For the first time car buyer in the USA.

If you just came to the country , first things first - A big welcome to you.  I am sure you are looking around and observing the different ways means and techniques of living in this great country. And I am sure that these are way off than that you would do back in India or your native country. So you would have discovered almost instantly that a car is a means here , a necessity , instead of a comfort or luxury. Things would be bit easier if say Walmart was 5 mins walk and your work or school an easy walk,or a commute by train or metro. Sooner or later you would need a car and hence starts your journey to buy a car here. Before I begin I would highly recommend you to read each and every article under the Buying topic so that you completely understand what you are up against. Also review the Glossary of Terms to understand the lingo here. If you are a student , you have had the advantage of University orientations and guidance by seniors who have taken the beaten path. Here is the general steps to acquire your first car in the USA.(As of this writing)

Step 1 :- Get a Social Security Number (or Social or SSN) :- Guard this number with your life and do not give it to anyone unless you find out why they need it. An employer needs it to report your tax to the govt. A car dealer or a loan provider needs it to find your credit history and credit score. Each time a party runs a credit check your score actually decreases owing to "frequent credit check". So if you don't have a credit history here in this USA , DO NOT GIVE anyone your SSN for a CREDIT CHECK it is not worth it.

Step 2:- Get a Drivers License:- Each state have a bit different process, but the general idea is you go in to the DMV office, give them a copy of your foreign country license (if available) and proof of your legal status. There is a computer based quiz you need to clear. They then give you a temporary license and after 30 or so days you go in and take a driving test to get your permanent license.

Step 3:- Buying car and buying insurance coverage. I will elaborate this process a bit and give you a few examples below.

Step 4:- Registration : With  in a few days, go to the DMV office with the Title and proof of insurance  to get the car registered.  They give you temporary tags ( permanent tags and title  arrive by mail) . When you buy from a dealership , the dealer will take care of this step.

The Buying Experience :- Buying car can either be painful or a fun learning experience depending on the way you look at it. You probably have seen miles and miles of new and used car dealers and would have thought , ha so many cars ....wait till I get my license ..buying should be a breeze. Let me tell you now itself , it will take a bit more than a breeze.  Lets say you already have had a car back home, you come here and are inclined to get an 'upgrade'. Perhaps you have your eye on the late model Honda or the Lexus or a Benz SUV or the Beemer.

Now most of these used cars sell in the 8K to 25K range. If you dont want to spend it from savings or if you are just starting your savings here , you probably need a loan to buy one. Here is where the issue is. Most lenders don't want to give loan to some one with zero credit history. These dealers will happily run your credit check and ruin your chances of even beginning a good credit history. So don't give them your  SSN ,even when they ask for it.  Instead what you could do is - tell them you have "No credit history".  Here are some ways you can get a loan at some (and some shady) car dealers, even with NO Credit.

1.) By offering to pay 30 to 60% Down.

2.) By agreeing to pay an insane APR(or interest rate)  on a loan like 25 to 40%,  while the usual rates are just 3 to 5%

3.) Providing a Co-Signor or a Guarantor for the loan , like a friend or a relative.

4.) A combination of the above.

Note on Fraud :-  Some dishonest dealers might sell you car with issues , may not do finance paper work correctly , do not disclose full terms and may be late to send in your registration , so watch out for these scams and trouble items.

A Good Solution : My own opinion and honest advice is not to bother with all this. Just get a car that you can afford by paying cash, use it for a few months till you have some credit history and then sell it and then buy a good car. Treat these few months as a good learning experience while building your CREDIT. The car does not have to be fancy and basically help you commute from point A to Point B. These cars are in the 2K to 5K$ range. Buy from a private seller (see our Buying Topics). Get it inspected. Make sure to visit a local insurance agent to buy insurance coverage. Local agencies can handle first time insurance buyers, better than online or phoning in insurance companies. You will realize that in a few months, when you have a established credit, your car buying situation will change dramatically. If you follow the tips and advises given here, you should be on your way to get a loan online (or at your local bank) at aggressive rates and end up buying your dream ride at a decent bargain deal.

Good Luck !

(PS :- If you are a first time buyer looking to buy a Ferrari or Lambo on cash, none of the above applies, so drop me a line , I will be happy to hook you up with good dealers in the NYC,LA or Miami areas ..Lol)