International Students Buying Cars: What You Need To Know

International students living in the United States may find it necessary to buy a car, especially if they don't live with a host family or near a city bus route. While buying a car as a non-US citizen is possible, the process is more complicated. International students will need to meet minimum eligibility criteria, which can include providing a good credit score and proof of ability to pay. Most international students will need to pay for their car in cash, as many banks will not offer auto loans to non-citizens.

International students can buy new or used cars from dealerships or individual sellers

When it comes to financing, international students may face some challenges. While some banks and dealerships offer financial plans tailored to students or first-time buyers, most banks will not provide auto loans to non-US citizens. International students can explore immigrant-friendly loan options, such as personal loans, or companies like Stilt, which specializes in low-interest loans for non-US citizens. Additionally, a sizable down payment can help reduce interest rates and monthly payments. It is recommended to contact potential lenders and auto insurers to determine their requirements, as a Social Security Number or credit history may be needed.

When purchasing a car, there are various expenses to consider beyond the purchase price. These include insurance, maintenance, registration fees, and fuel costs. International students should budget and calculate all potential costs to ensure they can comfortably afford a car. It is also essential to gather the necessary paperwork, such as title transfer forms, registrations, and insurance for the vehicle, and to review local laws and regulations to avoid legal issues.

International students can find used cars for sale through various sources, including bulletin board notices on campus, online search websites like AutoList, classified websites like Craigslist, and local publications. Car dealerships also offer both used and new cars, and resources like Kelly's Blue Book and Edmunds can help with cost analysis. When buying from a dealership, they will guide you through the registration process, whereas buying from a private individual will require registering the car through the Department of Motor Vehicles (DMV).

Foreign nationals may face issues when applying for auto loans

Foreign nationals, non-US citizens, and international students can buy a car in the US, but they may face issues when applying for auto loans. While it is possible for foreign nationals to get auto loans in the US, the process is more complicated and lengthy than it is for US citizens. Most banks and traditional credit institutions do not offer auto loans to non-US citizens due to the perceived risk involved. This is mainly because newcomers to the US do not have a local credit history, which is the primary factor that lenders consider when determining creditworthiness.

As a foreign national, you may be required to provide a higher down payment to qualify for a loan or get lower interest rates. The down payment depends on the type of car and is generally lower for new cars than for used cars. You will also need to provide the lender with your visa to verify how long you intend to stay in the US. If your visa is expiring soon, lenders will likely not approve your loan.

To apply for an auto loan as a foreign national, you will need to submit a range of documents, which may include:

• A Finance Qualification Form or Credit Application Form, which requests information about your employment, living arrangements, and financial situation in the US.
• Proof of income, such as current pay stubs or recent W-2 forms, or an Employment Letter confirming your salary, benefits, and term of employment.
• Documents proving that you are "lawfully present" in the US, such as a driver's license, passport, Social Security Card, Permanent Resident Card, or Visa with a legible entry stamp.
• An Individual Taxpayer Identification Number (ITIN), which is required even if you are not a US taxpayer.
• An automobile insurance binder, which is mandatory to take delivery of your vehicle.

It is important to note that the required documents may vary from state to state and from institution to institution. Therefore, it is recommended to collect as many of the commonly requested documents as possible. Additionally, working with an expat car financing, leasing, and purchasing company can make it easier and less expensive to obtain an auto loan as a foreign national.

International students need to obtain a US driver's license

International students can buy a car in the US, but they may face some challenges, especially if they require financing. While it is possible to obtain a loan as a non-US citizen, it can be difficult without a credit score. Some banks may offer auto loans to foreign nationals, but most will not.

Before buying a car, it is important to consider the costs of insurance and parking permits. US law requires all drivers to have insurance, and some states require auto insurance to apply for a driver's license. International students may also need to purchase a parking permit to park on campus.

To obtain a US driver's license, international students should follow these steps:

• Wait at least 10 days after arriving in the US before applying for a license. This ensures that all information is updated in the government systems, avoiding delays or denials.
• Talk to a designated school official (DSO) for guidance and to answer any questions. DSOs act as liaisons between international students, the school, and the US government, providing important immigration forms and maintaining records.
• Locate the nearest DMV office and check transportation options. Some schools may provide transportation to the DMV.
• Gather all required documents, including original copies of your passport, student visa, proof of residence, and driver's license from your home country (if applicable). If your foreign driver's license is not in English, you will need a certified English translation.
• Visit the DMV office in person and submit your application. A DMV representative will explain the next steps, which may include a driving and written test.
• Depending on the state, you may receive your license immediately or after a few weeks by mail.

Auto insurance is required for all drivers in the US

International students and expats in the US often come to the conclusion that they need a car. While buying and driving a car in the United States is possible for foreign nationals, the process is a little more complicated. One of the most important steps in the process is acquiring auto insurance, which is required for all drivers in the US.

Auto insurance is mandatory in almost every state, with New Hampshire being the only exception. In some states, you will not be able to apply for a driver's license without auto insurance. While the minimum requirement is third-party insurance, it is recommended that you add on full coverage. This is especially true if you are leasing or financing your car, as your lender may require you to carry full coverage.

There are several types of car insurance coverage, and the requirements vary by state. Nearly all states have minimum requirements for liability coverage, which helps pay for any injuries or damages you cause in a car accident, including those of the other driver and their passengers. About half of all states require uninsured/underinsured motorist (UM/UIM) coverage, which helps cover the cost of injuries to you and your passengers, as well as damage to your car and other property, if you're hit by a driver with little or no insurance. Personal injury protection (PIP) is typically only needed in no-fault states, but a few at-fault states require it as well. Medical payments coverage goes toward medical expenses due to injuries from a car accident and covers you, your family, or your passengers. Comprehensive and collision coverage are optional and pay for damages to your car due to fire, theft, vandalism, animal strikes, acts of nature, glass breakage, and collisions.

In addition to the type of coverage, the amount of coverage you need is also important. While the state minimums will keep you out of trouble with the law, it is wise to increase your liability limits beyond this to protect your assets in case of a serious accident. Maintaining medical payments and UM/UIM coverage will also ensure that you are financially protected against medical expenses and drivers who lack sufficient insurance.

When it comes to purchasing auto insurance as an international student, there are a few things to keep in mind. Firstly, you will need to gather all the required documents, which may vary from state to state and institution to institution. This will likely include a Finance Qualification Form, as most international students do not have a credit history in the US. Additionally, there are limited financial institutions in the US that will provide auto loans for international students, so you may need to explore alternative options, such as companies that specialize in loans for non-US citizens.

International students should research the fair price of a car before making a purchase

International students in the United States may find it necessary to buy a car, especially if they need to get around and public transportation is not a viable option. While it is possible for international students to purchase a car in the US, there are several factors to consider before making a purchase. One crucial aspect is determining the fair price of a car to ensure you get a good deal.

When buying a car, it is important to do your research and understand the key pricing terms. The sticker price, or the MSRP (Manufacturer's Suggested Retail Price), is the amount the salesperson wants for the car but is usually higher than what you should pay. The invoice price, on the other hand, is what the dealership paid the manufacturer, and any amount above this is considered profit for the dealer. By knowing these terms, you can negotiate a better deal and avoid paying more than necessary.

To find the fair price of a car, there are several resources you can use. The Kelley Blue Book, for example, allows you to calculate the taxes on top of the list price and includes a reasonable dealer profit. Edmunds is another resource that can help you find current incentives and factory-to-dealer incentives, which are not always advertised to potential buyers. Additionally, you can request quotes from different dealerships and compare prices to get an idea of the market rate for the car you're interested in.

When determining your budget, it's important to consider the additional fees associated with buying a car. These can include government, state, and dealership fees, as well as the cost of a parking permit if you plan to park on campus. By understanding these extra costs, you can set a realistic budget for yourself and avoid overspending.

In conclusion, international students should take the time to research the fair price of a car before making a purchase. By understanding pricing terms, using resources like the Kelley Blue Book and Edmunds, comparing prices from different dealerships, and considering additional fees, students can make an informed decision and get the best value for their money.

Frequently asked questions