Buying a Car in the U.S. as an Expat: A Complete 2025 Guide

For many expats, buying a car in the U.S. is not a luxury—it’s a necessity. Unlike in some countries with extensive public transportation, much of the U.S. is built around driving. For newcomers, navigating dealerships, financing options, insurance rules, and registration requirements can feel overwhelming.

This guide breaks down the step-by-step process of buying a car in the U.S. in 2025, covering everything from costs to paperwork, so expats can avoid mistakes and get on the road with confidence.

Why Expats Need a Car in the U.S.

Limited Public Transport Outside Major Cities

While New York, Boston, or San Francisco offer decent public transit, most U.S. cities require driving for daily errands and commuting.

Cost of Transportation Alternatives

Ridesharing (Uber, Lyft): $10–$30 per ride, quickly adding up.
Car rentals: $50–$100 per day.
Long-term reliance on public transport outside big cities: impractical.

Step 1: Decide Between New vs. Used Cars

Buying a New Car

Pros: Warranty coverage, latest technology, lower risk of hidden problems.
Cons: Higher upfront cost, rapid depreciation in first 2–3 years.

Buying a Used Car

Pros: Lower purchase price, slower depreciation.
Cons: Risk of hidden mechanical issues, limited or no warranty.

2025 average prices (Kelley Blue Book):

New car: ~$48,000
Used car: ~$28,000

Step 2: Research the Right Car for Your Needs

Compact cars: fuel-efficient, good for city driving.
SUVs: popular among families, better for suburban or rural areas.
Electric vehicles (EVs): rising in popularity with federal/state tax incentives.

Note for expats: EV charging infrastructure is strong in some states (California, New York) but weaker in others.

Step 3: Understand Financing Options

Paying in Cash

Simplest method, but not feasible for many expats due to high costs.

Auto Loans

Common option for residents.
Expats without a U.S. credit history may face higher interest rates (6–12%).
Some banks offer loans to expats with proof of visa, employment, and income.

Leasing a Car

Lower monthly payments.
Best for short-term stays (2–3 years).
Restrictions on mileage and wear/tear penalties.

Step 4: Car Insurance – A Legal Requirement

In the U.S., car insurance is mandatory in nearly every state. Expats should be prepared for relatively high premiums, especially without a U.S. driving history.

Typical Costs in 2025

National average annual premium: $1,900
Expats/new drivers: often $2,500–$3,500 per year

Factors That Influence Cost

Driving record (new expats usually have no U.S. history → higher rates)
Age and gender
Location (urban vs. rural, accident rates in your ZIP code)
Type of car (luxury or sports cars cost more to insure)

Tip: Some insurers accept international driving records or offer “expat-friendly” policies (e.g., Geico, Progressive, State Farm).

Step 5: Registering Your Car at the DMV

Every car must be registered with the Department of Motor Vehicles (DMV) in the state where you live.

Documents Usually Required

Proof of ownership (title or bill of sale)
Proof of insurance
Passport and visa
Proof of address (lease agreement, utility bill)
Payment for registration fees

Costs

Registration fee: $50–$150 (varies by state)
Title fee: $15–$50
License plates: included in registration

Step 6: Estimate Annual Car Ownership Costs

Buying the car is just the beginning. Expats should budget for recurring expenses:

Insurance: $2,000–$3,000
Fuel: $1,500–$2,500 (depending on mileage and gas prices)
Maintenance/Repairs: $500–$1,200 annually
Registration/Taxes: $200–$500 per year
Depreciation: biggest hidden cost (~15–20% of car value per year for new cars)

Case Studies: Expat Car-Buying Experiences

Expat in California (New Car Purchase)

Buys new Toyota Camry for ~$32,000.
Insurance: $2,800 annually (no U.S. driving history).
DMV registration: $400.
Lesson: New car = reliable but costly in insurance + depreciation.

Expat in Texas (Used Car Purchase)

Buys used Honda Civic for ~$18,000.
Insurance: $2,200 annually.
Maintenance costs higher after 2 years.
Lesson: Lower upfront cost, but watch for repair expenses.

Expat on Short-Term Assignment (Leasing)

Leases SUV at $400/month for 36 months.
Insurance: $2,700 annually.
Returns car at end of contract.
Lesson: Leasing is practical for short-term stays but mileage restrictions apply.

Practical Tips for Expats Buying a Car

Get Pre-Approved Financing – Improves negotiation leverage at dealerships.
Check Vehicle History Reports (Carfax, AutoCheck) for used cars.
Don’t Skip Test Drives – Confirm comfort and performance.
Negotiate at Month-End – Dealers often give better deals to meet sales quotas.
Consider Insurance Before Purchase – Always get a quote for your chosen car model before buying.
Explore State Incentives for EVs – Tax credits may reduce costs for electric cars.

Driving Forward with Confidence

For expats, buying a car in the U.S. can seem complicated, but breaking it into steps makes the process manageable. From choosing between new or used, arranging insurance, registering at the DMV, and budgeting for long-term costs, preparation is the key to avoiding surprises.

In 2025, car prices and insurance premiums remain high, but with careful planning, expats can secure reliable transportation and enjoy the freedom of mobility in their new home.

Buying a Car in the U.S. as an Expat: A Complete 2025 Guide