How to buy a vehicle in the US as a non US-resident
Introduction
If you're visiting the US for a week or two, renting a vehicle might make sense.
But if you're visiting for three or six months, a rental can become very costly.
This is an article about buying a vehicle in the United States, written for tourists, travelers, foreigners - anyone who doesn't live in the US, but wants to buy a vehicle here.
There are four things you should consider when buying a vehicle in the United States:
- Identifying the vehicle,
- Checking the vehicle out,
- Paying for the vehicle, and
- Completing the documentation.
Let's jump right in.
How are you going to register your vehicle?
Buying a vehicle is the easy part. But how are you going to register it?
Vehicle registration is done by the US states, not the national government.
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Identifying the vehicle
The first step to buying a vehicle in the US is finding a suitable one.
Vehicle search engines are a great place to start your search.
Cars and trucks
The following search engines aggregate cars and trucks for sale by dealers and make it easy to sort and filter:
And Autotrader lists cars and trucks for sale by dealers and individuals.
Recreational Vehicles (Motorhomes)
If you're looking for a motorhome (we call them Recreational Vehicles, or RV's in the US), you might check out these search engines:
Motorcycles
If you're planning to visit the US on two wheels, Cycletrader is an excellent resource.
Buying from individuals
The search engines listed above mostly list vehicles for sale at dealerships. You can also find vehicles for sale at the following sites:
Things to be aware of in your search
Listings remain active until a sale closes
You found your dream vehicle listed for sale online - next stop purchase, right?
Not quite.
Agreements to purchase vehicles fall apart all the time. Maybe a buyer agrees to purchase a vehicle but can't get financing, or the buyer's spouse wants to buy something else.
Sellers generally remove for-sale listings only when the sale closes - when the paperwork is finalized and the seller receives the funds.
A vehicle listed for sale may actually have a buyer, and the sale hasn't closed yet.
So it's best to call the seller and ask if a vehicle is still available.
Give yourself plenty of time
Covid caused many Americans to move out of urban areas and into suburban and rural areas, where public transportation is limited. Demand for vehicles shot way up.
At the same time, supply chain issues limited the number of new vehicles that manufacturers could produce.
As a result, vehicle inventories are near historically low levels.
Give yourself plenty of time to find the right vehicle - there's not a whole lot sitting out there.
Sales taxes and registration fees
Whether you're buying from a dealership or an individual, sales taxes and registration fees are always in addition to the listed price.
Sales taxes and registration fees in popular arrival destinations can exceed 10%, so make sure to plan for this when budgeting your purchase.
How does 0% sales tax sound?
In the US, you pay sales tax where you register a vehicle, not where you buy it.
Let visitor.us register your vehicle in Montana, where sales tax is 0%.
Your vehicle never has to come to Montana.
Checking the vehicle out
Once you've found a suitable vehicle, you'll want to do a bit of research on the vehicle's condition.
There are three ways to check on a vehicle's condition remotely:
- Vehicle history report,
- Title brands, and
- Pre-purchase inspection.
Vehicle history report
A vehicle history report is the first data point to look at when considering a vehicle purchase. It outlines:
- The vehicle's ownership history,
- Its service history, and
- Any accidents it's been in.
The most commonly used vehicle history report in the US is Carfax. Autocheck is another common report.
Title brands
A title is a vehicle's official ownership document. If a vehicle has been damaged or is potentially unsafe to drive, a "brand" indicating the issue is placed on the title. A title brand stays with a vehicle no matter how many times it is sold.
Common title brands include:
- Salvage
- Junk
- Flood
- Hail
Even though vehicles with title brands can be significantly less expensive than vehicles without title brands, you should probably steer clear of them. The vehicle may be unsafe to drive, but it will also be difficult to sell.
Pre-purchase inspection
History reports and title brands are a great way to start learning about a vehicle's history, but they don't necessarily tell you about the shape that the car is in right now.
For more information on a vehicle's current condition, you might want a pre-purchase inspection.
The following services will send a mechanic to your vehicle to test drive and inspect your vehicle. You'll get a comprehensive inspection report within 2-3 days for between $150 and $250.
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Paying for the vehicle
Paying for a vehicle in this day and age is quick and easy, right?
Only if you're prepared.
Why you can't (normally) pay for a vehicle with a card
Credit card networks such as Visa and Mastercard charge merchants (like auto dealers) 3-5% of the value of each purchase.
If an auto dealer doesn't pass this on to you, this cost will reduce (or maybe eliminate) their profit on the vehicle.
Purchases on cards can also be disputed or reversed. If you pay for a vehicle with a card and drive it away, the dealer may not have any protection against you claiming fraud to your credit card company and reversing the charge.
Finally, individuals usually don't have a way to accept credit or debit cards.
So if you were planning on paying for your vehicle with a card, forget it.
Why you (probably) can't pay for a vehicle the way Americans normally do
The most common way to pay for a vehicle in the US is with a Cashier's Check. This is a special type of check issued directly from a US bank that cannot be reversed.
Cashier's checks are a very secure way of accepting payment for a vehicle because they are guaranteed by the issuing bank, not the purchaser's account.
Payment with a cashier's check hits the recipient's account immediately and cannot be reversed by the payor.
If you don't have a US bank account, you probably can't get a cashier's check to pay for your vehicle.
So, if you can't buy a vehicle with a card or a cashier's check, how can you pay for one?
US dollars are always accepted
Money talks.
But how do you get your hands on enough to purchase a vehicle?
If you bring cash, money orders, or traveler's checks in an amount exceeding $10,000 into the US, you must declare it upon entry.
You can also withdraw US dollars from an ATM using a debit card linked to your home bank account.
Banks usually impose daily and/or weekly limits for cash withdrawals, so it may take some time before you're able to pull out enough money to purchase your vehicle.
Keep in mind that your bank will probably exchange your funds for dollars at an unfavorable exchange rate, and your bank and/or the bank linked to the ATM may charge you transaction fees.
Paypal can be a solution
Nowadays, almost every person in the US has a Paypal account. This can be a good option to pay individual sellers, but relatively few dealers have Paypal accounts.
Before transacting, check the fees that Paypal charges for sending funds from your home currency to a seller in US dollars.
Bank transfers
You might consider a bank transfer to pay for your vehicle, but this method can be difficult.
The US banking system doesn't interface very well with the rest of the world. (We don't use the IBAN system, for example.)
Sending a wire transfer into or out of the United States might be one of the most stressful things you ever do - the transfer process can take as long as 7-10 business days, and while it's happening, neither your bank nor the receiving bank will be able to tell you where your funds are.
Wise: the best way to pay for a vehicle in the US
visitor.us has been helping international visitors to the United States buy vehicles since 2017, and Wise (formerly known as Transferwise) is the best method we've seen for paying for a vehicle in the US.
There are four steps to paying for a vehicle with Wise:
- Open an account with Wise and get a bank account for your home currency, as well as a US dollar bank account,
- Fund your home currency Wise bank account with a transfer from your home bank,
- Transfer your funds from your home currency Wise bank account to your US dollar Wise bank account (this happens instantly, and with fees 2-4x lower than traditional bank fees),
- Pay the seller from your US dollar Wise bank account (transfer happens in 24 hours or less).
Keep two things in mind about timing your vehicle payment.
Payment timing: Pre-fund your Wise account
Do you really think that your home bank or Wise are going to let you transfer thousands of dollars to a brand new account without asking any questions?
Don't wait until the day you want to pay for your vehicle to fund your Wise account - do it ahead of time.
But what if you transfer funds into your Wise account and find a vehicle that costs less than you planned?
Easy - get a Wise debit card and spend your US dollar balance while you'e in the US, and top it up when you need more!
Payment timing: your security
While US domestic bank transfers happen much quicker than international bank transfers, they don't happen instantaneously. They can take a few hours or even a couple of days (if you initiate payment on a weekend) to complete.
If you're using a bank transfer to pay for a vehicle in the U.S., there will always be a span of time where the vehicle seller has both the vehicle and your money.
Your job is to manage the risk of something going wrong here.
If you're buying from a dealer, there's not much of a risk. They're bonded and insured and they have a reputation to uphold. It's not in a dealer's interest to sell a vehicle to another person after they've already sold it to you.
Individuals aren't usually bonded and insured, and they're not as interested in upholding their good reputation for selling vehicles. The risk is that an individual takes your money and sells the vehicle to someone else.
This is why you should document the sale with a Purchase and Sale Agreement or a Buyer's Order, which we'll cover in the next section.
We've done this a time or two
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Completing the documentation
You don't own a vehicle until its paperwork is complete. Here's how vehicle documentation works in the US.
Purchase and sale agreement / buyer's order
A contract to purchase a vehicle (sometimes called a Purchase and Sale Agreement, or a Buyer's Order) is not necessarily required to purchase or sell a vehicle. But it's usually a good idea.
As a vehicle buyer, you want to protect yourself against the seller selling the vehicle to someone else while your funds are in flight.
A Purchase and Sale Agreement or Buyer's Order documents your agreement with the seller to purchase a specific vehicle for a specific price.
While complex agreement templates exist, a handwritten document, signed by both parties, that lists the vehicle's year, make, model, VIN, agreed price, and the names of the buyer and seller can be a binding agreement.
But an agreement to purchase a vehicle isn't sufficient to actually transfer a vehicle to a new owner. To transfer ownership, the vehicle's title needs to be completed and given to the new owner.
The title: a vehicle's official ownership document
You do not own a vehicle until its title is properly assigned to you.
The image of the title above is the ownership document for a 2023 Honda motorcycle owned by visitor.us founder, Matt Copenhaver.
If you were to buy this bike from Matt, you wouldn't own the bike until Matt signed the Seller's Section of the title in blue or black ink, and handed the title to you.
You would then complete the Buyer's Section of the title and submit the title to the registration authorities in the US state in which you will register the bike.
Because a vehicle's title is its official ownership document, images, scans, or photos of the document are not accepted, as this would create the potential for multiple people claiming ownership of the same vehicle.
The US state where you register the bike will issue you a new title with you named as the registered owner.
Hire the experts
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Conclusion
Congratulations! You've just taken the first step to ditching the rentals and buying a vehicle in the US.
Remember, there are four things to keep in mind when buying a vehicle in the United States:
- Identifying the vehicle,
- Checking the vehicle out,
- Paying for the vehicle, and
- Completing the documentation.
After purchase, your next step will be registering your vehicle, which is the process of formally transferring ownership of the vehicle into your name and obtaining permission to drive your vehicle on public roadways.
For more information about the registration and ownership transfer process, check out our guide, How to Register a Vehicle in the US as a non-US Resident.
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