How to Buy a Car in the US as a New Immigrant
With little to no public transit in most areas, life in the United States practically requires owning a car. While renting a car is a smart idea for your first few weeks, it will be more cost-effective to buy one if you plan to stay long-term. Luckily, there are little to no additional requirements for recent immigrants to buy a car. That said, let’s take a look at a few important considerations you will want to think about before you begin your search.
Should I Buy a New Car or a Used Car?
New cars have their perks: you can customize them to your liking, have all the latest gadgets and safety measures, and know for certain that they have never been in an accident or had mechanical issues. However, you are going to pay a premium for these luxuries: in the US, new cars’ value depreciates around 20% the moment you drive it away from the dealership and continues to depreciate at a high rate for the first two to three years. Therefore, if you decide to sell your vehicle after only a few years, you will likely lose much money.
Pre-owned or used cars, on the other hand, will be much more affordable and depreciate less when you are likely to own them. In fact, you can sometimes sell a used car after a few years for close to the same amount you bought it for. Of course, you can’t be as sure a used car has been free from accidents or mechanical issues, and you won’t be able to customize anything before you buy it. Still, if you don’t have to have the latest model, buying a car around two to three years old is usually the smartest financial choice for most people.
Should I Buy From a Car Dealership or Private Seller?
Most likely, you will buy a car in the US in only one of two ways: from a dealership or a private seller. Car dealerships are licensed, independently owned resellers of new and used cars. In fact, it’s actually illegal to buy a new car directly from the manufacturer in the US! Dealerships can vary in size, but most will sell a variety of makes and models. Dealerships also offer financing, warranties, and even vehicle maintenance. Many dealerships do comprehensive inspections of used vehicles, giving you a bit more peace of mind than buying from a private seller. Finally, dealerships will take care of most of the paperwork for you, registering the vehicle and transferring the title into your name.
If you decide to buy a car from a dealership, make sure you compare several in your area, as they will often have different inventory and prices. Additionally, whereas most prices in the US are non-negotiable, car prices are different. You can and absolutely should negotiate the advertised or “sticker” price of any car at a dealership.
If you decide to buy a used car, you also have the option to buy from a private seller, the person who currently owns it. While a bit more complicated, it can save you a lot of money, as private seller prices are usually much lower than a dealer’s price for the same car.
To find cars for sale by private owners, check sites such as Cars.com or Autotrader.com. Use the Kelly Blue Book (kbb.com) to determine the fair market price for any car you find, and use Carfax (carfax.com) to see a complete history of the car, such as its title, mileage, previous ownership, accident reports, and whether it has been used privately or commercially. Never trust the private individual’s word — always do your own research! In fact, it’s a very wise idea to have a mechanic check out the car before you buy it.
When finalizing the purchase, make sure you get the following from the seller, as you will need them to prove ownership and register your vehicle:
- Title. This shows who owns the car. Ensure the owner owns the car outright and isn’t still paying off a loan. Also avoid any titles with the words “salvage,” “rebuild,” or “lemon,” which essentially mean the car has had a troubled past. You'll need your signature and the seller's signature on the title with the date.
- Bill of Sale. The bill of sale should list the car’s year, make, and model, its vehicle identification number (VIN), mileage, the sale price, date of sale, the names and addresses of both the seller and the buyer, and any additional guarantees the seller is making to you. Most often, it will only read “sold as is” to indicate that the seller has no responsibility for the car after you buy it. That’s why it’s so important to ensure the car is in good shape before you buy it!
- Emissions documents. Many states require cars to pass certain emissions tests, and sometimes there are even requirements for the seller to have done these tests within a certain window of time before the sale. Check with your state department of motor vehicles for requirements.
Bottom line: Buying from a dealership will always be easier. You can see many options at the same time, be more certain the car is in good shape, and avoid some annoying paperwork. However, it will often cost you. If you want to save money, feel comfortable spending a little longer to find the right car, and don’t mind a few more steps to register the car and transfer its ownership, you may want to consider the private seller route.