Buying a car is an important step, and one that requires much consideration. There are many aspects you’ll want to consider before purchasing a new or used vehicle, but a major piece of the car buying puzzle is deciding whether to pay cash upfront, or to finance your new ride.

So, how do you choose?

 should you finance a car or buy cash

Well, there’s no one right answer for everyone. But if you are a foreign national in the United States and need a car, there are a few factors that you should consider before making a decision. Learn more about your options in this Car Payment Guide for Internationals article.

What’s the difference between paying cash and financing?

You have two options when you purchase a car through a dealer.

  • Option 1: Pay cash, and leave the dealership with full ownership of your car. You have paid the price tag (or negotiated) amount in full. This means if you had $30,000 in your bank account and purchased a $25,000 vehicle, you now have $5,000 left in the bank, and a new car in your parking spot.
  • Option 2: Finance. When you finance your new or used vehicle, you only pay cash for the down payment, a percentage of the total cost of the car. The remainder of the cost is broken down into monthly payments, with added interest. You have an auto loan.

Now, you may be thinking that by choosing to finance your car your total cost goes up due to the added interest of the course of your loan. If you have the money in the bank to cover the price tag, what’s the point of adding interest into the mix? Shouldn’t you try to save as much money as possible, to get the best deal?

Not always.

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If you’ve already read our guide to buying a car, then you know that getting covered by car insurance is an important step in the car ownership process in the United States. Not only is insurance important to protect you in case of an accident, but it is also required by law.

car insurance for international students

A quick search of “car insurance” yields endless results; there are differences in what coverage is required even between states here, and the number of options are endless. We know that the process of getting insured from start to finish can seem overwhelming to anyone, especially foreign nationals just getting the hang of things the American way, so we put together the International Student Guide to Car Insurance. We will discuss:

  1. Deciding what coverage you need
  2. What paperwork you need to gather
  3. How the quoting process works
  4. How to get the best price
  5. Deciding which insurance company is right for you
  6. What to do once you are insured

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