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Buying a car in the USA
It can be worthwhile to buy an American car for an extended stay in the USA. Learn how to purchase a car in the United States and what to look out for in the car-buying process.
- Staying in the USA: Buy or rent a car?
- Costs and effort of buying a car in the USA
- Requirements for buying a car in the USA
- The procedure of buying a car in the USA
- Where to buy a car in the USA
- Test drive the car
- Review the vehicle history (Carfax report)
- Independent vehicle inspection
- Negotiate the price with the car dealer
- Car purchase contract in the USA
- American certificate of title
- Car insurance in the USA
- Car registration in the USA
- Car license plates in the USA
- 10 tips for buying a car in the USA
- Buying a car in the USA: FAQ
Take the chance of living in the USA and apply for the official US Green Card Lottery!
Staying in the USA: Buy or rent a car?
Whether it makes sense to buy a car in the USA depends, above all, on the length of your stay. USA expatriates and car experts agree that buying is only worthwhile for three months or more extended stays.
This is because you have to put the cost of an American rental car in relation to the acquisition costs and bureaucratic effort involved in buying a car in the USA.
| Car rental or purchase in the USA? | |
|---|---|
| ESTA travelers with up to 90 days stay | rent |
| USA visitors with visas up to 6 months stay (e.g., visitor visa) | rent or buy |
| USA visitors with visas over 6 months stay (e.g., work visa) | buy |
| Green Card holders | buy |
Costs and effort of buying a car in the USA
If you want to buy and register a car in the United States, you'll need to learn about the American car market, understand the policies and taxes in your US state, and prepare a lot of paperwork for registration.
Expect the following hurdles on your way to owning a car in the US:
- If you don't want to buy a write-off, sales prices start at around $ 4,000, even for smaller older cars.
- In addition to the vehicle price, you will have to pay a Sales and Use tax of between 7.25 % and 10.25 % (depending on the city and municipality).
- You will need a credit history to buy a car in the USA unless you pay for the vehicle in full immediately.
- Not every vehicle purchased in the United States can be registered anywhere in the US. Depending on the state, there are different emission standards, vehicle age guidelines, and maximum allowable mileage.
- To register a car in the USA, you will need an American driver's license and a US mailing address.
Get several offers and do extensive research. The databases of US car experts Kelley Blue Book, U.S. News magazine's Best Cars rankings, and your local Department of Motor Vehicles (DMV) knowledge bases can help.
Requirements for buying a car in the USA
To buy a car in the USA, all you need is enough money or, in the case of financing, a good credit score, which the car dealer will inquire about in the so-called "credit check" with the help of your Social Security Number. However, major bureaucratic hurdles are waiting for you when registering the vehicle.
The procedure of buying a car in the USA
When buying a car in the USA, you will go through the following steps:
- Looking for cars and obtaining several offers
- Test drives
- Additional checks (vehicle documents, vehicle history, independent inspection)
- Price negotiation
- Signing the purchase contract
- Payment
- Vehicle registration with the DMV in your US state
Where to buy a car in the USA
The best place to buy a car in the USA is a DMV Licensed Dealer, as this is the only way you can expect help from the US authorities should you encounter any problems later on. Nevertheless, it is always worthwhile to compare prices beforehand via online platforms such as:
Getting multiple offers from different dealers as well as private sellers will give you a good feel for the market, your own negotiating leverage, and typical discounts and equipment bonuses.
Test drive the car
No car purchase without a test drive - this also applies in the USA! Adjust the driver's seat and mirrors, make sure you know the critical controls, and then take a few laps.
During your test drive, address the following questions:
- Are there any strange noises or vibrations?
- Are there any unusual smells in the vehicle?
- Do all switches, levers, and controls work?
- Do all headlights, wipers, power windows, windshield washers, as well as heating and air conditioning work?
- Is there any visible damage inside or out?
- Do tire size and tread match on all four tires?
- What does it look like under the engine hood?
Review the vehicle history (Carfax report)
After the test drive, check out the history of the car you're interested in. To do so, review all information on inspections, repairs, accidents, and mileage.
Often, the term "Carfax Report" is used here in the US, as the CARFAX company is a leading provider of used car histories. However, other companies' reports can also show a safe and defect-free vehicle and its history.
Car owner and lien status check
When checking the documents for a used car in the USA, be sure also to take a look at the certificate of title. If it is not in the seller's name, you shouldn't buy the car. Also, make sure there is no third-party lien.
Independent vehicle inspection
When you've found a car you'd like to buy, have an independent mechatronics technician take a look at it. They will search for accident damage or defects that may not appear on the Carfax report (for example, because they're new).
You should only forgo this vital step if you buy a factory-inspected car with a warranty. If a car seller refuses to allow the independent inspection, then something is probably wrong, and you should refrain from buying.
Negotiate the price with the car dealer
Have you found the American car of your dreams, but you're not happy with the price yet? Then you might be able to go into price negotiations with your car dealer. Talk about cash rebates, low-interest financing, or additional features.
Watch out for car tax!
Before buying a car in the USA, make sure whether or not taxes are included in the sales price. Some dealers collect taxes and registration fees along with the purchase price (this happens mostly with new cars) and forward the amounts to the appropriate offices. For used cars, the buyer is usually responsible for these payments.
Car purchase contract in the USA
If you are buying a car in the USA, you should insist on a detailed purchase contract. This should contain the following elements:
- Buyer and seller information
- Vehicle manufacturer
- Year of manufacture
- Vehicle type
- Chassis number
- Selling price
- Date of sale
- Signatures
For more tips on sales contracts and help with problems after a car purchase, visit the website of the U.S. Federal Trade Commission.
American certificate of title
A vehicle that has already been registered in the USA has a certificate of title (also "title" or certificate of ownership).
This registration certificate contains the chassis number, the license plate number, the current owner, and any existing liens. The "manufacturer's statement of origin" replaces the title for new vehicles.
Attention
If a vehicle does not have a certificate of title or statement of origin, do not buy it - no matter how good the price.
Car insurance in the USA
If you want to register a car in the USA, you need third-party liability insurance. As a foreigner, however, you will not only have to pay higher premiums, but you will usually also have to present a US driver's license.
It is best to have your car insurance in the USA recommended by a trustworthy broker who knows the insurance market well. You may also be able to take over the previous owner's low-cost car insurance. Ask about this possibility when negotiating the contract.
Car registration in the USA
Registering your car with the appropriate DMV involves some paperwork. Find out about the guidelines in your US state well in advance, get all the necessary forms and put together a folder with all the documents.
Generally, to register your car in the USA, you will need:
- Registration forms from the DMV (depending on your state)
- A US registration address
- An American driver's license
- A certificate of insurance (automobile liability insurance)
- Your vehicle purchase agreement
- Your Carfax report (or equivalent statement from another company)
- The vehicle title ("certificate of title" or just "title") or, in the case of new cars, the "manufacturer's statement of origin"
The cost of registering a vehicle varies by state, and the process can take several weeks. After successful registration, you will receive the "registration card" proving vehicle registration and also serving as proof of tax and insurance.
Car license plates in the USA
Whether you need new license plates after purchasing a vehicle in the USA depends primarily on your US state. In some states, license plates remain on a vehicle "for life," and in others, they are replaced when ownership changes.
10 tips for buying a car in the USA
Following these tips when buying a car in the US will make it almost impossible to go wrong on the road to your American dream car:
- Start searching for the perfect car on the internet before you go to the dealership.
- Get several offers.
- Find out the amount of tax and whether it is already included in the purchase price.
- Always call in an independent mechatronics technician to do a pre-purchase inspection.
- Negotiate the price and be aware of any liens.
- Make sure the seller and owner match.
- Allow several weeks from purchase to successful registration.
- Sign a formal written contract of sale.
- Get your US driver's license.
- Do not buy a vehicle without a "certificate of title" or, in the case of new cars, a "statement of origin."
Living in the USA
Do you have further questions about living in the USA? Then you will surely find what you are looking for in our USA guides:
Do you still have questions about buying a car in the USA? Then you are sure to find what you are looking for in our FAQ.
Buying a car in the USA is generally recommended for expats and visitors staying for more than three months. For short-term visitors, it may be cheaper to rent a car.
ESTA travelers with a stay of up to 90 days are recommended to rent a car, as buying a car for such a short period is usually not worthwhile.
To buy a car, you either need enough money or a good credit score for the financing. There are bureaucratic hurdles, especially when it comes to registering the vehicle, which requires a US driver's license and a US mailing address, for example.
The best place to buy your American car is from a DMV-approved dealer. Online platforms such as Edmunds, CarMax, Cars.com, DriveTime, and Enterprise Car Sales are useful for comparing prices.
Use services like Carfax to get a comprehensive vehicle history report that lists inspections, repairs, accidents, and mileage.
During the test drive, also listen for strange noises, vibrations, unusual odors, the operation of controls, lights, wipers, windows, and the general condition of the vehicle. Also, check the tire tread and take a look under the hood.
A detailed contract should include information about the buyer and seller, vehicle information, sale price, sale date, signatures, and other relevant terms. For more guidance, visit the Federal Trade Commission.
Yes, liability insurance is required to register a vehicle. Foreigners may have to pay higher premiums and usually need a US driver's license.
DMV forms, a US registration address, a US driver's license, proof of insurance, the vehicle's bill of sale, a Carfax report, and the vehicle's registration certificate are required for registration.
Whether new license plates are required depends on the state. In some states, the license plates remain on the vehicle for life, while in other states, new license plates are issued every time the owner changes.
