How to buy a car in the USA
You can do without a car in the United States except in megacities with a developed transport infrastructure. But for most Americans, a car is a must-have: without a car, you can't get to college, get to work, or take your kids to school. Therefore, purchasing a car is one of the first tasks. Moreover, it is accepted to buy cars here on credit, there are even separate programs designed for newly arrived immigrants. “Forum” tells what you need to know when buying a car and how not to overpay for a car.
Easy and fast
Galina Danilova from Nizhny Novgorod has been living in Miami since 2012. Together with my husband, I decided to buy a second car - a large, spacious one that would fit the whole family. The choice fell on the budget "Dodge Grand Caravan".
“The car is simple, reliable, inexpensive to maintain, but spacious and relatively economical,” Galina explains her choice.
The couple decided not to overpay and not to buy a new car.
Looking for a two-year minivan with low mileage and clean history. In one of the car dealers, we found a car with a mileage of just over 30 thousand km for $ 14 thousand. Before that, the car was rented, so many people traveled there. However, for spouses, this option had several advantages. The company, which previously leased the car, always serviced by an authorized dealer. In addition, the car was still on the factory warranty and had not been involved in any accidents before.
Galina decided to take a car on credit, although her credit rating was not very good - 680. She filled out an application for a loan at the car dealership and left $ 3000 as a down payment.
“We did not wait for a decision on the loan, we left on business. The next morning they called us and said that they had approved a loan for six years, but at a high interest rate - about 23%. You had to pay $ 293 per month. We arrived at the salon, took out insurance by phoning an agent recommended by the dealer. It all took about an hour. We have already left the salon in a new car. In six months we want to refinance in another bank at a lower interest rate, ”says Galina.
This is how most of the sales in the USA go. Although the procedure may be slightly different in different states. If, for example, in Florida or California you can drive directly from the salon by car (the auto dealer prepares and sends registration documents to the department of motor transport), then in more than half of the states the buyer needs to register the car himself and then pick it up from the salon. You can find out what documents are required for registration at the nearest office of the motor transport department (DMV).
What kind of car to buy
Buying a new or used car is the first question a potential buyer should answer. New is much more expensive, but you can be sure of its technical condition. A used car won't hit your budget that hard, but it can be more likely to break down. However, if in the CIS countries you can slip a “pig in a poke” (for example, a car after a serious accident, but carefully restored), then in the USA this is practically impossible. You will always know what you are buying thanks to the so-called Carfax system (CARFAX).
“Carfax” is an information system that collects information about almost all vehicles in the United States. Who and when bought the car for the first time, how many owners were there and who exactly, what accidents happened and when, what service did the car go through, whether the speedometer was twisted, are there unpaid debts for the car - this is a rough list of what you can find out about the car, even if you haven't “felt” it yet.
In 1984, this system was created by a computer programmer and an accountant who decided to deal with the twisting of odometers (car mileage counters). By the 1990 years, this became a real problem in autotrading. On average, the car twisted more than 60 thousand. Km, because of what the buyer lost about 4000 dollars. The media called this problem the biggest fraud in the consumer market. Now for such a crime you can go to jail for five years.
At the very beginning, information about cars was transmitted by fax - hence the name. Over time, government registration services, technical service centers, and insurance companies also joined the system. Today, the system covers the entire car market of the USA and Canada, and no self-respecting dealer or car dealership will buy or sell a car if there is no record about it in the system - in this case, it is automatically considered suspicious.
To check a car, it is enough to know its identification number (VIN). The service is paid - about $ 40, there is a system of discounts. Most sellers pay for the document themselves and provide it for free, but if you don’t trust, you can get it yourself. In addition, the vehicle history can be checked at state sites.
In any case, buying a used car, in addition, it is worth using the services of a professional mechanic who investigates a potential purchase and will express his opinion regarding its technical condition.
Keep in mind that when buying used cars, car dealers may require you to sign the so-called “as is” form - that you have no complaints about the purchased car and the seller does not bear any responsibility after leaving the gate.
Where to buy a car
If you decide to buy a new car, then you have a direct road to the car dealership of the chosen brand. There you can purchase a certified vehicle. If the salon does not have exactly the car you want - with a certain interior color or a set of options, you can order it at the manufacturing plant, and it will be delivered in a few months.
Those who want to buy a used car can search for it in several places:
1. Any auto show... As a rule, salons that sell new cars also sell used cars of their own brand, as well as any other. Moreover, they often certify used cars of the brand they specialize in, which guarantees their good technical condition and makes it possible to obtain an extended manufacturer's warranty. For example, a certified second-hand (used) "Nissan" can be bought only in "Nissan" dealerships, a certified used "Mercedes" - only in "Mercedes" showrooms. What is available can be viewed on the website.
2. Salons used cars. There are no certified used cars, but the choice of used cars is much larger.
3. Auctions. They are open to all. You can come and choose the car of interest. Usually cars are divided into three groups: problem-free, with minor problems or damage, and in need of repair. To find out where and when the auction will take place, enter the search words “public auto auction” and the name of your area into Google.
4. Special sites: cars.com, avtotrader.com, carsforsale.com, offleaseonly.com, craigslist.org... Apply the filter system and select the option of the brand of interest that suits the price, year and mileage. Once results are returned, refer to dealer-provided CARFAX reports, selecting the “cleanest” - no accidents, with a minimum number of owners, preferably factory warranty.
If you are ready to buy an inexpensive, but problematic car, then you can purchase the so-called “salvage cars” - restored after serious accidents or floods. This option is suitable for those who can troubleshoot with their own hands during operation or have good friends, mechanics. You can buy them for 50-70% of the cost of ordinary cars of the same brands.
The manufacturer refuses to provide a guarantee for such cars, so all costs in the event of a breakdown will fall on your shoulders. However, you can insure a car in case of an accident. These cars are working and can serve for some time, but then sell them hard.
A number of tips on choosing and buying a car can be found on the government website. USA.gov. Particular attention is paid to the purchase of used cars.
In particular, keep in mind:
- about your rights, you can consult the state office for the protection of consumer rights (State Consumer Protection Office);
- on the website of the National Highway Traffic Safety Administration (NHTSA) there is a database of possible investigations and complaints about cars. Here you can check, for example, whether the manufacturer responded to a car of a specific brand in connection with a serial defect or what defects were identified in various children's car seats;
- Automotive Security Center can provide information on defects in the security systems of various car brands;
- It is important to check whether the manufacturer’s warranty is still valid and to contact it to find out to what extent you can use it;
- it is worth knowing the rules for returning the car to the seller, having received them in writing;
- if you use the services of a professional mechanic, pre-negotiate the test conditions of the machine with the seller. As a rule, the buyer pays for the test, but in case of serious defects, the seller is obliged to compensate for these costs;
- carefully study the documents of the seller and make sure that you are not trying to sell a car that is in leasing.
How not to overpay
There are several sites that can help you find out the real market price of the car you want to buy:
- truecar.com will help determine the market price of a new car;
- kbb.com - the well-known US Kelley Blue Book, which has existed since 1918, most accurately shows the market price of used cars and the manufacturer's recommended price for new cars (the real cost, however, can be significantly lower);
- edmunds.com shows the price of both new and used cars;
- blackbook.com helps to navigate the price of used cars.
In addition, a comparative analysis of prices for used cars can be found in public libraries, for example, in the reference book “NADA Official Used Car Guide”, Published by the Association of National Automobile Dealers.
Council № 1. Before buying a car, it is worth analyzing all these sites in order to communicate with the already "savvy" seller.
Совет №2. Always ask for a substantial discount, even if you buy a car in the showroom. Dealers are interested in selling and are therefore willing to make significant concessions. In showrooms, the discount for imported cars can reach 10% of the manufacturer's recommended cost, for American cars - up to 20%.
Совет №3. Explore the offers of competing salons. Find the most attractive offer, and then contact the salons and find out who can offer you a better price.
Board number 4. Salon, where you will buy a car, most often ready to buy your old car. Keep in mind that the car dealer is likely to rate it at 10-15% below the market price, but at the same time you will be relieved from the hassle of selling. If you want to get more for your car, you will need to sell it yourself.
How to pay for the car
There are several payment options for the car you buy in the salon: cash, credit, leasing.
A small number of cars are bought for cash in the USA - mainly lending and leasing are preferred.
Irina Green from California has been living in the USA for 25 years. I bought only my first car on credit, I paid for the rest immediately. In total, she changed six cars here.
“Apart from my first car, which I bought used, all the others I got new from the dealer. They have a guarantee and they hardly break, - Irina explains her choice. - I keep the car for five years, then I buy a new one, and I hand over the old one to the dealer. Maybe I'm losing money, but it's much easier than looking for a buyer. "
In America, as a rule, cars are bought on credit. With a good credit rating (750 and above), the interest rate is low (2-4%), and sometimes even zero, therefore, the overpayment is insignificant. "Forum" previously said, how to build a good credit history. With a bad credit rating (600-650), the interest rate can reach 25-30%, if they give credit at all. In this case, you must make a down payment of at least 20% of the amount.
The list of documents required for obtaining a loan is simple:
- Identity card (ID), in most cases it is American law;
- Any document confirming the address (utility bills, letters from the bank, etc.);
- Social Security Number (SSN);
- They may ask for a second identity document (work permit, national passport);
- A loan application that you can fill out directly at the car dealership. Important points are income and rent. They are taken into account when deciding on a loan. It is believed that monthly payments for a car should not exceed 30% of income minus rental housing.
- Proof of income (salary checks, bank statements).
Alexey Zhilkov from Texas changed seven cars during his three years in the USA. I took everything on credit. “With a loan from a dealer, the interest is cheap compared to the home countries. I did not feel overpayment. The most important thing is not to rush into the purchase, because the choice is crazy and all the showrooms want to sell the car. You can make a good bargain with them if you study the prices of competitors, ”Alexey admits.
A number of salons also offer credit programs for newly arrived immigrants who do not yet have a credit rating. In order to receive a loan under such a program, you must have the following documents:
- Bank statement;
- Social Security Number (SSN);
- Proof of residential address (utility bill, phone bill);
- Evidence of income;
- Contact 5-10 people who know you.
If everything is fine with your credit rating and documents, you can buy a car on credit within one day. If not, and large dealerships refused you, you can try to contact small car dealers. True, their lending rate will be high, and the lending conditions will be tough.
So Nikolay Bukharov, co-owner of a small car dealership in Miami, recommends:
“If you don't have a good credit history, but have a social security number, then you have a direct road to small dealers like us. The percentage, of course, will not be small, about 20-26%. However, if you do not allow delays in payments, in eight months you will be able to refinance the loan up to 14%, and if there is a good credit rating, then up to 5-6% ”.
Leasing is more like a rental than a purchase. To rent a car, you need to have a very good credit rating. At the same time, only new cars can be leased.
You rent a car for two to four years, pay a certain amount every month - usually it is less than with a loan. The idea is this: during the period while you use the car, its market value decreases, so you must pay the difference between the initial price of the new car and its value at the end of the lease period during the lease. After that, you can either buy out the car or give it back to the salon.
When leasing, a mileage limit of 10-15 thousand miles (16-24 thousand km) per year is established, very rarely - 20 thousand miles (32 thousand km). In case of excess, you need to pay extra for each mile. A fine must be paid for early termination.
To get a lease you need only a driver's license and a social security number.
Leasing is popular in the USA. For example, a Lexus RX350 worth 60 thousand dollars can be leased for three years, and in one of the Californian car dealerships it will cost about 400 dollars per month... At the end of this period, having driven less than 10 thousand miles (16 thousand km) per year, you give the car to the dealer. If you want, take a new model and continue in the same spirit. The main thing is that the car is always under warranty and all maintenance is included in the cost of the lease payment.
Middle class cars like Toyota Corolla or Volkswagen Passat will cost $ 200-250 a month. If you do not need to travel much or this is the second car in the family, the leasing option is quite convenient. The main thing is that you should be psychologically comfortable with the idea that the car will never belong to you.
What to do after purchase
Depending on the state where you buy the car, it will either be registered in the salon, or you will need to register it yourself in the department of motor transport.
As a rule, first issued temporary numbers and registration certificate, simply printed on a regular office printer. Then, during the month, it will be possible to get permanent license plates, as well as pick up in the salon a contract of sale and a certificate of title to property.
In any case, in order to pick up a car from the salon, you should already have compulsory civil liability insurance. Without it, driving on US roads is prohibited. When buying on credit or leasing, you have to insure not only your responsibility to other road users, but also against damage, fire, theft and other possible risks. You can insure yourself with any insurance company, especially where you may have discounts. If not, then the salon employees will offer insurance agents.
Insurance is carried out simply by a phone call, payment is made remotely by credit card. The car dealership receives a fax or e-mail with documents that you sign and leave copies with the seller. Photos of the car, taken by the phone from four sides, you send to the insurance agent, and this is done with insurance.
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