Douglas Olsen
International students often face transportation challenges, especially when public transportation is inaccessible. Owning a car can provide ease and flexibility in getting to school or work and exploring a new city or state. However, the process of buying or leasing a car can be intimidating and involves several considerations. International students need to research the legal requirements of their host country, including eligibility for a driver's license, which may require written and practical driving tests. When purchasing a car, students must evaluate their choices, understand the associated costs such as insurance, maintenance, registration fees, and fuel, and make a well-informed decision. Leasing a car can be a more cost-effective option for short-term stays, but it is important to understand the lease terms and associated costs. Additionally, international students should familiarize themselves with local laws, driving rules, and requirements for documentation, such as keeping relevant driving and car-related documents in the car at all times.
| Characteristics | Values |
|---|---|
| International student buying a car | Can be a good option if you don't live with a host family or close to public transport |
| International student driving license | May be allowed to drive with an international driving permit (IDP) or your home country's license for a limited period |
| International student car insurance | Collision (or comprehensive) insurance is not required but is strongly recommended |
| International student car financing | Dealerships and banks may offer financial plans tailored to students or first-time buyers |
| International student car options | New or used cars are available, with used cars being cheaper but requiring more thorough research |
| International student car expenses | Insurance, maintenance, registration fees, and fuel costs are all expenses to consider when budgeting for a car |
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What You'll Learn
International student driving laws and eligibility
International students in the US who want to drive will need to apply for a driver's license in the state they reside in. The eligibility criteria and application process vary from state to state. However, there are some common requirements and steps that international students should be aware of.
Firstly, it is important to wait at least 10 days after arriving in the US before applying for a driver's license. This is because the Form I-94, or "Arrival/Departure Record," needs to be updated in all government systems. This form shows your travel history, including arrival and departure dates, and is crucial for driver's license approvals as it indicates how long a foreign applicant intends to stay in the country.
Next, you must gather the required documents, which may include:
- A valid passport and your most recent student visa (some countries are exempt from this requirement, such as Canada and Bermuda)
- Form I-94 (if issued) or I-94 printout (if issued electronically)
- Form I-20, "Certificate of Eligibility for Nonimmigrant Student Status"
- Proof of residence, which can vary by state and may include a rental agreement, bank statement, paycheck stub, current license or ID, vehicle registration, auto insurance card, or utility bill
- Social Security Number (SSN) or a denial letter, depending on the state requirements
- Enrollment Verification Letter from the Office of Records and Registration, if required by your state
After gathering the necessary documents, you should visit your local Department of Motor Vehicles (DMV) to submit your application and required fees. The DMV may use the Systematic Alien Verification for Entitlements (SAVE) Program to verify your nonimmigrant student status and determine your eligibility for a driver's license.
In some cases, you may be required to pass both a written and a driving test to obtain your license. The written test will assess your knowledge of local driving laws, signs, and procedures related to accidents and emergencies. The driving test will involve taking a short drive with an instructor and following their directions. If you already have a driver's license from your home country or another state, you may be exempt from these tests, but this varies depending on the state.
Once you have obtained your driver's license, you can legally drive and purchase, rent, or lease a car in the US. However, it is important to consider the various expenses associated with car ownership, including insurance, maintenance, registration fees, and fuel costs. Budgeting and careful planning are essential to ensure you can comfortably afford a car and its associated costs.
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Buying new vs. used cars
As an international student, you may face challenges with transportation, especially when public transportation is inconvenient or inaccessible. Before purchasing a car, it is essential to consider the associated costs, such as insurance, maintenance, registration fees, and fuel. Owning a car involves more than just the purchase price, so budgeting and calculating all potential expenses are crucial.
Now, let's delve into the pros and cons of buying a new versus a used car.
Buying a New Car
New cars offer modern features, warranties, and often lower interest rates on financing. Manufacturers like Toyota and Honda frequently provide deals with low to zero-percent interest rates. When you buy new, you become the car's first owner, and you won't have to worry about prior wear and tear. New cars also come equipped with the latest safety features and technology, providing peace of mind. Additionally, new cars are typically more fuel-efficient and environmentally friendly compared to older models.
However, one of the significant trade-offs of buying a new car is the bigger price tag. New cars usually have higher upfront costs than used cars. They also tend to lose value more quickly, especially during the first few years of ownership. This rapid depreciation can result in a higher loss when selling or trading in your vehicle. Moreover, new cars often come with higher insurance premiums.
Buying a Used Car
Used cars typically offer a significant cost advantage, making them an attractive option for students on a tight budget. According to Experian's report, the average monthly loan payment on a used car was $533, compared to $726 for a new car. Used car insurance is generally more affordable, especially if you include comprehensive and collision coverage.
However, when buying a used car, thorough research is imperative. Factors such as the year of manufacture, mileage, and condition significantly impact the car's value. Websites like Kelley Blue Book can assist in comparing prices and evaluating the vehicle's condition. Used cars may also require higher maintenance costs, as they are more likely to need repairs to stay in good condition.
In summary, the decision between buying a new or used car depends on your budget, reliability requirements, and personal preferences. If you prioritize modern features, lower maintenance costs, and the latest safety technology, a new car may be preferable. On the other hand, if affordability is your primary concern, a used car might be a more suitable option.
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Auto loans and insurance
International students can apply for auto loans and insurance in the US, but the process can be complex. Auto loans are a good option for financing a vehicle, and international students are eligible for many loans in the US. However, some lenders will not lend to non-US citizens, so it's important to research lenders that cater to international students. Auto loans are preferable to personal loans, as they have lower interest rates and better payment plans. Services for international students looking to get an auto loan do exist, and many of these companies take into account academic information such as your GPA and enrollment status, financial information, and personal information when evaluating your eligibility.
When it comes to auto insurance, there are a few things to keep in mind. Firstly, confirm your license details. Establish which license type you plan to use: your country's driving license, an IDP, a regular state driver's license, or a noncitizen US license. If you don't have a license, you can apply for one, but it's recommended to take driving lessons first, as they are compulsory in many countries, including the US.
Secondly, consider the factors that influence insurance rates. Age is a significant factor, with drivers under 25 paying more than older drivers. Additionally, your driving record, location, type of car, and credit history can all impact your insurance rate. If you don't have a US credit history, some insurance companies may consider your driving history and experience in your home country, so be sure to ask about this.
Lastly, remember that insurance companies often offer discounts when you buy more than one type of policy from them, a practice called "bundling." For example, you might be able to save money by getting renters and auto insurance from the same insurer. You can also consider a higher deductible to lower your premium.
It's important to get an insurance quote before purchasing a car, as the cost of insurance can significantly impact your budget. Additionally, while it's not required to have insurance to test drive a car, some dealerships may ask for it, so be prepared to walk away if they won't let you test drive without insurance.
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Car maintenance
Firstly, it is important to understand the basics of what your car needs and when to perform routine maintenance. Refer to your vehicle's maintenance schedule and service interval record in your owner's manual. This will outline auto maintenance requirements such as oil changes and tire rotation. It will also recommend inspection schedules or parts replacement when the odometer reaches certain milestones, such as 30,000, 60,000, and 90,000 miles.
Secondly, there are some basic maintenance tasks you can learn to avoid costly repairs. These include checking oil levels, checking tire pressure, and replacing windshield wiper blades. You should also regularly check your fluid warning monitor and fill the washer fluid tank monthly or when alerted by the warning light. Additionally, it is important to understand your car's warning lights, which are outlined in your car manual.
Other items with significant safety purposes, such as brake pads, should be checked routinely and replaced when necessary. You should also visually inspect your tires often, checking the pressure monthly and before long trips or carrying extra loads. Don't forget to check the spare tire as well.
Finally, it is recommended that you have your car inspected by a qualified mechanic at least every 12 months to identify any problems and keep the engine running as it should.
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Budgeting for expenses
Insurance
Insurance is a significant expense for car owners and can vary depending on age, driving history, location, and other factors. It is recommended to get an insurance quote before buying a car to factor this into your budget. Collision or comprehensive insurance is not mandatory but is strongly advised, as it covers your expenses in an accident that is your fault.
Maintenance
Regular maintenance is necessary to keep your car running smoothly and avoid costly repairs. Learning basic maintenance tasks like checking oil levels and tire pressure is beneficial. When buying a used car, it is advisable to get an inspection from your mechanic to ensure you don't purchase a vehicle with underlying issues.
Registration Fees
Registration fees are part of the costs of owning a car. Dealerships and banks may offer financial plans tailored to students or first-time buyers, so it is worth exploring these options and comparing interest rates and terms.
Fuel Costs
Fuel costs can vary depending on the fuel efficiency of your car and the current fuel prices. When choosing a car, consider prioritising fuel efficiency, especially if you are a student on a limited budget.
Purchase Price
The purchase price of the car is a significant expense. You may choose to buy a new or used car, each with its advantages and disadvantages. New cars offer modern features, warranties, and often lower interest rates, while used cars are typically cheaper. However, when buying a used car, it is crucial to research the year of manufacture, mileage, and condition to determine its value and avoid costly surprises.
In conclusion, budgeting for all these expenses will help you make an informed decision that aligns with your financial goals and lifestyle as an international student.
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Frequently asked questions
It depends. If you live with a host family or close to a city bus route, you might not need a car. However, if public transportation is inefficient or expensive, or if your daily commute is challenging, then getting a car might be a good option.
There are many costs to consider when owning a car, including the purchase price, insurance, maintenance, registration fees, and fuel costs. It is important to budget and calculate all potential costs to ensure you can afford a car comfortably.
One common way to finance a car is through an auto loan, which can help spread the cost of the car over several years. However, auto loans often come with high-interest rates, especially if you don't have established credit or an extensive payment history. Some dealerships and banks offer financial plans tailored to students or first-time buyers, so it is worth comparing interest rates and terms carefully before committing.
New cars come with modern features, warranties, and often lower interest rates on financing. You also get peace of mind as the first owner and don't have to worry about previous wear and tear. Used cars, on the other hand, can be significantly cheaper, but it's important to do thorough research on factors like the year of manufacture, mileage, and condition of the car.
It is important to learn the rules of the road and drive carefully, especially in poor weather conditions. You should also know what to do in case of an accident, including assessing damage, contacting local authorities, and informing your insurance provider.
