Buying a car in the US: Complete guide for expats

Can a foreigner buy a car in the US, and if so, how?

This guide covers all you need to know. Plus we’ll touch on how Wise can help expats and residents manage their finances when making significant purchases like cars in the US, offering competitive exchange rates, low transfer fees, and transparent pricing that can help you save money compared to banks

Key takeaways

• You can buy and register a car in the US with very few restrictions – but bear in mind you’ll need a valid driving license to drive it away
• When you register your car you must provide a set of documents to prove legal ownership and pay fees which vary depending on vehicle type and other factors
• You may be able to drive in the US using your foreign license for a short period before you need to convert to a local license – this depends on the state and where your license was issued
• Once driving you need to carry your driving license and registration card in the vehicle – in some states you also need registration tabs (or stickers) on your license plates
• It’s mandatory to have at least third party personal injury insurance which you can arrange through a broker
• To make a major purchase like a car in the US, you may find you get a better deal if you pay with Wise. Wise lets you convert currencies with the mid-market rate and low fees, great if you’re buying as an expat

How to buy a car in the US: Step-by-step process

Let’s jump right into the detail – here’s how to buy a car in the US in a few simple steps:

1. Set a Budget and Secure Funding:

The price of buying a car in the US can vary enormously depending on the vehicle type, age and condition. To make the purchase process easier, it helps to start with a realistic budget. You can choose to pay for your new car in the US in cash, by taking out a loan in the US or in your home country, using a hire purchase scheme or by getting dealer financing for example.

Each option has its own advantages and disadvantages – if you’re sending money from another country to the US to pay for your new vehicle, check out Wise as a low cost secure route to transfer funds online and through the Wise app.

2. Research and Select a Vehicle:

Now you know what you have to spend, you can research which car suits your needs. There are plenty of sites online to inspire you – consider whether you want to buy new or used, and then invest some time searching and filtering the options on dealership websites or umbrella resale sites in your local area.

3. Due Diligence and Inspections (Crucial for Used Cars):

When you buy a new car from a dealership you have a point of contact if you’re unsure about the vehicle history or condition – but buying second hand through a private sale means taking the time to check the car out yourself.

Important steps include checking the vehicle and its history, which you can do with sites like Carfax. You can generate a report on the specific vehicle which covers previous owners, accidents and other important factors which can impact the vehicle value and safety.

When you view the vehicle be sure to get a good feel for the condition it’s in, and consider having a mechanic check it over to spot any issues you may not immediately see.

4. Gather the Documentation:

When you purchase the vehicle the seller will need to pass you some key documents, and you’ll need to register the car in your own name with the Department for Motor Vehicles (DMV) in your local area. The exact process may vary a little state to state. In California as an example, the seller must report the sale within 5 days, and the buyer has 10 days from the purchase to transfer the vehicle’s registration into their name.

5. Secure Payment:

The next step will be to pay for your new car. How you can pay depends on the seller – at a dealership you may be able to pay by bank transfer, cash or check. Dealers may accept credit card payments but not all do – and you may find additional fees apply for a card payment, too. Private sellers may prefer a bank transfer or cash.

If you’re paying by bank transfer from a currency other than USD, Wise can be a good choice with support for fast, secure payments that use the mid-market rate and low, transparent fees.

6. Transfer Ownership and Register the Car:

Once the sale is complete, you’ll need to register the car in your name. This process requires you to have a few documents, but is usually fairly straightforward to follow. Different states may operate this step slightly differently, so you’ll need to check the details for the state you live in. You generally have about 10 days from taking possession of the car to register it.

7. Arrange Insurance Coverage: Before you drive your vehicle make sure you have at least mandatory minimum third party personal injury insurance. Most drivers choose to buy a more comprehensive policy for peace of mind – although this does push up the costs.

Who can buy a car in the US?

You can buy a car in the US with very few restrictions. You don’t even need a license – but you would need a valid driving license to actually drive the car away after the sale.

There’s no restriction on non-residents buying a vehicle in the US provided they can meet all the local requirements including holding adequate insurance and transferring the ownership of the vehicle to their own name.

What are the documents required to buy a car in the US?

When you buy a vehicle the seller is likely to check your ID and proof of address. Upon exchange of ownership, the seller will pass you the vehicle’s documents so you can register it in your name. There are then further documents needed to register the vehicle with the authorities.

States manage the registration process, so you’ll need to double check the exact details required based on where you live. Generally to register your new vehicle you will need:

• Your ID and proof of address
• Your new vehicle’s title (sometimes referred to as a pink slip), signed by the person selling the car
• Details of the mileage if the vehicle is less than 10 years old
• A smog certificate may be needed
• Payment for relevant fees and taxes

If you buy from a dealership, you may find the dealer can give you some support with registering a new vehicle.

You’ll normally need to register your vehicle by visiting a physical DMV location to register your car in person.

Is it allowed to use a foreign national driver’s license in the US?

Yes. You can use your foreign license to drive in the US for around 3 months, although this does vary depending on the state, and where your license was issued. Generally people holding a license from Canada and Mexico have more leeway compared to someone holding a license from Europe for example.

You can only drive the classes of vehicle covered by your foreign license, and you must carry your license at all times. If your license is not in English you may also need an approved translation or an international driving permit.

Understanding the true cost: Total cost of ownership

The total cost of car ownership in the US goes beyond the initial purchase costs. Here are some other things to think about:

• Registration Fees: You pay this at the point of taking ownership and registering your new car. Costs vary by state and vehicle type. Check out your state’s DMV website which is likely to have a calculator tool to help you assess the costs you need to pay.
• Technical Inspection: While it may not be mandatory to have a mechanic look over the car you buy, it’s a good idea to have an expert inspect your vehicle before you hand over any money.
• Mandatory insurance: You must have at least Compulsory Third Party personal injury insurance. Costs vary a lot depending on level of cover, driving history and vehicle type.
• Compliance costs when importing – importing a vehicle into the US can be very costly, but one important factor is that your vehicle must meet local safety and emissions rules, or you’ll be obliged to make changes to it, export it again or have it destroyed.
• On going costs: Finally, budget for ongoing costs like fuel costs, servicing, repairs, and parking. Fuel costs at the time of research sit around 0.89 USD per liter.

Transferring money to buy a car in the US: Fees comparison

Sending money overseas can be a headache with poor exchange rates, hidden fees, and slow transfers. As some providers and banks charge hidden fees, it is important to take a look at the total amount received, instead of only the transfer fees.

Other costs can be added to the exchange rate which can be a surprise – and may mean your recipient gets less than you expect.

Here’s an illustration. Let’s imagine you’re paying for your US car from Europe and need to send EUR to the US to be converted into USD and deposited to the dealership.

Here’s what the transfer would cost you for Wise vs La Banque Postale in France, when buying a popular model of Honda:

	Wise	La Banque Postale
Honda Accord LX Trip (price in USD)	28,295 USD	28,295 USD
Transfer fees	113.70 EUR	37.90 EUR
Exchange rate	1.15975	1.15287
Total sent in EUR	24,511 EUR	24,581 EUR

As you can see here, the car ends up costing more in EUR if you pay using La Banque Postale – even though La Banque Postale has a lower transfer fee for foreign currency wire payments. That’s because La Banque Postale uses an exchange rate markup – a fee added to the conversion rate.

This is hard to spot but can make a big difference on a high value payment like this. In this case, the markup adds extra costs of 147.90 EUR to the transfer.

Wise can help you save money on international transfers by offering mid-market exchange rates, low fees, and fast, secure payments. Plus if you prefer you can get a Wise Multi-currency Account to hold and manage money in multiple currencies when you live an international lifestyle.

Where to Buy Cars in the US

Let’s look at some of the different places where people can buy a car in the US so you can decide which is right for you.

New Car Dealerships

The US has plenty of chain new car dealerships, operated by companies like Penske Automotive Group and Lithia Motors. You can find the local dealerships for the car type you prefer, with a Google search.

When choosing a new car dealership, check for official accreditation and pick a well established dealership which has a good reputation for customer service. Using a dealer may mean you can access good trade-in and warranty options although prices are pretty standard, and so finding a bargain may be harder to manage.

Used Car Dealerships

If you’re buying second hand you can go along to a physical used car dealership close to your home, to look at the vehicles in stock.

You’re likely to come across a broad range of dealership sizes and services – if you’re looking for a warranty or a finance package as well as the vehicle, it’s worth shopping around to find a dealer which can offer everything you need under one roof.

Online Car Purchasing

Online sales platforms like cars.com offer comprehensive search functions to help you find vehicles you’re interested in from private sellers and dealers.

Looking for your next US car online makes it far easier to compare your options and short list different vehicles. However, the chances are that you’ll need to complete due diligence checks yourself and the platform won’t be able to help if there are issues.

Make sure you understand the legal protections offered by the site you choose before you buy.

Other Private Sellers

Aside from online umbrella sites you may also find private sellers advertising locally, in newspapers and stores, or through word of mouth. If you’re lucky you may find a great bargain, but in this case you’re highly unlikely to have much legal protection and no warranty if the vehicle fails or has issues you were unaware of.

If you’re meeting private sellers, be sure to take precautions for safety, such as telling someone where you are, checking the seller ID, and running a check on the vehicle history in case it can not be legally sold by that individual.

Electric cars and hybrids

Hybrid and fully electric cars are growing in popularity in the US. By the end of 2024, government sources reported that over 20% of sales of light duty vehicles were hybrid, electric or plug in hybrid.

Teslas are among the most popular brands of electric vehicle, with close to 50% of the market at times – other popular brands include Ford, Chevrolet and Hyundai. There were previously Federal tax credits for some electric vehicle sales, which have stopped at the time of research. However, as these policies and approaches are under review frequently it’s worth checking the most up to date details before you decide to buy.

Car prices in the US

As you’d expect, car prices in the US vary a lot, with different pricing ranges for each vehicle category and brand. The good news is that there are several different ways to get a pretty good feel for the costs of your vehicle, particularly if you’re planning on buying new.

One way to get an idea of the costs of new cars is to look on a price aggregation site like Numbeo, which takes user information about costs of living on a country and city level. This data is dynamic and changes frequently to reflect a live picture of the average cost of anything from a beer in a bar, through to a car.

Here’s an idea of the costs of buying a new car in the US taken from this data:

Car type	USD average cost
Volkswagen Golf 1.4 90 KW Trendline (Or Equivalent New Car)	34,501.73 USD
Toyota Corolla Sedan 1.6l 97kW Comfort (Or Equivalent New Car)	26,049.10 USD

Another option is to pick the type of car you like, and look on a dedicated dealership site. To give an idea, here are the advertised prices for various models of 2026 Hyundai – one of the most popular car brands in the US:

Car type	USD list cost
Elantra Hybrid	25,450 USD
Sonata Gas	27,300 USD
Palisade Hybrid SUV	47,520 USD
Santa Fe SUV	34,800 USD

Importing a car to the US

Importing a car to the US can be done, but there are some important barriers to be aware of. Cars must be fully compliant with US law, which may mean making extensive changes to your vehicle to allow it to enter the country. Even if the initial outlay for your vehicle is lower elsewhere, you’ll need to weigh up the costs and hassle against any price upside you may get by buying your vehicle in another country.

If you do decide to import your next vehicle to the US, using specialist importers can help the process run a lot more smoothly vs self-importing. You’ll have an expert on hand to help you navigate all the processes needed, and to make sure you cover all your legal duties properly.

Import process and requirements

The process of importing a vehicle to the US involves several different costs, which can include:

• Customs duty
• Vehicle registration fees
• Federal or state taxes such as gas guzzler tax

To help you decide if it’s worth it in your case, here are the basic steps to importing a vehicle into the US:

1. Research whether your vehicle can be imported legally, or if modifications are required – usually your vehicle needs to be approved by certificate or exemption to show it meets safety and environmental standards
2. Gather the required documents: Including the shipper’s bill of lading, the bill of sale, foreign registration, EPA form 3520-1 and DOT form HS-7.
3. Clean your car before shipping: Have your car steam-sprayed or cleaned thoroughly before shipment – an environmental requirement
4. Get customs clearance by paying all your required taxes – using an agent makes this process far easier
5. Register your vehicle according to the local requirements in your state

Bear in mind that the process can vary depending on the vehicle type and where you import from. Some vehicles must be imported through an independent commercial importer (ICI), which can be a very expensive process indeed.

If you need to pay your taxes or fees from another country, you could cut the costs of currency conversion by using Wise. Get a Wise account and add money in the currency you prefer. You can then order a Wise card to make your payment digitally, with currency conversion that uses the mid-market rate and no foreign transaction fee.

Required car equipment and documentation

You’re required to keep your driving license and the car’s proof of registration with you when you drive in the US. It’s also legally required to hold adequate insurance – keep either physical or digital proof in your vehicle in case you are asked for it by a police officer.

Some states require you to display registration stickers on one or both registration plates, which may need to be updated annually. Check the rules in your state to make sure you’re compliant.

Aside from this, there are many recommended items to keep in your car, such as a first aid kit, spare tyre and high visibility jacket.

You must ensure that all passengers use seatbelts, and children use appropriate child restraints based on their size, weight and age when driving.

Tips for buying a car in the US

• Buying a car in the US means checking the vehicle is being legally sold and is roadworthy – if you’re not confident in navigating the process, buying from a dealer can give peace of mind
• Be wary of offers that are too good to be true. Like elsewhere in the world, US criminals may try to scam car buyers in various ways
• Get your car insured before you drive – brokers can be a good way to navigate an unfamiliar market and get an excellent deal
• If you’re buying from a foreign currency use Wise to send your payment, with the mid-market rate and low, transparent fees

Conclusion

Buying a car in the US isn’t too hard to do, but it may not work in the same way that you’re used to at home. It’s important to understand the legal requirements to buy and register a vehicle and what you must do to drive it legally in the US. Plus, as it’s not cheap to run a vehicle, be sure to budget for ongoing costs like insurance, fuel and maintenance.

Save money when you buy a vehicle from abroad, with Wise. Wise can be an indispensable financial partner, for those navigating international transfers and seeking transparent, cost-effective ways to manage car purchase funds. Get the mid-market rate, secure payments and a fast and streamlined service.

Frequently asked questions (FAQs)

How do I transfer money from my home country to pay for a car in the US?

Check out Wise as a cost effective option for sending money to the US for your new car. Wise payments can be sent to the US from 140+ countries with low, transparent fees and the mid-market rate without any mark-up. There are high limits, and fee discounts for large amount transfers. Plus you’ll get help from a dedicated support team for high value transfers if you need it.

How can I avoid losing money on currency exchange when buying a car?

Being ripped off on currency exchange is a major concern for expats purchasing big-ticket items. Choosing a provider which uses the mid-market exchange rate with no hidden fees can help. Wise has a transparent fee structure, competitive rates, and offers the mid-market exchange rate so you suspend less on fees.

Can a temporary resident buy a car in the US?

You can usually buy a car in the US as a temporary resident. Bear in mind that some states may require you to get a local driving license as little as 3 months after arriving.

Do I need credit to buy a car in the US?

You can buy a car in the US with cash, or if you have a local credit history you may qualify for a loan or financing agreement.

Useful sources for buying car in the US

(Information last checked on 20th of November, 2025)

• Wise – Low cost international transfers and currency exchange which uses the mid-market rate
• Bank of America – Bank top tips for buying a car
• Cars.com – Car sale site for inspiration and pricing guide
• Carfax – vehicle inspection reports and sale site
• Autocheck – vehicle inspection reports site
• US Customs and Border Protection – importing a car
• Environmental Protection Agency – importing a car