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Old 24th September 2015, 23:22   #16
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Default Re: Guide: First-time car ownership in the USA

One more on the Car Buying front.

There is a program supported by many manufacturers to aid Expats travelling to the US for the first time. And there are agencies who act as a bridge between the manufacturer and the person.

One such agency (http://www.intlauto.com/) was arranged by the company I work for as part of my relocation package when I was relocated from Japan to the US. I had a pleasant experience with them. They provided me with as many quotes as I wanted for any configuration of the car I asked for. Quotes were based off the MSRP - Military discounts (I still could not figure out how they managed to apply the military cash). Once I zeroed on one, I paid $500 ( which they adjusted from the price of the car ) to lock the car. They arranged the delivery at a local dealership about a month later after I landed in the US considering the time I will take to obtain a driver's license.

They arrange the financing mostly from the manufacturer itself. Like for my case, I had decided on a Audi Q5 and I had an option to choose from Buying or Leasing with competitive interest rates. (They offered me 3~% for Buying and 4~% for leasing from VW finance)

They arrange for car insurance as well as again was at a very competitive price. I still continue the insurance and after 3 years in US, my friends still pay ~200$ more for 6 months than mine for the same coverage.

One more thing to note is that, they strictly factory order them as they don't have any dealership of their own and so have to factor the factory order time. In my case, they had to import it from Germany and the waiting period was 3 months.

Again, the company I worked for was involved in the whole process in my case and no credit history was required.
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Old 25th September 2015, 05:10   #17
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Default Re: Guide: First-time car ownership in the USA

Nice thread! I had a couple of questions though, I will be in Portland, OR for a couple of years starting in July 2016 (my contract is for 2 years). Will it be better to buy a smaller new car, or go for a used, but bigger car or SUV? Most of my driving will be within the city, but will definitely go driving across the country (planning to go to Atlanta, and up to New York) when I get leave. Also, will I have to get an Oregon drivers license for the period? Thank you!

(I don't think I can get a SSN as a temporary resident in the US, please correct me if I'm wrong).
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Old 25th September 2015, 06:06   #18
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Nice thread! I had a couple of questions though, I will be in Portland, OR for a couple of years starting in July 2016 (my contract is for 2 years). Will it be better to buy a smaller new car, or go for a used, but bigger car or SUV? Most of my driving will be within the city, but will definitely go driving across the country (planning to go to Atlanta, and up to New York) when I get leave. Also, will I have to get an Oregon drivers license for the period? Thank you!

(I don't think I can get a SSN as a temporary resident in the US, please correct me if I'm wrong).

As long as you are in the USA legally you should have no problem whatsoever getting a SSN. New or used is very much a personal choice. I always buy second hand and I end up driving hugely luxurious powerful cars at the fraction of the cost of a new one. I bought a seven year old Jaguar XJR from Ebay the second day I arrived in the USA. Used it as my daily drive for three years, lots of road trips. This being the USA, I Bought a few more cars obviously! For peace of mind consider buying from a place such as Carmax.

http://www.carmax.com

They carry a vast stock of cars. They service them properly before they sell them on. You get good warranty and service. If you see a car you like in their inventory on the net, they will bring it to a CarMax of your choice. So you dont have to travel to far.

We bought my wife's Ford Focus from Carmax and sold it back to them three years later for cash. Very easy, very convenient.
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Old 25th September 2015, 07:03   #19
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As long as you are in the USA legally you should have no problem whatsoever getting a SSN. New or used is very much a personal choice. I always buy second hand and I end up driving hugely luxurious powerful cars at the fraction of the cost of a new one. I bought a seven year old Jaguar XJR from Ebay the second day I arrived in the USA. Used it as my daily drive for three years, lots of road trips. This being the USA, I Bought a few more cars obviously! For peace of mind consider buying from a place such as Carmax.

http://www.carmax.com

They carry a vast stock of cars. They service them properly before they sell them on. You get good warranty and service. If you see a car you like in their inventory on the net, they will bring it to a CarMax of your choice. So you dont have to travel to far.

We bought my wife's Ford Focus from Carmax and sold it back to them three years later for cash. Very easy, very convenient.
jeroen
Thank you for that Jeroen. I am looking at Carmax and am looking at buying something which we don't have here, such as the Mustang or a Camaro.

It's good to know that I can get a SSN as a temporary resident. I will be on a work visa (it's being organized by work, so I don't know which category/class it is yet, but I will definitely be legal in the US ). My uncle (who lives in Atlanta) said life is so much easier with a SSN with respect to opening a bank account, getting a loan etc.

I was having a look at the Oregon state DMV and couldn't find any info about overseas driving licenses. If anyone has any more info on this I'd be grateful. Thank you!
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Old 25th September 2015, 08:43   #20
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You must be aware of 3 queries that you will be asked during your online application, that play a large role in determining your eventual quote:
Mag,

One's credit score also plays a major role in rating of the insurance premiums. Apparently, the industry has decades of evidence to show that people with poor credit scores are either riskier to insure or are more likely to perpetrate claim frauds, so as to bilk money out of the insurers' pockets.

@ All,

I am trying to understand if it's worthwhile to buy a new car if it's offered at a deep discount if and only if one agrees to finance the car via the dealership? Please help me help a friend who is looking at a 2015 Honda Civic LX at $16k, only if she buys the car at a 0.9% loan sold by the dealership.
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Old 25th September 2015, 10:21   #21
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Default Re: Guide: First-time car ownership in the USA

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It's good to know that I can get a SSN as a temporary resident.
Not all Visa's mandate SSN. For example, H1B will get a SSN but not H4's (Dependents). L1 A or B can get SSN as well as L2's - the dependents. All the Kids if not born in USA would get TIN. This is again off topic but on SSN and Visa Types, nature of work etc, one must visit Immihelp kind of website or USCIS portal itself.

Also if one is not having DL, you can also get something called as State ID - equivalent of your ID card so that you don't need to take our youth passport for ID'ing

Apologies for diversion in discussion.
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Old 25th September 2015, 13:01   #22
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Default Re: Guide: First-time car ownership in the USA

Oh there are so many things I can say on this topic.

- If you are an enthusiast that likes to change cars often, lease. You will probably spend less leasing than changing cars often. Lease while you still have 3 year visa validity - so do it when you first come in or when your visa renews. All the wisdom around buying over leasing comes into play for long-term owners and high-resale economy cars. If you are the sort of person where you drive a lot of identity from what you are driving and you constantly think about cars, you will be happier leasing a nice car for relatively less monthly payment than buying a regular economy car.

- Buy used. You will save a lot of money. Negotiate hard and strike a good deal. Keep looking till you get the deal (and the car) you like. Don't "settle". At the same time be realistic. If you expect a price that is unrealistically low you will keep waiting forever or worse, end up with a lemon.

- Don't give yourself a mental block as to whats affordable and whats not. One of my friends leased a Prius for $270 a month, and another leased a Mercedes C250 for $250 a month - with an almost similar down payment. Guess which one ended up with buyers remorse.

- Don't buy German cars without a warranty. If you go used, try to get a certified pre owned one with a good multi-year bumper-to-bumper warranty (bumper-to-bumper warranties are not really bumper-to-bumper warranties, but thats a different story).

- Don't buy into brand stereotypes, test drive every car and decide. Don't judge a car by its brand. Research every model and even every variant within the model on its own merit. Example: Hyundai Genesis coupe, while still a Hyundai, drives better than many other cars of other brands.

- Understand the difference between envy and buyers remorse. Envy is when you are looking at a much more expensive car like a Ferrari - or an M3 or an RS5 - and hope you can afford it one day. Buyers remorse is when you buy a 3 series with no options and packages, and then wish you'd got one with the sports package or a bigger engine. Don't be that guy. Spec your car well, I am not saying load it up to the teeth with options but be sure to do your homework on the model and be aware of what options are must-have for you and don't compromise on that. Different people have different priorities.

- Separate the car research process from the car shopping process, don't do those together. Do your research first and figure out which model of car and which variant you want. Only then go and shop for a deal on your car. Don't walk into a showroom and start finding out about the car from the sales person. When you walk into a showroom, you should already know everything about the car, and the only thing he can give you is a) test drive and b) a great deal.

In the research phase, you need lots and lots of test drives. Get your test drives on used pieces of the same model (you can find them on autotrader). Go to the dealers that have used ones, and test drive those. You won't be putting mileage on someone's brand new car, and also the salesperson will give you test drives far more willingly on used cars.

Once that research and comparison is all done and you know which car model you are getting, start shopping for your actual car and look for deals around. That's when you should be going to a showroom and test driving new cars.

Other than price, don't listen to anything a car sales person has to say. They are usually uninformed or misinformed. You can find more and better information on the internet, on forums like this one. Spend a lot of time doing research.

- Avoid impulse purchases. Don't walk into a showroom with cheque book and papers intending to buy one model and come away with another model. Take a step back, question yourself whether you are getting carried away with sales talk, whether you will be truly happy with the car, sleep over it and decide.

- Economy car: If you are going the route of "I don't care what car I drive, I need to save max money" then my suggestion is buy a Honda/Toyota/Nissan/Mazda thats 60k-70k miles for around $6k-$7k (try to pay for it in full), use for 3 years and sell it for probably $5K. You will lose least amount of money this way compared to say, buying a brand new Accord or Camry.

- Understand financing and add-on options before you go to the dealer. Extended warranty. Maintenance plan. Tire insurance. Gap insurance. They will give you a lot of options and press you to sign up for them, and the price of your car will end up being a lot more than what you expected. Understand all of these before you go to the dealership, and decide upfront what you want (I prefer not to get any of these). Don't decide when having the conversation with the "finance guy" (who is really the best salesman there). Don't let that guy influence you into getting any of those add-ons.

- Don't forget to have fun. Car-shopping is a very fun thing to do , don't be in a hurry. Don't feel pressured to "buy something". Enjoy the process and buy the car of your dreams.
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Old 26th September 2015, 00:36   #23
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A few additions, as far as I know most states will have the practical part of your Driving license test done in normal traffic. They take you out into the normal traffic wherever the local DMV happens to be. My test took 4-5 minutes, but my wife’s about 35 minutes, both in Kansas at the same DMV office.
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Having said all of that, in general anything to do with cars, other then the DMV, is extremely well organised and quick. You can still walk into any dealer in the USA and leave an hour later in your brand new, or second hand car. Registered, insured, paid for everything.
Even though the DMV gets a bad rep from americans, it is not a bad experience. I never had to wait for more than 45 minutes in any DMV office. Of course one's experience varies from state to state. I have purchased my car, transferred the title to my brother and back, renewed my Drivers License and registration several times without any hassle. Considering our experience with the RTOs Indians should find the DMV 'heaven'.

Last edited by aah78 : 1st October 2015 at 18:26. Reason: Avoid quoting large posts please. Thanks!
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Old 26th September 2015, 01:57   #24
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Default Re: Guide: First-time car ownership in the USA

Very well jotted down thread. Here are a few points from my side.

1- Buying a used car in US is a good idea coz usually cars are in great shape here and new car depreciates a lot as soon as it is out of the showroom. My choice is always certified pre owned. Most states have lemon laws that protect you for upto 3 months(depending on car mileage) in case a used car purchased through a dealer has some issue and dealer does not repair it. So you are covered in case something goes south.

2- Plan to keep any car you buy for atleast 3 years, because you loose the sales tax paid every time you sell a car which can be upto 12% of the car value in some states.

2- One way to get additional discount on insurance is to combine it with a renters or homeowners insurance, you can save about 25% doing so if you get both from same insurer and you get additional coverage. Renters insurance is cheap at about $120 a year.

4- Getting a good insurance limit for third party is important even though your state might have a lower mandate. Plan to get atleast 150k per person and 300k per accident even if you pay a little higher premium you are covered in case some moron decides to sue you for neck surgery expense one year after the accident happens and no one was injured at that time.(Yes, you could be sued upto 3 years after the accident)
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Old 26th September 2015, 10:54   #25
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Default Guide: First-time car ownership in the USA

Hi !!
Many thanks to The Mag for starting this thread.
Having gone through this first timer Ordeal - of car loan, No credit history , had to improvise to own and secure a car loan.

My two cents-

Credit Unions- They are your best friends. Please if possible have a word with your Gora boss ( disclaimer- Am just sharing my experience and 2 cents . Not being racist in any sense. My immediate Indian boss said " Mai Kya Karu, face it. Hum ne bhi struggle kiyA , tum bhi karo) about securing a car loan. He will be glad to call the local CU to establish your credentials. Most American bosses usually will know some one in CU , may be a golf partner etc and can throw in a word for you.It works. The big Gora boss did the trick.
Down payment - do have some - 20% plus .
Interest Rate - Be prepared for 4.5% plus with credit unions.Normal banks and car company backed credit will not work .
Lease- First timers will not qualify for one. That's not an option .
Establishing credit history- Be sure to own a prepaid credit card. Duration 6 months and you are set. Return it and take a normal one. Again ,credit unions are the best .
Insurance- you will not qualify with most insurance cos . They need 18 months USA driving history.
Special thanks to progressive who have liberal/ forgiving out look towards us and do feel we are humans and not Martians .
Expect very high insurance premiums - 900 to 1200 / six months for a year.

After 3 years in the US , have a second car at 1.9 % that too with a pre owned car. Good days !!
Choice of car - Pay what you get. Have yet to get a good car for $6000 . Been following the NA ownership thread and fellow members do get great deals . I have not and will not at that price in my area . My first car was $12000 .
1)Car is not a luxury - in Midwestern towns , public transport is non existent. Car is a necessity. Have a decent car which will not fail you in -5 deg farh.
2)Repairs are expensive - good car less/ no repairs . My impala did cost me $350 for each auto lock failure. $250 for windshield replacement.
3) Servicing - Search for online coupons / direct deals on co website. Print it for the many point inspection/ tire rotation etc etc and oil changes. If you go to the dealer and tell him about servicing etc , he will be happy to fleece you for $150 which could have been done for a $40 online coupon.
Coupons available on dealer website and / or maker website.
Diving License- In IL the visitor license is valid for 3 months only. You need a social for a DL.

Hope above helps and happy car hunting and owning.
Cheers -

Last edited by naj : 26th September 2015 at 10:58.
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Old 29th September 2015, 01:50   #26
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There is a TAX which one has to pay for while buying a car from a Dealership. This is the SALES TAX which varies from state to state. Some states charge it at 4% while others charge it at 8.75%. If you are buying a $20000 worth car, the tax would be $1750 (@ 8.75%). This tax amount can be saved if the dealer wishes to sell his car to you as a Private Party. Now all dealers would not do this. It all depends on how the negotiation went between you and the dealer. My car dealer helped me with this when I went to him for my second purchase. My first purchase was a $15000 CPO and I paid the Sales Tax. My next purchase from him was a $43000 CPO one and my only condition of purchasing from him was if he was willing to sell it to me as a private party. He agreed and I saved around $3200. So there are ways of saving your hard earned dollars. One just needs to know the legal ways to do so.
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Old 29th September 2015, 02:32   #27
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A lot of people have different opinions and misconceptions about leasing a car. More often than not you will hear people saying that leasing is a good bet if you want to change your cars very frequently, say in 3 years. I did a lot of research and number crunching when I bought my first new car in the US. Without getting into specifics and some exceptional conditions, the bottom line is that Leasing is Never going to save you money. Leasing can be convenient. Leasing can lower your EMI. But leasing will never save you money.

So how does 'Leasing Can lower your EMI' and 'Leasing will not save you money' go together? Well, think of leasing a car like renting a car. You pay rent to use the car for a few years, but you never Own the car. So at the end of the lease, you do not have anything to sell. You walk away from the car just like you would return a rental. As I said, it is convenient.

Yes, you have the option to purchase a leased car. In your lease contract, you always have a predefined lease buyout price. At the end of your lease, you pay that price and buy out the car. Now, if you buyout your car after end of lease and do a simple math to find how much it cost you - you will notice that it would have been cheaper to buy the car outright or finance it with a bank/ credit union.

If you choose, not to buy the car at end of lease, and do your math, you will still find that had you purchased a car outright (or financed it) and sold it after 3 years (your lease period) the money you lost due to depreciation is a lot less than the amount you would pay in lease over 3 years.

So when should you lease? The only time you should lease is when you want to keep your monthly payments low and do not care about how much the car really costs you at the end of the day. Many folks find this alluring. You can lease a BMW in the same monthly amount that you would pay to finance an Accord or even a well equipped Civic as long as you choose to ignore/ not understand how much you paid for your car at the end of your lease.

My take - if you want to change your car every 3 years, get it financed, and trade it in with your dealer at the end of 3 years. You will pay more in EMI each month, but it cost you a lot less at the end of 3 years. And trading it in at your dealer is as hassle free as returning your car at the end of your lease.
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Old 29th September 2015, 03:41   #28
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So when should you lease? The only time you should lease is when you want to keep your monthly payments low and do not care about how much the car really costs you at the end of the day. Many folks find this alluring. You can lease a BMW in the same monthly amount that you would pay to finance an Accord or even a well equipped Civic as long as you choose to ignore/ not understand how much you paid for your car at the end of your lease.
In my opinion, one should certainly lease when they get smitten by a car that is not proven on the road. Like the first car in a new line of models. Like the Mercedes CLA. If its a brand new line of cars, why would you trust the car model line with your own money? Let the dealer take the risk - lease it. If there are tons of issues, you have an easy way out.

Same deal with leasing something like an electric car - like Nissan Leaf. There are leases available for $199 a month. This limits your max risk with a new car/technology to a large extent.

I do agree, that for Desi folk who buy an Accord/Camry, with intention to drive it for a dozen years, and still get some resale value out of it - leasing never makes financial sense.
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Old 29th September 2015, 05:42   #29
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In my opinion, one should certainly lease when they get smitten by a car that is not proven on the road. Like the first car in a new line of models. Like the Mercedes CLA. If its a brand new line of cars, why would you trust the car model line with your own money? Let the dealer take the risk - lease it. If there are tons of issues, you have an easy way out.



Same deal with leasing something like an electric car - like Nissan Leaf. There are leases available for $199 a month. This limits your max risk with a new car/technology to a large extent.



I do agree, that for Desi folk who buy an Accord/Camry, with intention to drive it for a dozen years, and still get some resale value out of it - leasing never makes financial sense.

Totally agree with you. There are cases where leasing makes sense. What you listed is a perfect example of when to lease. But most americans lease to get into a car that they simply cant afford otherwise. Dont ever make that mistake.
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Old 29th September 2015, 12:00   #30
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One downside of leasing is that early termination comes with huge penalties. So you must be sure about your work situation and know that your planned stay in US will equal or exceed your lease duration.
There are also limitations on yearly mileage on leased cars, and those might be adequate for most folks. But if you love road trips and intend to drive a lot, do check the lease contract for additional charges you will need to pay at the end of the lease if you happen to exceed the number of miles in the contract. Usually its a per mile charge, and can turn out to be a significant amount.
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