading to a dealership, do some online research. Websites that list used cars can give you an idea of the price range for the type of vehicle you’re interested in.
2. Understand the total cost: Beyond the car’s price, there are additional fees to consider. These can include processing fees, licensing fees, title and registration fees. These added costs can accumulate, pushing your final bill beyond your budget. Be sure to ask about all associated charges before finalizing your purchase.
3. Beware of sales tactics: Car salespeople have a range of tactics to persuade buyers. One common method is the rushed sell, where they’ll pressure you to make a decision before you leave the lot. It’s essential to stand your ground and not feel obligated to buy immediately. Take your time, think about the offer and perhaps consult with someone you trust.
4. Consider bringing a friend: If you’re not fluent in English or are unfamiliar with car-buying norms, consider bringing a friend to help navigate the process, provide translation if necessary and offer a second opinion.
5. Hidden fees and add-ons: Some dealers might introduce extra products like extended warranties or add-ons like rust-proofing. While some of these might be beneficial, always consider whether you genuinely need them and if they fit within your budget.
6. Negotiate: Don’t hesitate to negotiate the price. If you’ve done your research, you’ll have a better idea of what’s a fair price for the car you’re interested in. It might feel uncomfortable, but it’s a standard part of the car-buying process.

Getting car insurance as an undocumented immigrant

Buying auto insurance can present challenges for undocumented immigrants. Typically, insurance companies prefer to provide policies for those with valid driver’s licenses and a traceable driving record. However, a person with DACA status and a valid license generally has an easier time securing coverage.

When purchasing car insurance, many providers ask for a Social Security number to verify your identity and assess creditworthiness. If you lack an SSN, there are still some insurance companies willing to accommodate you, though they might request an upfront deposit. 

If your state issues driver’s licenses to undocumented residents, any auto insurance company in the state should be able to provide you with an insurance policy. You may want to ask a licensed insurance agent for assistance. If your driving history in the United States is limited, some insurers may take your driving history in another country into consideration. 

How to get cheap car insurance as an undocumented immigrant

Undocumented drivers face unique hurdles when trying to buy affordable car insurance. Traditional avenues for obtaining insurance can sometimes be less accessible due to the absence of a Social Security number or other documentation. Regardless, having valid car insurance is vital, both legally and for personal protection against potential mishaps. Fortunately, there are some strategies tailored to help undocumented individuals navigate this process.

Tips for finding cheap car insurance for undocumented immigrants

If you are an undocumented immigrant, there are some tips you can use to potentially help lower the cost of car insurance premiums each month.

• Research insurance providers: Not all insurance companies are familiar with or open to insuring undocumented drivers. Talk to a licensed insurance agent in your community to find an insurance carrier that may be more experienced with this situation.
• Use an ITIN: While you might not have a Social Security number, many undocumented immigrants can obtain an Individual Taxpayer Identification Number (ITIN). Some insurance providers accept this as an alternative.
• Maintain a safe driving record: A clean driving record can significantly reduce your premiums. Drive cautiously and adhere to all traffic laws to avoid tickets or violations.
• Inquire about payment plans: Some insurance providers might offer flexible payment plans tailored for individuals with limited documentation.
• Bundle services if possible: Even if you’re undocumented, if you have other insurable interests, like a rented apartment, try to bundle your insurance policies with the same carrier. Most insurers offer a decent discount for doing this.
• Stay informed on legal changes: Legislation related to undocumented immigrants can change. Stay updated on any new laws or provisions that might make the process of obtaining insurance easier.

The bottom line

Navigating the path to car ownership for DACA recipients and undocumented immigrants in the U.S. can be intricate, but it’s not impossible. The absence of a Social Security number might pose challenges, especially when seeking financing or insurance. However, obtaining a valid driver’s license is a critical step. 

While the journey might be riddled with obstacles, it’s essential to remember that resources and avenues exist to facilitate the process. By staying informed, leveraging available options and persisting through challenges, the goal of owning a car and experiencing the freedom it offers could become increasingly reachable.