Leasing A Car As An International Student: Is It Possible?

International students wanting to lease a car in a new country may face several challenges, including a lack of credit history and difficulties providing proof of their ability to pay. However, some car companies and dealerships offer special programs to help international students lease a car. These programs often include additional benefits such as maintenance and insurance. It is important for international students to carefully consider their options and be aware of the potential obstacles and requirements when leasing a car in a new country.

Leasing a car as an international student without a credit history

Leasing a car as an international student in the US can be challenging due to the lack of a credit history, which is often a crucial factor in demonstrating financial responsibility and ability to make timely lease payments. However, there are several ways to navigate the leasing process even without a credit history.

Firstly, some leasing companies offer special programs or options tailored to individuals with limited credit history, including international students. These programs may have alternative eligibility criteria and may require additional documentation or higher upfront payments. It is important to conduct thorough research to identify reputable leasing companies and dealerships in your area that offer such programs.

Secondly, having a co-signer with established credit in the US can significantly increase your chances of approval for a car lease. A co-signer, typically a family member or close friend, agrees to take responsibility for the lease payments if you are unable to pay.

Thirdly, some dealerships may be willing to work with international students by requiring a larger security deposit upfront. This acts as collateral and can help offset any potential losses for the dealership due to the limited credit history.

Additionally, international students can take proactive steps to build their credit history while studying in the US. This includes applying for a secured credit card, making small purchases, and consistently paying off the balance in full and on time. Responsible credit usage can gradually improve their credit score and increase their eligibility for car leases.

It is worth noting that, in addition to credit history, international students may also need to provide official documentation to prove their identity, legal status, and ability to operate a vehicle safely when leasing a car. Obtaining auto insurance before leasing a car is also recommended, as it is typically required by leasing companies and state laws.

International student car leasing programs

Leasing a car as an international student in the United States can be challenging due to credit score and ability-to-pay requirements, which are dependent on your history in the country. However, there are leasing programs and other options specifically designed to help international students secure a vehicle.

International AutoSource (IAS)

International AutoSource (IAS) offers factory-backed financing programs with flexible payment options and low rates designed for quick and easy approval. IAS helps international students secure vehicles before relocating to the U.S., ensuring a smoother transition to school or work. They provide special pricing and financing options, including their low-cost, all-inclusive rental program, ReadyDrive. IAS has helped over 50,000 internationals, many of them students, get settled in the U.S.

Volvo Cars San Francisco

Volvo Cars San Francisco offers an international student lease program with simple eligibility requirements that do not depend on a U.S. credit history. The program includes standard factory-scheduled maintenance and industry-leading insurance. At the end of the lease, you can simply return the car to your nearest Volvo dealer.

Audi Downtown LA

Audi Downtown LA offers financing for foreign students enrolled in U.S. colleges or universities through AFS. The requirements include enrolment confirmation, bank statements, and documentation of fund stability. Lease maturities are limited to the anticipated graduation date as stated on the I-20 form.

Buying a Car

If leasing requirements pose a challenge, buying a car may be a more feasible option for international students. While purchasing a car requires a loan, it may be easier to obtain one compared to a lease, especially with no credit history. Buying a car provides freedom from restrictions and long-term savings. Additionally, with a purchased vehicle, you are free to drive it for as long and as far as you want, making it ideal for road trips.

Pros and cons of leasing a car as an international student

Leasing a car as an international student has its advantages and disadvantages. Here are some pros and cons to consider:

Pros:

• Lower monthly payments: Leasing a car generally involves lower monthly payments compared to buying a car with a loan. This is because you are only paying for the portion of the car's value that you use during the lease term, which is typically three years or less.
• Drive a newer car: Leasing allows you to drive a newer, more expensive car that you might not otherwise be able to afford. You can enjoy the latest models with advanced features and safety technologies.
• No long-term commitment: With leasing, you are not tied down to a vehicle for the long term. This can be beneficial if you are an international student with a limited time in the country.
• Predictable costs: Leasing offers predictable monthly payments and ownership costs. You don't have to worry about unexpected repairs as the car is typically covered by a warranty.
• No resale hassle: When the lease ends, you can simply return the car. You don't have to go through the hassle of selling it or worrying about fluctuations in its trade-in value.

Cons:

• Credit score and history requirements: One of the biggest challenges for international students is meeting the credit score and history requirements for leasing. Lenders may require a good credit score and proof of stability and ability to make payments.
• Mileage restrictions: Leasing contracts usually come with mileage restrictions, and you may be charged additional fees if you exceed the agreed-upon mileage. This may not be suitable if you plan to go on long road trips or extensive driving.
• Wear and tear: Leasing companies may charge additional fees if the car shows more wear and tear than what is considered "normal" during the lease term.
• No ownership: At the end of the lease, you don't own the car. You will need to return it or lease another one, resulting in continuous payments.
• Less flexibility: Leasing may offer less flexibility if your circumstances change and you need to adjust your car payment or get rid of the car altogether. Breaking a lease early can result in significant fees.

Eligibility criteria for international students to lease a car

International students can lease a car, but there are eligibility criteria to be met. The requirements and how difficult it is to lease a car as an international student can vary depending on location and dealership.

Credit Score and Payment Ability

One of the biggest obstacles facing international students is providing a good credit score, especially if they don't have a Social Security Number (SSN). Credit scores and the ability to pay are dependent on an individual's history in the country. Some dealerships may require copies of three months of bank statements or other documentation that proves stability of funds.

Visa

An individual can only lease a car for the length of time left on their visa. For example, if you have 24 months left on your visa, you can only lease for those 24 months. Lease contracts are typically between 33 and 42 months, so your visa must cover this length of time.

Driving Licence

To lease a car, you will need a valid driver's licence. In some locations, an International Driving Permit and foreign driver's licence or equivalent is required.

Education Status

Some dealerships require proof of college enrolment status and the date enrolled. This can include confirmation from the school of the anticipated graduation date.

Insurance

Leasing a car will require both comprehensive and collision coverage, which can be expensive. Some leasing programs include insurance.

Alternatives to leasing a car for international students

International students can face several challenges when trying to lease a car. These may include providing a good credit score, proof of residence, an international driver's license, and insurance coverage. However, there are alternative options for international students who cannot or do not want to lease a car. Here are some alternatives:

Renting a Car

Renting a car can be a good option for international students who do not need a vehicle for an extended period. It offers flexibility and removes the burden of ownership, such as monthly payments and costly repairs. Additionally, renting allows students to choose the right vehicle for their specific needs, whether it's a sedan for a day trip or a larger vehicle for moving.

Buying a Used Car

Purchasing a used car can be more cost-effective than leasing a new one. Used cars are typically cheaper, and students with limited credit history may find it easier to obtain a loan for a used car. However, it is important to research and buy from a trusted source when considering a used car.

Taking Out a Loan

International students who meet the eligibility criteria can consider taking out a loan to buy a car. While loans may require a down payment, they offer lower credit requirements than leasing. Additionally, students can choose any vehicle they please and are not restricted by mileage limits or wear and tear fees associated with leasing.

Ride-sharing or Public Transportation

Depending on the location of their studies, international students may opt for ride-sharing services or use public transportation to get around. These options can be more cost-effective and convenient than leasing or owning a car, especially in areas with well-developed public transit systems.

Student Discounts and Programs

Some car dealerships and manufacturers offer special programs or discounts for international students. For example, Audi Downtown LA provides financing options for foreign students enrolled in U.S. colleges or universities. Students can also explore factory-backed financing programs with flexible payment options and low rates designed for quick approval.

Frequently asked questions