On the Road: A Guide to Getting Your First Car as an International Student

As a new or incoming International student in the US, one big question you might be grappling with is, "When and how should I get my first car?" Whether you're navigating public transportation, weighing the benefits of new versus used vehicles, or trying to decode financing terms, this guide is here to steer you in the right direction. From understanding the need for a car, to choosing between an SUV or a sedan, and even navigating the maze of hidden costs, we've got you covered. Let’s dive into everything you need to know to make a confident, informed decision on buying your first car in the US and understanding the ins and outs of car ownership.

When and Why Do You Need a Car?

One of the first questions you might ask yourself is, "Do I need a car as soon as I land in the US?" The answer is typically no. Many international students, especially those pursuing master's or PhD degrees, hold off on buying a car until it's absolutely necessary. For example, PhD students who have a stable stipend might buy a car in their first semester, but most master's and bachelor's students wait until they secure an internship or a full-time job. Public transportation, ride-sharing apps like Uber and Lyft, and campus shuttles can be sufficient for getting around initially.

However, if you find yourself in a situation where public transportation is inefficient or expensive, or if your daily commute becomes too challenging, it might be time to consider getting a car. The key is to evaluate your needs versus the costs associated with owning a vehicle. If the total cost of car ownership (monthly payments, insurance, gas, maintenance) is less than what you'd spend on public transportation and Uber, then buying a car makes sense.

Buying New vs. Used

The decision to buy a new or used car is influenced by various factors, including budget, reliability, and personal preference. Here’s a deeper look into both options:

• New Cars: New cars come with the advantage of modern features, warranties, and often lower interest rates on financing. Manufacturers like Toyota and Honda frequently offer special deals with low to zero percent interest rates, especially towards the end of the year. A new car ensures you’re the first owner, and you won’t have to worry about previous wear and tear. Plus, new cars come with the latest safety features and technology, providing peace of mind.
• Used Cars: On the other hand, used cars can be significantly cheaper, which is a major advantage for students on a budget. However, it’s important to do thorough research. Factors like the year of manufacture, mileage, and condition of the car play a crucial role in determining its value. Websites like Kelley Blue Book can help you compare prices and evaluate the car’s condition. In recent years, due to supply chain issues, the prices of used cars have sometimes been higher than new ones, so always compare current market prices before making a decision.

Consider your financial situation and your needs carefully. If you find a well-maintained used car with low mileage at a good price, it might be a great deal. Conversely, if the difference in price between a new and used car isn’t substantial, the benefits of buying new could outweigh the savings of buying used.

SUV vs. Sedan

The choice between an SUV and a sedan depends largely on your lifestyle and preferences:

• SUVs: Sport Utility Vehicles (SUVs) are versatile and practical, especially if you need to transport larger items or often travel with friends or family. They offer more cargo space, higher ground clearance, and a generally safer driving experience, particularly in adverse weather conditions like snow or heavy rain. If you enjoy outdoor activities like camping or frequently moving apartments, an SUV might be the better choice.
• Sedans: Sedans, on the other hand, are typically more affordable, offer better fuel efficiency, and provide a smoother driving experience. They are easier to handle in urban environments and usually have lower maintenance costs. If your primary use for the car is commuting and running errands, a sedan might be more economical.

Make a list of your daily activities and future plans to see which type of vehicle suits you best. While SUVs provide more utility, sedans are cost-effective and efficient.

Where to Buy Your Car

Finding the right place to buy your car is as important as deciding what car to buy. Here are some options:

1. Friends & Family: Buying from someone you know can be beneficial as they might offer you a good deal. However, always verify the car’s condition and price using resources like Kelley Blue Book. The downside is that these transactions typically don’t build your credit history.
2. Dealerships: Dealerships offer both new and certified pre-owned cars. While they provide warranties and financing options, the buying process can sometimes be overwhelming due to high-pressure sales tactics. Bring a friend or family member to support you during negotiations.
3. Online Platforms: Websites like Carvana make the process of buying a car convenient by allowing you to complete the purchase online. However, their prices can be higher, and financing rates might not be as favorable. Read reviews and compare prices before making a decision.
4. Rental Companies: Companies like Hertz and Enterprise sell their used rental cars at competitive prices. These cars are often well-maintained and come with detailed service histories. This option can provide good value for money.
5. Private Sales: Buying directly from an individual can save you money, but always insist on a pre-purchase inspection by a professional mechanic to avoid hidden issues.

Financing Your Car

Understanding car financing is crucial to avoid overpaying. Here are some key points to consider:

• Pre-Approval: Getting pre-approved for a loan from your bank or credit union can give you an edge in negotiations and help you understand your budget.
• Interest Rate & Loan Term: Lower interest rates are better, and shorter loan terms reduce the total interest paid. Compare offers from different lenders to find the best deal.
• Down Payment: A higher down payment reduces the amount you need to finance, which can lower your monthly payments and the total interest paid.
• Refinancing: If you initially get a high-interest loan, you can refinance it later when your credit score improves to secure a lower rate.

Financing terms can be complex, but understanding these basics will help you make an informed decision. Always read the fine print and ask questions if you’re unsure about any aspect of the loan.

Should You Buy or Lease?

Both buying and leasing have their pros and cons:

• Buying: Owning a car gives you the freedom to drive as much as you want and make any modifications. It involves higher upfront costs and ongoing maintenance but builds equity in the vehicle.
• Leasing: Leasing can be attractive due to lower monthly payments and the option to drive a new car every few years. However, leases come with mileage limits and don’t build equity.

Consider your long-term plans and financial situation. If you plan to stay in the US for a few years and want to avoid the hassles of selling a car, leasing might be a good option. If you prefer ownership and plan to keep the car for many years, buying is the better choice.

Hidden Costs

Owning a car involves more than just the monthly payments. Be prepared for these additional costs:

• Title Fees & Taxes: When purchasing a car, you must pay title fees to the state to officially register the car in your name. This cost varies by state but can range from $50 to $300. Additionally, you’ll need to pay sales tax on the vehicle's purchase price, which can range from 6% to 10% depending on your location. For example, on a $20,000 car, this could add up to $2,000.
• Registration Fees: These are annual fees required to keep your car legally registered. The cost depends on your state and can range from $50 to $300 per year. Some states also require emissions testing or vehicle inspections, adding to the yearly costs.
• Insurance: Car insurance is a significant ongoing cost and varies based on factors like your age, driving history, location, and the type of car you drive. New drivers or those with no US driving history may face higher premiums. Comprehensive insurance, which covers a wide range of incidents, is more expensive than liability-only insurance. Expect to pay anywhere from $100 to $200 per month for comprehensive coverage as a new driver.
• Maintenance & Repairs: Regular maintenance is necessary to keep your car in good condition and can include oil changes, tire rotations, and brake inspections. Costs vary depending on the car and service provider. For instance, an oil change might cost $30 to $70, while more extensive maintenance could cost several hundred dollars. Additionally, unexpected repairs can add up, so it's wise to budget for these potential expenses.
• Gas: Fuel costs depend on your car’s fuel efficiency and how much you drive. Prices vary by state, with places like California being more expensive than others. On average, you might spend $50 to $100 per month on gas, but this can be higher if you drive frequently or have a less fuel-efficient vehicle.
• Parking: If you live in a city, you may need to pay for parking at your residence or workplace. Monthly parking fees in urban areas can range from $50 to $300 or more.
• Tolls: If you drive on toll roads, bridges, or tunnels, these costs can add up, especially if you commute daily. Use tools like E-ZPass to manage and reduce these expenses.

Budgeting for these expenses is essential to avoid financial strain. For example, my monthly car expenses include loan payments, insurance, gas, and maintenance, totaling around $760. Planning for these costs will help you manage your finances better and prevent unexpected financial burdens.

Need vs. Want

As an international student, it's crucial to distinguish between your needs and wants when it comes to purchasing a car. This decision can significantly impact your financial health and overall student experience. Before making a purchase, ask yourself if you truly need a car or if you simply want one. Your priority might be to pay off student loans quickly, which could influence your decision. Make an informed choice that aligns with your financial goals and lifestyle. Ask yourself these questions:

1. Is public transportation insufficient for my daily commute?
2. Will I be interning or working in an area that requires personal transportation?
3. Are ride-sharing services like Uber or Lyft more expensive in the long run than owning a car?
4. Do I need a car for essential activities like grocery shopping or medical appointments?

If you answered yes to most of these, you likely need a car.

Remember, every international student who came before you has navigated this path. They have faced the same questions, concerns, and excitement that you're experiencing now. And just like them, you've got this! Whether you end up with a practical sedan for your daily commute or an SUV for weekend adventures, the important thing is that you make an informed decision that aligns with your needs and goals. Buying a car in a foreign country is a testament to your adaptability, your willingness to embrace new challenges, and your growing independence. So, approach this process with confidence, ask questions and seek advice when needed.

Author Note

Hey, I’m Amanda! A fellow international student and a growth intern at roam. I hope you found some of my insights from working with hundreds of international students over 2 years and learning from their personal experiences to be useful.

Roam is an ecosystem that simplifies international student migration by putting together all the resources students need to start their lives in a new country, in one place. This includes publishing informative articles (like this one), creating personalized tools on our website, and building digital and in-person communities for international students. Check us out, and feel free to reach out!