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Buying a Car

In many parts of the world, a car is still considered a luxury item. It is nice to have one, but you don't normally need it. In the United States, however, a car is very common, relatively more affordable, and even necessary in some cases.

Many international students choose to buy a car within the first couple of years after they arrived in the US. Usually a used one first, then a new one sometime after graduation. But buying a car can be tricky. So we are offering some tips, as well as an overview of the car buying process:

1. How much can you afford?

Consider a car's purchase price, insurance cost, gas and maintenance expenses, etc., and come up with a number you can truly afford. A rule of thumb is that if you can't pay cash for the car, you probably shouldn't buy it. It doesn't mean you have to always buy a car with cash, but if you have to take out a loan for a 10-year-old Camry, it is a sign to stick with your mountain bike.

Over spending is a common problem in America, where you see people financing the purchase of an iPod. So it is easy to step into the fantasy world of "living beyond your means."

2. New or Used?

A new car is fabulous in many ways: no prior history to worry about, full manufacturer's warrantee, newest technology, generally better build quality, and of course, the new car smell. The drawback is obviously a higher price, and the certainty that your car will lose 20% of its value the minute you leave the dealership.

A 2- to 3-year-old car is a good alternative to new cars. The previous owner has taken the hardest hit on depreciation, and also tested out the car for you.

Students may prefer even older cars to get around the campus. You can easily find an 8-year-old Honda Civic at great bargain, and don't have to worry too much about hitting a curb at night.

In recent years car dealers and manufacturers have really touted "certified" used cars, which must pass multi-point inspections before being labeled as "factory certified." As a result, expect to pay more than buying from individuals. It is worth consideration If you are looking for a late model vehicle, and don't want to spend too much time searching.

3. Buy or Lease?

A lease is for people who prefer to have a new car every two to three years, don't drive more than the annual limit, and take really good care of the car. You don't actually own the car, unless you exercise the option to buy it at the end of your lease. So obviously leasing doesn't make much sense financially for a lot of people.

4. Search for a car

There are several ways to search for a used car:

  • Local newspaper classified ads
  • Craig's List website
  • Campus ad postings
  • Autotrader and other local circulations
  •, Ebay Motors, or other national listings

If you are looking for a new car, head to or You need to figure out what exactly a dealer paid for the car: invoice minus kickbacks and other incentives. This is not MSRP - Manufacturer's Suggested Retail Price - which is what you will see on a window sticker.

Also study safety ratings of the cars you are thinking about. Go to and read about federal crash test results and insurance loss reports. You may also be interested in the most-stolen list in America.

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