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:

• Finding a vehicle,
• Checking the vehicle out,
• Paying for the vehicle, and
• Completing the purchase documentation.

Let's jump right in.

Finding a vehicle

In the United States, there are two main channels to find a vehicle: through dealerships or from private sellers. (A third channel, auctions, is also worth mentioning.)

Dealerships offer a wide selection of new and used vehicles with potential warranties, while private sellers often provide more competitive prices on used vehicles, though with fewer guarantees.

Buying from a dealer - search portals

One way to search for vehicles would be to go to every auto dealer’s website and search for vehicles there.  But that’s time-consuming.

A faster way to search for vehicles sold by dealers is to use a vehicle search portal, which aggregates listings from multiple dealerships, allowing you to sort and filter the results.

In the US, vehicle search portals tend to specialize in vehicle type: the ones that are good for cars and trucks aren’t as good for motorcycles and motorhomes, and vice versa.

We’ll share our favorite search portals by vehicle type below.

Cars and trucks

The following search engines aggregate cars and trucks for sale by dealers and make it easy to sort and filter:

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And Autotrader.com cars and trucks for sale by dealers and individuals.

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Recreational Vehicles (Motorhomes)

If you're looking for a motorhome (we call them Recreational Vehicles, or RV's in the US), you should check out these search engines:

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W‍hile not technically a search portal, many buyers find used motorhomes for sale offered by rental companies, such as Cruise America.  Rental companies typically keep motorhomes in service for a fixed number of years or mileage (e.g., 5 years or 150,000 miles).  When they reach the end of their rental life, the rental company refurbishes them (removing all of the rental company’s branding) and sells them to the public. While these vehicles may have a bit of wear and tear, the rental company has serviced them regularly through their rental life and made any necessary repairs.

Motorcycles

If you're planning to visit the US on two wheels, is an excellent resource.

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Buying from individuals

‍If you’d prefer to buy your vehicle from an individual instead of a dealership, there are several great places to start your search.

Craigslist is a great place to search for used vehicles sold by individuals because it offers a wide variety of listings, in every city and town in the US, often at lower prices compared to dealerships.

Facebook is another great place to search for vehicles for sale by individuals. While you might begin your search on Facebook Marketplace, joining groups that align with the geography or interest of your visit can also be a great place to find vehicles.  For example,

• Travelers of the Panamerican Highway through the Americas often list list their vehicles on the Panamerican Travelers Association page,
• Porsche lovers find buyers and sellers on the Porsche 911 Buy and Sell page, and
• Austin and Surrounding Areas Buy, Sell, Trade connects buyers and sellers in and around Austin, Texas.

So if your visit has a specific theme, vehicle, or location, use the search function in Facebook, join a couple of groups, and start watching for vehicles that suit you.

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Buying from auctions

A word of warning when it comes to searching for vehicles at auction:

• most auction venues are only accessible by licensed auto dealers,
• many that are available to individuals are for damaged (salvage) vehicles, and
• some are great for niche situations.

Dealer-only auto auctions

Most auto auctions, such as Manheim and Adesa are accessible to licensed auto dealers only, so cross these off your list.

Salvage auto auctions

Cheap vehicles can be found at auctions such as IAAI and Copart, but they almost come with a salvage title.  Converting a salvage title to a rebuilt title can be a complex process, and the demand for vehicles with salvage or rebuilt titles is significantly lower than demand for vehicles with clean titles, so the vehicle will be harder to sell at the end of your visit.

Niche auto auctions

For certain collectors, vintage, and exotic vehicles, the auction sites Bring A Trailer and  can be excellent resources.  

Here, sellers list their vehicles directly, and the auction platform facilitates the transaction, ensuring safety for buyers and sellers alike.

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Vehicle Values

A vehicle typically has three values, listed here in descending order: retail, private party, and wholesale/trade-in.  Retail is the price that you will pay for a vehicle sold by a dealership, private party is the price you will pay for a vehicle sold by a non-dealer individual, and wholesale/trade-in is the price that a dealer will pay you for your vehicle.

The most widely used vehicle price guide in the US is Kelley Blue Book.  

Other price guides include Blackbook and National Auto Dealer's Association (NADA).

As you conduct your vehicle search, check price guides to understand whether the offer price is high, low, or in-line.

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Sales taxes and registration fees

‍Whether you're buying from a dealership or an individual, sales taxes and registration fees are never included in the listed price.  This is because, with a few exceptions, sales tax and registration fees are due where a vehicle is registered, not where it is purchased.

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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.

Dealers almost always offer a vehicle history report on their vehicles.  Some, but not all, private sellers offer a vehicle history report.

If you want a history report on a vehicle you’re considering, but the seller doesn’t offer one, they can be purchased for $20 - $40.

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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.

A note on titles with a salvage brand:

Salvage vehicles are those that have been damaged to the extent that the cost of repairs exceeds a certain percentage of the vehicle's value, often due to accidents, natural disasters, or other incidents. These vehicles are typically deemed a total loss by insurance companies and are issued a salvage title. Typically, vehicles with salvage titles cannot be registered until their title is converted to “rebuilt.” Converting a salvage title into a rebuilt title after the vehicle has been repaired often requires physical inspection by law enforcement in the state where the vehicle will be registered.

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.

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Methods international travelers (usually) can’t use to pay for a vehicle‍

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Credit or debit card

Auto dealers typically don’t accept payment in full for a vehicle via a credit or debit card, for a couple of reasons.

First, 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.

Second, 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.

While dealers don’t typically accept cards for payment in full for a vehicle, they almost always accept cards for deposit payments on a vehicle.  In these situations, the deposit amount is a fraction of the vehicle’s full cost, so the card processing fees are much less significant, and the risk of charge dispute or reversal is much lower, because the dealer hasn’t let the vehicle leave its property.

While most dealers don’t accept cards, a handful are willing to take the risk for customers who will pay the additional card processing fees.

Considering buying a vehicle from a private (non-dealer) seller, 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, you should probably make other plans.

Cashier’s check

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.

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Social payment apps

An increasingly common way to pay for vehicles in the United States is via social payment apps like Venmo and Zelle.

However, as of the time of this writing, these services are only available to people with a US social security number.

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Methods international travelers can use to pay for a vehicle‍

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Cash

Money talks.

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.  If you plan on using this method, be sure to call your bank ahead of time and let them know that you plan on withdrawing a large amount of funds from a foreign ATM.

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

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.

Traditional bank transfer

You might consider a bank transfer to pay for your vehicle, but this method can be difficult.‍

The US banking system moved to electronic methods when the Automated Clearing House (or ACH) system was introduced in 1972.  Being one of the first banking systems to do so, ACH is one of the oldest electronic banking systems in the world.  A lot of inter-bank settlements are still done by fax, by example.

The banking system in your country (whether its IBAN or something else) is likely decades newer than ACH - and it almost certainly doesn’t automatically interface with ACH.

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.

Besides being slow and opaque, traditional bank transfers can be expensive.  While your bank may advertise international transfer rates of $25 or $50, the exchange rate that they apply to your transfer will likely be favorable to the bank (and unfavorable to you).

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Our recommended method for paying for a vehicle in the US: Wise

The two problems with traditional bank transfers are their cost (unfavorable exchange rates) and their speed (very slow).

Wise, our recommended payment method, solves both of these problems.

Exchange rates

When you Google the EUR/USD exchange rate, for example, you see the mid-market rate.

When you make a traditional bank transfer, however, the bank doesn’t apply the mid-market rate.  Instead, it applies a rate that’s much more favorable to the bank than the mid-market rate, and keeps the difference.

The difference between the bank’s rate and the mid-market rate may only be fractions of a percent, but when you’re transferring enough money to buy a vehicle, those fractions can add up to a lot of money.

Wise, on the other hand, applies the mid-market rate to your international transfer and adds a transparent fee, so you know exactly how much the transfer will cost you.

And transfers with Wise can be up to 3x cheaper than traditional bank transfers.

Payment speed

When you make a traditional bank transfer from a German bank (in EUR), for example, to a US bank (in USD), the transfer must be passed between multiple banks, in different time zones, using different systems.  The process can be frustratingly slow.

Instead, Wise has bank accounts in Europe and the United States (and in many other parts of the world) that can quickly and easily communicate with each other.

When you use Wise to pay for a vehicle in the US from the Eurozone, for example, you simply open a EUR Wise account and a USD Wise account.

When you make a transfer from your EUR Wise account to your USD Wise account, Wise applies the mid-market exchange rate and credits your USD Wise account instantly.

At the end of each weekday, Wise consolidates all of the EUR to USD payments and all of the USD to EUR payments on its platform and transfers one net amount to itself.

This is how Wise can transfer money internationally so quickly and cheaply.

How to use Wise to pay for a vehicle in the US

Using Wise to buy a vehicle in the US takes a little bit (but not much!) planning ahead of time.

Wise is a regulated banking platform, so they need to verify the identity of all users before they can start sending funds.  Verification can sometimes take a couple of business days.

Like any financial platform, Wise has to be constantly on the lookout for fraud.  A trademark of fraud is speed - someone sets up an account on Monday and then tries to transfer a huge sum of money on Tuesday.

Transactions like this, even if they’re not fraudulent at all, may get flagged for review and delayed, which can screw up your plans.

So plan your transfer ahead of time, perhaps doing it in batches.  This will ensure that any payments that get flagged for review don’t hurt your schedule.

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!

Once your funds are in your USD Wise account, you can transfer them to the seller using a domestic ACH transfer.  Domestic bank transfers within the US usually take one business day, as opposed to 7-10 business days for international bank transfers into the United States.

And if you want to sell your vehicle at the end of your visit, using Wise to accept the funds and transfer them back to your home currency will probably be your most cost-effective option.

So go ahead, set up a Wise account now.  Not only is it the fastest and cheapest way to send money internationally, it’s free to set up an account.

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Payment timing and security

As described above, a common way for Americans to pay for vehicles is with a cashier’s check.

Introducing another piece of paper into the payment process doesn’t seem very efficient, so why is it done? For security, as this allows for payment and title delivery to happen simultaneously.

A vehicle’s official ownership document is called a title, and vehicle ownership transfer requires handing the properly signed title - a physical piece of paper - to the buyer.

US domestic bank transfers don’t happen instantly - they take about one business day to hit the recipient’s account.  This can expose buyers and sellers, especially non-dealer buyers and sellers, to risk.

Buying from a dealership

If you’re buying your vehicle from a dealership, you can be confident that, if the dealership signs a contract with you and provides their bank details, they will deliver the vehicle’s title to you after your money hits the dealership’s account.

Dealership laws in many US states allow dealers up to 30 days to deliver a vehicle’s title to a buyer.  This allows dealers time to pay off a loan on a vehicle that they took as a trade-in from another customer, for example.

But dealership laws often impose hefty fines on dealers that do not deliver titles within the legally required time period.  And if done too frequently, the state can revoke a dealership’s license or call its surety bond.

And in this age, when everyone has a megaphone, dealers know that customers can potentially hurt their reputation if they fail to deliver a title on a vehicle that they sold.

In short, dealership laws and dealers’ interest in maintaining a good reputation protect you when buying a vehicle from a licensed auto dealer.

Buying from a private party

But if you’re buying a vehicle from a private party - who doesn’t have a license, bond, or reputation at stake - you may want to exercise a bit more caution.

Here’s a hypothetical scenario that may start to explain the risks involved in buying a vehicle from a private seller.

You find a car that you like on Craigslist, contact the buyer, and take a test drive on a Saturday.  You love the car, and agree to buy it from the seller.  You initiate a bank transfer to the seller that day, but because it’s a weekend, the transfer won’t happen until Monday.  You go back to your AirBnB and make plans to check out on Monday, happy that you found the perfect vehicle for your visit.

On Sunday, another buyer contacts the seller and offers to pay significantly more for the vehicle than you agreed to, and the seller takes the higher offer.  When you call the seller on Monday to see if the payment went through, he says, “Sorry, someone else bought the vehicle.  I’ll return your funds when they hit my account.  What are your bank details?”

Now you have to scramble to find accommodation, find another vehicle, and hope that the seller returns your funds in a timely manner (or at all).

You might say, “Hey, that is risky.  I’ll just insist that the seller gives me the title before I make payment.  Or I’ll make him watch me initiate the payment in my banking app, and then give me the title.”

However, this creates risk for the seller that he may not be comfortable with.  You might show the seller that you’re initiating a bank transfer on your phone from something that looks like a bank’s official app, but is actually a fake app.  The seller doesn’t want you to drive off with the vehicle and its title until the money actually hits his account.

So unless the funds and vehicle title can be exchanged simultaneously, the buyer or the seller is exposed to the actions of someone that they don’t know, who doesn’t have a license, bond, or reputation at stake.

Using an escrow agent for private party transactions

In the previous section, we saw how buying a vehicle from a private seller can be risky if payment and title can’t be exchanged simultaneously.

How can this problem be solved?  With an escrow agent.

In transactions that use an escrow agent, buyers send their funds to the escrow agent (which are deposited in escrow, a segregated account), and sellers send the vehicle’s title to the escrow agent.  The agent holds the funds and title until all the terms of the sale are met, ensuring that the buyer receives the vehicle in the agreed-upon condition and that the seller gets paid. This process helps prevent fraud and disputes, offering an added layer of security for all parties involved.

Our preferred escrow agent is Keysavvy, who focuses exclusively on private party vehicle escrow.  

Keysavvy is a licensed and bonded auto dealership, backed by Porsche Ventures.  They have have facilitated dozens of transactions involving visitor.us customers, all of whom have given positive feedback about the service.

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Completing the purchase documentation

You don't own a vehicle until the seller signs and turns over the vehicle’s title.  Here's how vehicle documentation works in the US.

Buying from a dealership

Agreement documentation: buyer’s order

Dealerships typically document vehicle sales with a buyer’s order, which outlines the terms and conditions of the vehicle purchase, listing the details of the vehicle, as well as price, additional fees, financing terms, and warranties (if applicable).

Your salesperson will typically provide a buyer’s order when the vehicle, price, and other parameters have been agreed upon.

You will be asked to sign first, before the dealership’s sales manager signs.  The buyer’s order is not binding until both parties have signed.

While many dealerships began to accept electronic signatures during the pandemic, most still require a wet ink signature on a vehicle’s buyer’s order.  This can be a challenge if you’re buying from abroad, but you may be able to arrange to have documents couriered between yourself and the dealership.

Title delivery

A vehicle’s title is its official ownership document.  In order to transfer the vehicle into your name (a process called registration), the authentic title (not an image, scan, or photo of it) must be submitted to the DMV in the US state where your vehicle will be registered.

There is no standard title delivery process for vehicles purchased from a dealership.  Some dealers keep their vehicles’ titles on-site in a vault; others keep them in a safe deposit box at a bank, and retrieve them once a week.  Some vehicles were bought by the dealership from another private party as a trade-in, and the title needs to be re-issued because when the dealership paid off the loan on the vehicle.

If you are buying the vehicle in the same state that the vehicle will be registered, the dealership may submit the vehicle’s title to that state’s DMV on your behalf.

If you are buying the vehicle in a state other than the one where the vehicle will be registered, the dealership will most likely send your vehicle’s title to the address that you provided when you purchased the vehicle.  You will be expected to take that title to the DMV and register the vehicle yourself.

Buying from a private party

Agreement documentation: bill of sale

Private parties typically document vehicle sales with a bill of sale which details the buyer, the seller, the vehicle being sold, the price, and any conditions related to the transaction.

Bills of sale between private parties can be signed in ink or electronically.

Title delivery

A private seller should have the “title in hand,” or physically in their possession, and ready to hand it to a buyer at the time of the transaction.

The most common reason why a seller wouldn’t have title in hand is that the vehicle has an outstanding lien (or loan against the vehicle), and the bank has physical possession of the title.  In this case, the vehicle cannot be transferred to a new owner until the lien is satisfied (i.e., the loan is paid off).

As a reminder, we recommend using an escrow agent whenever buying a vehicle from a private party to mitigate these risks.

Buying from an auction

Two types of auctions are open to the public: salvage vehicle auto auctions and niche auto auctions.

Salvage auto auctions usually have an auto dealer’s license in the state in which the auction is located, and the auction typically sells you the vehicle.  These types of auctions follow the dealership process described above.

In contrast, niche auto auctions typically don’t have an auto dealer’s license.  Instead, they are platforms that facilitate connections between buyers and sellers.  Therefore, when you buy a vehicle through one of these platforms, you are actually buying it from a private seller, and will follow (with support from the platform) the private party process described above.

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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.

If you’d like to keep learning, please check out the following resources:

• How to register a vehicle in the US as an international visitor
• How to insure a vehicle in the US as an international visitor

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Thanks for reading!