As a recent immigrant, international student, and/or foreign national, you’re probably wondering whether or not you can lease a car. The short answer is yes, but a lack of any U.S. credit history can make things difficult. In many cases, leasing a car may not even be your best option. Read on to learn more about how leasing a car works and whether or not it’s even a good idea for a non-U.S. citizen.
What to Know Before Leasing a Car in the U.S.
It’s possible to lease a car as a non-U.S. citizen, but you need to be able to provide a valid permanent or semi-permanent residency address in the States. This could include an F1 student visa, work visa, or green card.
Whether or not leasing a car makes sense will depend on your own personal circ*mstances. For example, if you know you only need a car in the short term, leasing a car is more affordable in the short run. Leasing also provides the opportunity to try out the latest cars without buying them outright. On the other hand, there are some definite downsides that come along with leasing a car. Leasing comes with pesky restrictions, fees, and requirements. Not to mention, leasing a car over the long term is almost always more costly than purchasing outright.
Questions to Ask Before Leasing a Car
Do you want to lease a new or used car?
On average, how many miles do you plan to drive in a year?
Will you be able to keep the car in good condition to avoid extra charges?
Are there any lease specials you can take advantage of?
What is the Vehicle Residual Value (how much your car is worth at the end of the lease/how much you can buy the car for once the lease is up)?
Do you understand all of the taxes and fees associated with leasing?
What Do You Need to Lease a Car as a Non-Citizen?
If you want to lease a car as a non-U.S. citizen or international student, you’ll need to meet the various requirements listed below:
A good credit score and history (As a non-U.S. citizen, you won’t have an established U.S. Credit score or history, but may still be able to secure a lease)
Proven ability to make payments
A valid driver’s license (You can apply for a U.S. driver’s license if you are staying in the U.S. on a long-term basis)
Car Insurance (Minimum auto insurance standards are required on leased cars)
Gap Insurance (Optional but recommended)
How to Secure an Auto Loan as a Non-U.S. Citizen
If you decide you want to purchase a car rather than lease, you’ll probably need to take out a loan or find additional funding. Securing an auto loan as a non-U.S. citizen comes with plenty of roadblocks. That’s because lenders in the States rely on credit history and scores, which new immigrants and non-citizens may not already have. You can learn more about building credit as an immigrant here. When it comes to auto loans, you’ll also be required to make a downpayment of approximately 20% for new cars and 10% for used cars.
Your best bet for securing a car loan as a new immigrant is to look for personal loan providers that cater to undocumented immigrants. You’ll still be required to provide additional documentation to make up for a lack of U.S. credit history. At the very least, you’ll need to provide a visa, passport, letter from employer, proof of income, proof of legal presence, proof of residence, and a valid US driver’s license.
As an international student, you may be able to take advantage of additional auto loan programs meant for foreign nationals.
Grow with Upwardli
A car may or may not be essential for your life in the US, but a credit score is non-negotiable. That’s where Upwardli can help! Upwardli was created to help those newly arrived build their credit history and credit score and access the financial services they need.
Liam Noonan is a freelance writer passionate about all things finance and technology. Working on the content team for one of the three main credit bureaus after graduating from college, he gained firsthand knowledge of the various intricacies that make up the U.S. financial system. There he learned how much simple financial access and education can shape your future and relationship with money. He considers himself lucky for the personal finance information he received growing up and wants to help everyone have the same access he had.
As someone deeply entrenched in the realms of finance and technology, particularly within the U.S. financial system, I bring a wealth of firsthand knowledge and experience to the table. Graduating from college, I found myself on the content team for one of the major credit bureaus, delving into the intricate details that underpin the U.S. financial landscape. This experience granted me a profound understanding of the nuances that shape financial systems, and I've since been passionate about disseminating this knowledge to empower individuals in making informed financial decisions.
Now, let's dissect the key concepts addressed in the article:
Leasing a Car as a Non-U.S. Citizen:
-
Residency Requirement: To lease a car as a non-U.S. citizen, you must provide a valid permanent or semi-permanent residency address in the U.S., which can include an F1 student visa, work visa, or green card.
-
Considerations for Leasing: The decision to lease depends on personal circ*mstances. If you only need a car short-term, leasing might be more cost-effective. However, long-term leasing typically incurs higher costs than outright purchasing.
Questions to Ask Before Leasing:
- New or used car preference?
- Average annual mileage plans?
- Ability to maintain the car to avoid extra charges?
- Awareness of lease specials?
- Understanding of vehicle residual value, taxes, and fees?
Requirements for Leasing as a Non-Citizen:
-
Credit Score and History: A good credit score is usually required, but as a non-U.S. citizen, you may secure a lease without an established U.S. credit score or history.
-
Payment Ability: Proven ability to make payments.
-
Driver’s License: A valid U.S. driver’s license, obtainable on a long-term stay basis.
-
Insurance: Minimum auto insurance standards are mandatory for leased cars, and gap insurance is recommended.
Auto Loan for Non-U.S. Citizens:
-
Credit Challenges: Securing an auto loan as a non-U.S. citizen can be challenging due to the reliance on U.S. credit history, which newcomers may not possess.
-
Downpayment: Expect a downpayment of around 20% for new cars and 10% for used cars when opting for an auto loan.
-
Alternative Providers: Look for personal loan providers catering to undocumented immigrants. Necessary documentation includes visa, passport, employer letter, proof of income, legal presence, residence proof, and a valid U.S. driver’s license.
Special Programs for International Students:
- International students may access specific auto loan programs designed for foreign nationals.
Upwardli for Credit Building:
- Upwardli is highlighted as a tool to help newcomers build credit history and scores, facilitating access to essential financial services.
In conclusion, navigating the complexities of leasing and purchasing a car as a non-U.S. citizen involves understanding residency requirements, financial considerations, and alternative options like specialized loan programs. This comprehensive overview equips individuals with the knowledge needed to make informed decisions in the intricate landscape of U.S. automotive financing.
