Part 1 – Buying

When you need to get a new car, you will be offered a choice of two different ways to put yourself behind the wheel: buying the car or leasing it. There are positives and negatives associated with each of these options, and the choice you make depends on many different factors. There are also certain business and tax-related aspects to consider when buying or leasing a car.

 

In Part 1 of our story, we will dig into the car buying process – what’s good about it, what’s not so good about it, and whether it makes sense for you, given the specifics of your situation.

Let’s define what buying a car means

Buying a car involves paying a negotiated price for that vehicle and receiving ownership of it in return. The actual elements of that payment can include one or more of the following:

  1. Cash
  2. Financing
  3. Trade-in value of a car you already own

Some people are able to pay cash for the total price of their new car, but most will need to finance the majority of the purchase by getting a car loan. Financing allows you to spread out the monthly payments over several years, keeping each payment affordable. While you are making these payments, your financing source shares the ownership of the vehicle with you. Once you have made the final payment, you get total ownership of the vehicle.

What’s good about buying a car

There are many positive aspects related to owning a car. Let’s go down the list:

It’s all yours

When you buy a car, you own it. Many people like that feeling. You also get the potential benefit of a period of payment-free ownership, once that you have paid off the loan. That’s an even better feeling!

You have no mileage limits

If you need to drive a large number of miles regularly, then you may be better off buying your car. Unlike with leasing, buying never comes with any mileage limitations. Drive as much as you need to – it’s not a problem!

It will have a trade-in value

When the time comes for you to buy your next new car, you can use your present car’s remaining value to reduce the purchase price. Whether you trade it in to the new car dealer or sell it separately, you will get some cash value back.

You can personalize your car if you choose to

If you are the type of person who likes to make their car unique, you have free rein when you buy! You can add aftermarket wheels and tires, a body kit, performance upgrades, or a custom paint job. It’s all OK!

You can sell your car at any time

If circumstances arise that require you to sell your car, you are free to do so. A lifestyle change may require a different type of vehicle, you may be moving to a city where car ownership is too expensive or impractical, or some other factor may dictate the sale of your vehicle. Unlike a lease term which you are locked into, you can sell your car whenever it becomes necessary.

Financing allows for more flexibility if your credit score is not the greatest

Leasing companies prefer customers with top-tier credit scores, while financing is usually more widely available to those who have average credit ratings. If you fall into this category, you may find that you are more likely to be approved for a loan than a lease.

What’s not so good about buying a car

There are some downsides to buying a car. Here they are:

Your payments and your down payment will usually be higher

When you are buying, you are purchasing the entire vehicle (leasing charges you only for the part of the vehicle that you use during the lease term). You will also pay much more interest and sales tax, for the same reason. As a result, buying costs more than leasing.

After the warranty ends, you will be paying for repairs

Most vehicle loan terms are longer than the length of the average warranty. This can expose you to the high costs of major repairs that become necessary after the vehicle’s warranty has expired – but before the loan is paid off! This can make a big dent in your wallet!

If you trade your car in before it’s paid off, you could end up “underwater”

Due to smaller down payments and steadily increasing vehicle prices, vehicle loan terms today are getting longer and longer. The average new vehicle loan term has grown to nearly 72 months. This means that the value of your rapidly depreciating vehicle is worth less than the loan balance, right up until the loan is nearly paid off.

 

If you trade in your vehicle, midway through your loan term, to get a new vehicle every few years, this “negative value” could total several thousand dollars each time you do it. You now have to add all those thousands of dollars to the loan you on your next new vehicle, just to bail yourself out of the previous loan. This is what “being underwater” means. It increases the amount you are borrowing to get into the new vehicle and will also increase the payment and/or the term of your new loan. You are digging a very deep hole of debt that you may never get out of, especially if you repeat the process every few years. This is extremely bad for your financial health and is definitely something to avoid.

You have no way of knowing your car’s value at any point

There are many factors that affect a car’s value. Some things, like market conditions, the state of the economy, and your brand’s reputation for reliability (positive or negative), are beyond your control. But other things, like your car’s mileage, mechanical condition, and cosmetic appearance, are a result of your ownership style. Your car’s value at any point in time is an unknowable blend of all these elements. Bottom line: you can’t know what it will be worth until that moment comes.

Some handy tips when buying a car

Here are some ways to make the car-buying process easier and hassle-free:

Get pre-approved for your car loan before you visit the dealer: Dealers make additional profit by marking up the interest rates on the loans they provide to car buyers. You could pay thousands extra in interest when you finance through the dealer. Be smart and get pre-approved for financing through Lendbuzz first, then shop with confidence at any dealer you choose!

Check for manufacturer’s incentives available for the cars on your list: Visit the appropriate manufacturers’ websites and check under “Offers.”  There you will find all of the current incentives available for each model in the manufacturer’s lineup. If there is a cash back offer, you can use it to reduce the cost of the vehicle, or possibly as a down payment. Be aware of any restrictions and expiration dates.

Test drive each vehicle to be sure it works for you: You will be owning the vehicle you choose for several years, so be sure to take each of your potential candidates on a thorough test drive. Different makes and models will drive very differently, so it is important to find the ones that feel right to you. Try to find an area with a variety of road surfaces and driving conditions where you can take and compare every car you test-drive. Drive each vehicle on both streets and highways, and make sure it checks all of these boxes:

  • It is comfortable and fits you
  • It has enough space for the people and stuff you will be carrying
  • You can see out of it clearly in all directions
  • You can understand and operate all of the controls and features
  • It has adequate power for keeping up with traffic and merging onto a highway
  • It changes lanes responsively
  • It brakes quickly and smoothly
  • It corners and turns in a controlled manner, without excessive leaning
  • It rides comfortably and handles bumps well, with no excessive pitching and jouncing
  • The transmission shifts smoothly
  • The climate control system is easily adjustable to your preferred temperature
  • You can operate the infotainment system without undue distraction
  • It comes with a good warranty (the longer, the better)

Test drive dealers as well as cars: If you like a car after driving it, check out the dealership before you buy. And unless you live in a sparsely-settled area, you can usually also find at least one additional dealer of the same new-car brand nearby. Shop all of these dealers not just for price, but also for service.

 

How good is their service department? How are their Yelp reviews? Are they conveniently located? Will any of them give you a loaner car or other transportation when you need service? Do they have a comfortable facility with refreshments, entertainment, and internet service if you will be waiting? Weigh these factors when you decide where to buy your new car – you will be seeing them periodically for many years!

Business and tax considerations of buying a car

Generally speaking, if you buy a car and use it for business, you can deduct the business-related expenses on either a per-mile basis or an expense basis. Parking fees and tolls may also be deductible, along with the interest on your car loan. If you use the vehicle exclusively for business, you may be able to deduct all of these expenses. But if you use the car partly for business and partly for pleasure, you can deduct only the proportion of the vehicle’s use that was for business purposes. There may also be other tax considerations when you sell a purchased business vehicle. Consult your tax advisor for specific guidance for your individual situation.

Auto loan terms are getting longer, the current average is over five years. Some people are opting for long terms loans: 84 months – or 7 years. But there are risks to this.

If you have been shopping for a car, you may have noticed that the costs of new vehicles are going way up. According to the analysts at Kelley Blue Book, the estimated average transaction price for new passenger vehicles in the US in October 2019 was $37,590. 

These higher costs are due to many factors:

  • New safety regulations 
  • Steadily increasing fuel economy standards 
  • The addition of high-tech driver assistance technologies to today’s new cars
  • Increased consumer interest in buying more expensive SUVs 
  • The desire of car buyers to have lots of optional extras in their cars

Here’s an easy but costly solution to high costs: longer loan terms!

As vehicle costs go higher, the cost of financing your purchase increases. This applies to both the principal and the interest. As a way to keep your monthly payments affordable, loan terms on vehicles have been stretching out longer than the traditional five-year term. There are now car loans that can go as long as six years, seven years, sometimes even eight years! The average down payment has also gotten smaller, in an attempt to keep the whole transaction affordable to the customer. Even though the interest rates are higher on longer-term loans, the payments seem to fit your budget. This sounds like a great idea that makes perfect sense, doesn’t it? 

You put the deal together in the showroom and drive off in your shiny new vehicle. You firmly believe that this is an excellent way to buy a vehicle. You will have six to eight wonderful years of ownership, and after it’s paid off you’ll figure out the next step. What could possibly go wrong? 

Just about everything!

The typical long-term car loan would not be such a large problem – if people actually kept their cars until the last payment was made. Unfortunately, many owners don’t do this, for a wide variety of different reasons, including:

  • Their needs have changed and they need another type of vehicle.
  • They don’t like or are bored with or the vehicle, and want something different
  • Their vehicle is out of warranty and is getting expensive to repair, so they want something new with a new car warranty.

So off you go, shopping for a new car, with maybe half of the loan paid on the old one. You are about to be in for a big shock!

The brutal reality of depreciation 

Vehicle depreciation is a terrible thing during the first few years of a long-term loan. It causes the value of your vehicle to drop very quickly once you drive it off the lot, and it continues to work against you during those early years of ownership. Back when most loan terms were shorter, this wasn’t so bad – you were making larger payments relative to the car’s value, so you could better keep up with the rate of depreciation. But with a long-term loan, the car is depreciating much faster than you are paying off the loan. As a result, you owe much more on your loan than the vehicle is worth on a trade. That’s not good for you!

Now you are underwater

Your situation at this point is called negative equity, which is also known as being “underwater.” Negative equity is a deep, dark hole of extra debt. If you buy a new vehicle now, you will have to deal with that added debt, as you make the deal on your new car. Your negative equity could be as much as several thousand dollars – and you will need to cover it before you can drive off in your new car. This is comparable to a gambling debt that you must pay off before you can continue playing the game.

What usually happens in this situation? Without enough cash on hand to pay off the negative equity on the old loan, the dealer will be only too happy to “roll” the amount you are “underwater” into the loan on your new car. You end up in even more debt for a longer term, and the sad cycle starts all over. 

You can drown financially from being underwater like this

Now you have a serious problem. No matter how long you own the new car, it will never be worth anything near the amount owed on the loan. Your hole of negative equity is now much deeper. It may even be too deep to climb out of. If you try to do this again, with another car and another loan, it may not work. You may find that either you can’t afford the monthly payments, or you can’t get approved for what is now a huge loan – without providing a large down payment that you don’t have. You have reached the end of the line.

How to avoid the dangers of long-term car loans

If you value your financial health, and you want to keep it in good standing for many years to come, here are some strategies for avoiding the dark side of long-term automotive debt:

Buy a less expensive car: If you can’t work a deal that keeps your loan term at five years or less, consider going down a size class. Instead of a mid-size car, get a compact. You will save thousands of dollars, and still get a well-equipped vehicle. Another option is to get a lower trim level with less standard equipment. If you can live without leather seats and a sunroof, you will end up with much less debt.

Make a larger down payment: If you can save up some money and put a few thousand dollars down, you can probably afford the payments on a shorter-term car loan. This will also help to keep you out of the negative equity zone, since you are financing a smaller percentage of the new car’s value.

Seek out manufacturers’ deals: Certain models receive incentives from their manufacturers at various times. Check the vehicle manufacturers’ websites under “Special Offers.” A cash back rebate offer can be used as a down payment on one of these vehicles, reducing both the loan payments and the risk of negative equity.

Buy a Certified Pre-Owned (CPO) vehicle: Most new car dealers offer these lightly-used vehicles, which have been thoroughly inspected and come with generous warranties that are backed by the manufacturer. CPO vehicles cost significantly less than new vehicles. Even better, you avoid the first few years of massive new car depreciation. 

Refinance your underwater loan: If you need a new car, and your previous loan from another lender is threatening to drown you in negative equity, contact us at Lendbuzz. We will do our best to refinance your old loan and keep you in better financial health, with an APR* and a term that you can live with and afford.

*APR = Annual Percentage Rate.

There is a great deal of buzz around electric vehicles (EVs). They are being promoted as the wave of the future – a more efficient, lower-cost, and cleaner way to drive. EVs are predicted to greatly increase their numbers among the automotive population, eventually replacing all vehicles powered by internal combustion engines.

There are some EVs that you may have already seen on the roads, like the Nissan Leaf and the Teslas. While electric vehicles are becoming more visible on the roads (especially in EV-friendly states like California), they are still a tiny part of total car sales – only 2% of all cars sold in 2018 were electric vehicles.

Does it make sense for you to consider an electric vehicle for your next car? Is it more or less expensive than a traditional gas-fueled car? What would it be like to live with an EV?

Here are the pros and cons of owning an electric vehicle at the current moment.

What is an EV?

An electric vehicle, for the purposes of this discussion, is one that derives all of its power from an internal battery that drives an electric motor. When the battery gets low, it must be recharged by being connected to an external power source.

Do not confuse an EV with a plug-in hybrid, which can go limited distances on a smaller battery, and then switch over to a conventional gasoline engine to keep going. Plug-in hybrid vehicles are called “electrified” vehicles, but they do not run solely on battery power.

What are the pros of driving and owning an EV?

There are many benefits that can be yours when you drive an electric vehicle. These are the things that you will hear EV owners telling anyone who will listen:

Never having to go to a gas station again

Homeowners who have chargers at their residences can plug in and charge their EVs every night, and then leave with a “full tank” in the morning! For most people’s daily local needs, an EV will get them where they need to go, and back home with plenty of charge left. Not having to stop for gas can save drivers a lot of time and hassle.

Benefits to the environment

Because EVs do not directly burn fossil fuels and have no tailpipe emissions (because they have no tailpipes!), air quality will improve as more electric vehicles take to the roads. The cleaner that your sources of electricity are (wind and solar are cleanest, followed by nuclear, natural gas, oil, and coal) the better the results are for the planet overall.

You save money

In most places in the US, a “full tank” of electricity currently costs much less than a tank of gas, on a per mile basis. This can add up to large savings on “fuel” costs over the life of your EV.

Minimal maintenance requirements

AN EV is a much simpler device than a gasoline-powered vehicle. It has no oil, no radiator, no spark plugs, no exhaust system, and usually no transmission. That means that your overall maintenance costs go way down, compared to a conventional vehicle.

EVs are fun to drive

Because electric motors provide maximum torque (twisting power at the wheels) from a standstill, EVs have truly impressive acceleration. This responsiveness makes driving fun, and lets you more easily fit into gaps in traffic when you need to merge or change lanes. And because the heavy battery is mounted low in the car, a typical EV also has excellent handling and cornering capabilities.

EVs are quieter

EVs eliminate all of the noise and vibration of an internal combustion engine, from the intake air rushing in, to the ignition of the fuel-air mixture in the cylinders, to the exhaust coming out the tailpipe. When all of these sounds are absent, you get a much quieter driving experience.

You get tax incentives

Depending on which EV you buy, and which state you live in, you may be eligible for both federal and state incentives for the purchase of an electric vehicle. These incentives can lower the effective purchase price of your EV.

What are the cons of driving and owning an EV?

Unfortunately, owning and driving an EV at this point in time is not all butterflies and rainbows. There are some hard realities facing you as an EV owner, so let’s go through the list:

EVs are expensive

Batteries are very expensive, and they make EVs expensive. An EV costs at least $10,000 more than an equivalent gasoline-powered vehicle. Then you have to add the cost of installing a home charger on top of the purchase price. This can make an EV too expensive for the average new car buyer.

Range anxiety is real

When you run low on gas, you don’t worry. You know that there will be a gas station nearby, wherever you are. But things are quite different for most drivers of EVs. Unless you own a Tesla (which has its own dedicated charging network), electric vehicle charging stations are relatively few in number, and they can be much harder to find.

There are many different charging networks, and each one usually requires you to sign up in advance. Most do not allow you to simply drive up and swipe your credit card to charge your EV. Planning a long road trip in an electric vehicle requires you to know in advance where you can charge along your route, and what network each of the chargers belongs to. Running out of charge in the middle of your trip will definitely ruin your day!

Charging times are long

Drivers of gasoline-powered cars are used to short refueling times. EV drivers are not so fortunate. Even the fastest currently available public chargers take around a half-hour to provide enough charge for an hour or so of driving. While it may not be a problem to leave your car plugged in overnight at home, this becomes a big issue when travelling long distances. Depending on the location of the charging station, you will definitely have time to visit a restaurant, or do some shopping. You may have to wait even longer if another EV is using the charger ahead of you!

A large number of EVs may overload the power grid

Drivers will charge their EVs when they need to charge them. When the numbers of electric vehicles on the road increases significantly, all of that charging activity will overtax our current marginal electric grid. Even if most EVs charge overnight at off-peak times, this will still eventually happen. This situation will be even more acute in large cities that have to deal with brownouts when electricity use peaks. More powerplants will need to be built.

No electricity, no driving

The recent wildfire-related power outages that have been imposed throughout California highlight the vulnerability of the EV fleet. When there’s no power to charge your electric vehicle, what do you do? This is a big problem.

Electricity costs will rise, eroding the cost savings

In many places, electricity prices increase when you use more power. Charging your EV every night will increase your household’s power consumption, and this may move you into a higher price bracket per kilowatt-hour. Many electric utilities are building their own EV charging networks, which sounds good – until you realize that the costs of building them will be passed on to all of the utility’s customers, who may or may not own EVs. Everyone’s electricity costs will rise, possibly to the point where charging an EV costs more than putting gas in a conventional car.

EV subsidies benefit high-income people

Most EVs are purchased by households with incomes of over $100,000. This means that most of the EV subsidies are going to wealthier people, who don’t really need financial help to buy an electric vehicle.

Apartment and city dwellers can’t charge at home

Where do you charge your EV if you don’t own a home? Most apartment dwellers and condo owners are unable to install a home charger. And what if you live in a big city? All of these people will have to hunt for public charging stations to charge their electric vehicles.

EVs will be taxed to make up for lost fuel taxes

Taxes on gasoline and diesel fuel are what funds the upkeep of our roads and highways. If and when EVs replace petroleum-fueled vehicles and become a larger part of the vehicle fleet, these road funds will be reduced. The federal government and the states will need to find a way to make up the difference, and they will charge electric vehicles for their wear and tear on the road system. This has already started in some states, and it will likely take the form of a per-mile tax on EVs across the country.

Batteries are very expensive to replace

No one really knows how long an EV’s battery pack will last, but it will be very expensive to replace when it happens! This is one of the great unknowns of owning an electric vehicle, and accounts for why EVs depreciate much faster than gas-powered cars.

EV materials come from some bad places

The dark side of the EV story can be found in the underdeveloped countries where some of the key raw materials for electric vehicles are sourced. Let’s take cobalt, for example. Cobalt is a key material for EV batteries. Unfortunately, most of the world’s cobalt comes from the Democratic Republic of Congo, where much of it is mined by children, in appalling conditions, and with no protective gear. Health problems and environmental degradation in Africa and other places around the world are a legacy of the march to popularize EVs.

Is an electric vehicle right for you?

The truth is, electric vehicles are a luxury. You need a lot of resources to start with to be able keep on. If you can afford one, if you can install a charger at home, if you can avoid relying on public charging networks, if you can benefit from the tax incentives, and if you can live with the ethical dilemmas, then there’s no reason not to try the EV experience. But if you can’t check all of those boxes, you will be much better off with a conventional, gasoline-powered vehicle, whether it is new or used.

This is the final installment of our ‘Unique Rules of the Road’ Series. Welcome to Massachusetts, where you may not transport wildlife loose in your car. Check out our other installments for ‘Unique Rules of the Road: New York’, and ‘Unique Rules of the Road: California’.

The state of Massachusetts has a lot of these unique rules of the road. Massachusetts is a small state, ranking 45th in land area, but it boasts the 15th largest population. It also has the 21st largest vehicle fleet in the country, with over five million motor vehicles registered to operate on its roads in 2017, the most recent year for which this information is available. 

Massachusetts is the third most densely populated state, with 80% of its people living in the Boston metropolitan area. This makes driving in the Boston area a challenge, while the rest of the state is mostly idyllic countryside. Let’s take a look at some of the unique rules of the road in Massachusetts, the Bay/Pilgrim/Puritan/Old Colony/Baked Bean State (take your pick!).

Driving in Massachusetts, remember:

Cell phone usage in the car: Drivers who are over 18 can use cell phones for calls, if they always keep one hand on the steering wheel. Drivers may not write, send, or read text-based messages (including email and internet access). For all drivers under 18, cell phone use is prohibited, except for reporting an emergency. A driver who crashes because he or she was using a mobile electronic device will face criminal charges and loss of their license.

Seatbelt use: It is illegal to drive without using a seatbelt yourself, or without all occupants being belted in or in a proper child seat/restraint device. A police officer cannot pull you over and issue a ticket if you or a passenger is not wearing a seatbelt, unless you are stopped for a traffic violation. Drivers of taxis, livery vehicles, police and fire vehicles, postal delivery vehicles, and buses are exempt. Passengers in emergency vehicles are also exempt.

Passing on the right: The law requires drivers to keep right unless turning or passing. Passing other drivers going in the same direction should be done only on the left. Passing on the right is allowed if you are on a physically divided highway (with a median barrier), and you have at least two lanes on your side of the road.

Helmets for motorcycle riders: Drivers and passengers on motorcycles must wear “protective head gear” conforming with state standards, according to the law.

Motorcycle lane-splitting: Lane-splitting is not allowed, but two motorcycles may legally ride side-by-side in the same lane.

Use of headlights: Your headlights and taillights should be turned on 30 minutes after sunset, and also used until 30 minutes prior to the sunrise, as well as any time that visibility is less than 500 feet. If you are using your wipers because of the weather, your low beams should also be on.

Making turns on red: You may turn right at a red light after stopping and yielding to pedestrians, unless it is prohibited. Left turns on red can be made only from a one-way street and onto a one-way street, if not prohibited. Fun fact: Massachusetts was the last state in the US to allow right turns on red (in 1980), and still prohibits the practice at a great many intersections. Watch out for “No Right Turn On Red Light” signs!

U-turns: U-turns are generally allowed in a variety of situations, when safe to do and unless prohibited by a posted sign. You may not make a U-turn:

  • Where there is a curve or hill within 500 feet
  • Where there is heavy traffic

Minimum following distance: There must be at least two seconds of space between you and the car ahead, whatever legal speed you are going.

Pedestrians: If a driver is approaching a crosswalk, pedestrians have the right of way if they are in the path of a driver, or if they are within 10 feet of the halfway point in the road. Drivers may not pass a vehicle that has yielded the right of way to a pedestrian, nor should they block a crosswalk. If a pedestrian is injured by a driver in a marked crosswalk, an investigation will be conducted, and if deemed appropriate, civil or criminal violations will result in a citation, or even a criminal complaint.

Driving under the influence of alcohol: Don’t do it! Massachusetts has very severe penalties, and they are enforced! The blood alcohol limit is 0.08%, but you can be charged at a lower level, if your actions show that you were affected by the alcohol you ingested. 

Smoking marijuana: While marijuana is legal within the state, it is illegal for anyone to operate a vehicle under the influence of marijuana.

Bicycles: Drivers must stay at least three feet away from bicycle traffic. Drivers must yield to an oncoming bicycle turning left. At intersections, drivers must stop at the stop line to allow pedestrians and bicyclists to cross safely. When turning right, drivers must yield to pedestrians and bicylists who are crossing. When a bicycle box (which allows bicyclists to safely turn when approaching a red light intersection) is marked on the pavement, drivers must stop behind the bicycle box (even when it’s empty) and wait for a green light.

Leaving children alone in the car: While Massachusetts does not have a law specifically prohibiting leaving children alone in your car, authorities may criminally charge caregivers under existing the state’s existing endangerment laws. 

Speed limits: There are some general rules for speed limits in the state of Massachusetts. These will apply, unless posted signage indicates a different limit:

School zone 20 mph

Inside thickly settled or business districts 30 mph

Maximum residential limit 30 mph

Undivided highways outside thickly settled or business districts 40 mph

Highways outside thickly settled or business districts 50 mph

Two-lane roads 55 mph

Highways, freeways, and interstates 65 mph

Some crazy Massachusetts driving regulations

Let’s wrap up with some wacky rules that the state and specific Massachusetts localities have put on the books. Some might be based in past experience and may be practical, but others just leave you scratching your head:

State of Massachusetts: You may not transport a wild animal in the back of your vehicle, unless it is properly restrained.

Milford: Looking inside a vehicle to invade the privacy of the occupants is forbidden.

State of Massachusetts: Televisions in cars must be positioned so that the driver cannot see them.

State of Massachusetts: Drivers must use their headlights when they are inside a tunnel.

State of Massachusetts: Children under age 12 may not ride in the bed of a pickup truck.

Drive safely in Massachusetts!

Next in our Unique Rules of the Road series: New York! Remember, while most driving regulations are consistent from state to state, there ARE differences. Read on to learn more about driving in the Empire State.

The state of New York has quite a few of these unique rules of the road. New York ranks 30th among the 50 states in land area (47,224 square miles), but it has the fourth largest population (around 20 million people). It also boasts a vehicle fleet of more than 10 million motor vehicles, all registered to operate on its roads in 2017, the most recent year for which this information is available.

New York is home to two completely different driving environments. There is the densely-populated New York City metropolitan area, which is extremely congested, with terrible traffic and millions of people crammed tightly together. Then there is sparsely-populated upstate New York, with lots of forests and farmland, plenty of room on its roads, and a few medium-sized cities that are spread across the countryside.

Let’s take a look the unique rules of the road in New York, the Empire State:

Cell phone usage in the car: New York has made it illegal to use a cell phone inside the car without a hands-free device, unless you are activating, beginning, or ending a call. It is also illegal to send or receive text messages or e-mails while driving. Calls made for emergency situations are exempted.

Seatbelt use: It is illegal to drive without using a seatbelt yourself, or without all occupants being belted in or in a proper child seat/restraint device. A police officer can pull you over and issue a ticket if you or a passenger is not wearing a seatbelt. Taxis, livery vehicles, emergency vehicles, and non-school buses are exempt.

Passing on the right: This is legal, when it is safe, when the car ahead makes a left turn, when there is a lane or enough road width where you can do so and see clearly, when upcoming intersections are clear, and when it is not prohibited.

Helmets for motorcycle riders: Motorcyclists must wear approved helmets, as well as goggles or a face shield for eye protection.

Use of headlights: Your headlights should be turned on 30 minutes after sunset, and also used until 30 minutes prior to the sunrise. If you are using your wipers because of the weather, your low beams should also be on. You are required to use your headlights if it’s foggy, to help other cars see you. Daytime running lights do not qualify as headlights in New York.

Making turns on red: You may turn right at a red light after stopping and checking for other vehicles and pedestrians, unless it is prohibited. It is prohibited in cities with a population of over one million unless a sign permits it (this includes New York City).

Left turns on a red light can be made only from a one-way street and onto a one-way street, after a full stop has been made, and right-of-way has been yielded to oncoming traffic and pedestrians.

U-turns: U-turns can only be made from the left part of the lane that is closest to the centerline of the road, if you have a green left-turn arrow, yield to other traffic, and a U-turn is not prohibited by signage. U-turns are never allowed in these situations:

  • Near a hilltop, a curve or anywhere other drivers can’t see your vehicle from 500 feet away in both directions
  • In New York City business districts
  • On a limited access expressway
  • In a school zone
  • Where prohibited by signage

Pedestrians: Pedestrians (and skateboarders) who are legally crossing the road or street at marked or unmarked crossings, like intersections, always have the right-of-way.  You must slow down or stop and let them cross.

Driving under the influence of alcohol: It’s not worth it! New York has very severe penalties, and they are enforced! A blood alcohol content (BAC) of 0.05% is legal evidence that you are impaired, a BAC of 0.08% or more is evidence of intoxication, and a BAC of 0.18 percent or higher is evidence of aggravated driving while intoxicated. Any driver under 21 found with any measurable BAC will face a license suspension and civil fines.

Smoking marijuana: In New York State, you can be arrested for driving while ability impaired by a drug, as well as driving under the combined influence of alcohol and drugs. Don’t do it!

Bicycles: The rules of the road apply to bicyclists. You must yield the right-of-way to them just as you would to another vehicle. Bicyclists must also obey the rules of the road just as motor vehicle drivers are required to.

Smoking in a car: In Rockland, Schenectady, and Erie Counties, if any children are with you (aged less than 18), it is illegal to smoke inside the car.

Minimum following distance: There must be at least two seconds of space between you and the car ahead, whatever legal speed you are going.

Speed limits: There are some general rules for speed limits in the state of New York. These will apply, unless posted signage indicates a different limit:

School zone                                                                            20 to 30 mph, as posted

State speed limit                                                                    55 mph unless otherwise posted

Controlled access highways                                                 65 mph where permitted

Trucks on I-95                                                                       50 mph

New York City                                                                        25 mph unless otherwise posted

Some crazy New York driving regulations

Let’s wrap up with some wacky rules that the state and specific New York localities have put on the books. Some might be based in past experience and may be practical, but others just leave you scratching your head:

State of New York: You may not ride a horse on a road at night.

Sag Harbor: It is illegal to get undressed in your car.

State of New York: You may not sell ice cream from a moving ice cream truck.

State of New York: You are not allowed to warm up your car unless you are in it.

Drive safely in New York!

If you’re thinking about buying a new car, download our Car Buyers Checklist to help guide your process:

We’ve got a special series for the end of summer: Rules of the Road. If you’ve recently relocated, this one is for you. We’re profiling special rules – driving laws – by state. First up: California!

Most rules and regulations that apply to driving in the United States are consistent from state to state. But not always. Many states have their own unique driving-related laws, which usually come with penalties if you are caught violating them.

The state of California has a lot of these unique rules of the road. California has the third largest land area and the largest population of any state in the USA. It also boasts the largest vehicle fleet in the country. How large? There were more than 30 million motor vehicles registered to operate on its roads in 2017, the most recent year for which this information is available.

California is a culture of, by, and for the automobile. It is the birthplace of limitless freeways, photochemical smog, and the resulting emissions controls that have become a part of every vehicle since. Let’s take a look at some of the unique rules of the road in California, the Golden State:

Regular Rules of the Road – California

Cell phone usage in the car: California has made it illegal to use a cell phone inside the car without a hands-free device. You may not write, send, or read text-based messages. You may only use one ear bud, not both, so that you can hear sounds from outside the vehicle. If the driver is under 18, cell phone use is prohibited, except in an emergency. These laws apply even if you are stopped at a red light or a stop sign.

Seatbelt use: It is illegal to drive without using a seatbelt yourself, or without all occupants being belted in or in a proper child seat/restraint device.

Passing on the right: This is legal, when it is safe and there is a lane where you can do so. Passing on the right should only be done on multi-lane highways.

Helmets for motorcycle riders: Drivers and passengers on motorcycles must wear helmets.

Motorcycle lane-splitting: Motorcycles are legally allowed to drive in between lanes of traffic, if done safely.

Use of headlights: Your headlights should be turned on 30 minutes after sunset, and also used until 30 minutes prior to the sunrise. If you are using your wipers because of the weather, your low beams should also be on.

Making turns on red: You may turn right at a red light after stopping, unless it is prohibited. Left turns on red can be made only from a one-way street and onto a one-way street.

U-turns: U-turns are generally allowed in a variety of situations, when safe to do and unless prohibited by a posted sign. You can make a U-turn:

  • At an intersection, when you have a green light or arrow
  • On an opening in a divided highway
  • Across a double yellow line
  • In a residential neighborhood, if you are protected by a traffic sign or light

Pedestrians: Pedestrians have the right of way at crosswalks and intersections that meet at right angles. If a pedestrian has stepped off the curb and into the intersection or crosswalk, you must stop and let them cross.

Driving under the influence of alcohol: Don’t do it! California has very severe penalties, and they are enforced! The blood alcohol limit is 0.08%, but you can be charged at a lower level, if your actions show that you were affected by the alcohol you ingested.

Smoking marijuana: While marijuana is legal within the state, it is illegal for anyone in a vehicle to smoke it while driving or being driven.

Bicycles: Drivers must stay at least three feet away from bicycle traffic. If there are bicycle lanes on the road, cars may not enter them, unless turning at an intersection or into a driveway.

Slow-moving vehicles: If you have five or more vehicles behind you on a two-lane road, you are required to pull over when it is safe, and then let them pass.

Smoking in a car: If any minors are with you (aged less than 21), it is illegal to smoke inside the car.

Minimum following distance: There must be at least three seconds of space between you and the car ahead, whatever legal speed you are going.

Leaving children alone in the car: You may not leave children under six years old in your car, unless you have someone else aged 12 years or older to supervise them. Additionally, you may not ever leave the car running when parked, without the driver being present.

Speed limits: There are some general rules for speed limits in the state of California. These will apply, unless posted signage indicates a different limit:

School zone                                                                            25 mph

Railroad crossings with less than 400 ft. visibility            15 mph

Vehicles towing trailers                                                        55 mph

Business and residential areas                                            25 mph

Two-lane undivided highways                                               55 mph

Highways, freeways, and interstates                                    65 to 70 mph

Crazy Rules of the Road – California

Let’s wrap up with some wacky rules that the state and specific California localities have put on the books. Some might be based in past experience and may be practical, but others just leave you scratching your head:

State of California: Women may not drive in a housecoat.

Arcadia: Peacocks have the right of way.

Glendale: It is illegal to jump out of your car at 65 mph.

Eureka: You may not use the road as a bed.

San Francisco: It is illegal to wipe cars off with used underwear.

State of California: It is illegal to shoot any wildlife from a moving vehicle, except for whales.

Drive safely in California!

If you’re a resident international in the United States and you’re thinking about buying a new car, check out our Car Buyers Checklist:

If you are planning to drive a car while you are living in the USA, you will need to have car insurance. If you are simply renting a car from an established car rental company, you can get insurance coverage as part of your rental contract. But if you are planning to buy a car in the USA, you will need to have your own insurance coverage for driving on American roads. Let’s go through the basics of why you need car insurance, what the various elements of a car insurance policy are, and how to get car insurance coverage.

Why do you need car insurance?

There are several good reasons why you need to have car insurance in the USA:

  • It is required by law
  • It proves that you are financially responsible in case of an accident
  • It covers most or all of the costs from accident-related vehicle damage, property damage, and injuries to you and others who may be involved

Most car insurance policies will charge you an annual premium for coverage, which is usually broken down into affordable monthly payments.

What are the various elements of a car insurance policy?

Within the average car insurance policy are several different types of insurance coverage. Some of them are required, and some are optional – check your state’s regulations as to exactly what you will need:

Generally required types of car insurance coverage

Liability: This will cover you in cases where an accident is determined to be your fault. It takes care of the other party’s medical expenses related to bodily injuries, as well as property damage caused by your accident. If you are sued as a result of the accident, your liability coverage will pay for your legal costs, as well as any financial settlement or judgment that the court hands down. If you have a large amount of assets to protect, you should get higher levels of this type of coverage.

Personal Injury: This takes care of your medical costs following an accident, no matter who caused the accident. Some, but not all, states require this. It is also a good idea to have this coverage if you do not have any other health insurance.

Uninsured or Underinsured Motorist: Even though it is illegal to drive without car insurance, some people still do it. This coverage will pay for your accident repairs and medical costs if the other driver in not insured and is at fault.

Generally non-required types of car insurance coverage

Collision: This pays for repairs to your car if you are in an accident, whether it is your fault or not. While collision coverage is not legally mandated, your auto lender will likely require you to have it. This is to protect the lender’s investment, during the term of your loan payments. While collision coverage is a very good idea for newer, higher-value vehicles, you may consider dropping it if your car is old and does not have much value left in it.

Comprehensive: This covers you for damage that is not accident-related, like extreme weather (hail and high winds), falling objects, flooding, fire, vandalism, and theft.

Nerdwallet has a good comprehensive overview of insurance requirements by state. Check it out to confirm that what you need before you being shopping.

How do you get car insurance?

Today, you have many choices when it’s time to get your car insurance policy:

Online insurance companies: You have probably seen their ads online, on TV, over the radio, and everywhere else. These are companies like Geico, eSurance, and Progressive. You can simply go to each company’s website and get a price on a policy.

Local insurance company agents: Every local community has lots of people who represent a specific insurance company, and sell that company’s products, including car insurance. You can find them using a search engine, and then call them for pricing on a car insurance policy.

Independent insurance agents: These are people who represent several different insurance companies, and can write you an auto insurance policy from the one that gives you the best deal. You can search them out online, then contact them by phone.

The ideal way to get the best car insurance value is to shop around and compare prices from as many sources as you can.

What documents do you need to get car insurance?

The requirements for getting car insurance, if you are from another country, will vary from state to state. Check your state’s Department of Motor Vehicles website for the specific requirements in your local area. These will spell out whether your home country’s driver’s license is enough, or whether you need to get an International Driving Permit or a state driver’s license. You will also need to have the registration documents for your vehicle, a local mailing address and phone number, and an email address.

Some insurance companies may require you to get a state driver’s license. They will also want to check your driving record in your home country. If this is not possible, your rates may be higher due to their not knowing your driving history.

Find your state’s DMV here: https://dmvnv.com/50_state_dmv_list.html

What about the new pay-per-mile car insurance?

You may have heard about a new, less-expensive type of car insurance. It charges you by the mile, using an electronic gadget that plugs into your car’s diagnostic port. It also monitors your driving behavior, every time you drive. Some people who do not drive their cars much have found this system to be of value, but others have reported that the initially low rates have been quickly raised over a short period of time for no good reason, and that the claim service is extremely poor. Be sure to read reviews of any service you’re considering buying. The seemingly low rates may not be worth it

A car is a major purchase, possibly the largest one you have ever made. As you approach this process, it is important to know what to do and how to do it. Being an informed consumer will help you to get the best possible car at the best possible price. Here is our checklist, intended to help car buyers who are new to the US. It will help to guide you through the process of getting a car that is right for you.

First: Are you buying a new or a used car?

This is usually the first decision you will need to make. The answer to this question depends on your income and your credit. If you have a higher income and good credit, you may be able to buy a new car. But if you are on a tight budget, or your credit is not ideal, a used car may be the right choice for you. Once you have made the new vs. used decision, the buying path splits. Let’s start with buying a new car.

Buying a new car: all new cars are alike

If you are shopping for a new car, keep in mind that new cars of a given make and model are all identical, no matter which new-car dealer you choose to shop at. They are fresh off the assembly line, and have had no previous owners. This means that you can focus on getting the best deal from the best dealer, and wherever that is, you will be getting the exact same car.

Here are some new-car buying tips that will guide you through the process:

  • Decide which type of car is right for you: Car, truck, or SUV? Small, medium or large? Mass market brand or luxury?
  • Do your research online: Read the reviews, comparison tests, and reliability ratings.
  • Pick a few finalists: Two or three choices are enough, and don’t get hooked on a specific vehicle yet.
  • Test drive your finalists at local dealers: Take a through test drive on all the types of roads you will normally drive on. The car should be comfortable, easy to operate, and have enough power and features for your needs. Do not discuss prices or purchasing at this point.
  • Decide which vehicle or two you prefer: Your test drive should help you narrow your selection down to one or two.
  • Configure your chosen vehicle(s) and find current incentives: Use the manufacturer’s website to choose the trim level and options you want. This will tell you the MSRP, or retail sticker price of the vehicle(s). The site will also give you information on current cash offers and other incentives.
  • Check the local market pricing: Car shopping sites like Kelley Blue Book, True Car, or Edmunds can tell you what other buyers have paid for the car(s) you are shopping for.
  • Locate the car you want: Check the manufacturer’s and local dealers’ websites for vehicles in their inventories that match what you want.
  • Check your credit, figure out the right payment, and get preapproved: Checking your credit score will give you a good idea of the interest rate you will get on your car loan. The better your credit, the lower your rate. Next, use a loan calculator to figure out the right loan term and payment for your budget. Then you can apply for a loan and get preapproved, before you enter the dealership. Even if you’re a new U.S. resident without credit, Lendbuzz can help you here – contact us!
  • Negotiate the price of the car at several dealerships: Using the local market prices you have found, visit a few dealers that sell the brand(s) you are shopping for. If you don’t want to take the time to do this, you can do it by email or through the dealer’s website. Tell them that you are shopping for the best price on the exact car that you want. Also ask them for the interest rate that they would offer you for financing your purchase, and compare it to the rate you have been preapproved for. Continue negotiating until the car prices and the interest rates don’t get any lower.
  • Take the best deal and close it: Select the best combination of car price and financing rate, visit the dealer, do the paperwork, and drive away. Remember to bring your driver’s license, proof of insurance, any funds needed for a down payment, and your preapproved loan information, if relevant.
  • Drive away happy!

Buying a used car: no two used cars are alike

Once you enter the world of used cars, you will quickly realize that each one is unique and different from all of the others. They have been driven varying numbers of miles, they have had one or several owners, and they may have led lives that were pampered or abused, as well as everything in between. The key to buying a good used car is to find the one that has been treated the best, driven the least, and fits within your budget.

Here are some used-car buying tips to help you navigate this unfamiliar landscape:

  • Decide on the type of car you need: Small, medium or large-sized? A car, an SUV, or a pickup truck? A luxury brand or something from the mass market?
  • Research thoroughly online: Check out reviews, driving impressions, and especially reliability ratings and maintenance/repair costs.
  • Narrow it down, but not too much: Remember, the condition, mileage, and previous care of a used car count for a lot. Keep your options open.
  • Check the market pricing: Car shopping sites like Kelley Blue Book, True Car, or Edmunds can tell you what other buyers have paid for the used car(s) you are looking at.
  • Look up your credit score, figure out the right payment, and get preapproved: Checking your credit score will give you a good idea of the interest rate you will get on your car loan. The better your credit, the lower your rate. Next, use a loan calculator to figure out the right loan term and payment for your budget. Then you can apply for a loan and get preapproved, before you enter the dealership. Lendbuzz can help you here – contact us!
  • Thoroughly inspect and test drive each prospective used car: Check the condition of the interior, exterior, the under-hood area, and the tires. Take an exhaustive test drive on lots of different types of roads, including rough and bumpy ones, as well as highways. The car should feel solid, accelerate smoothly, corner confidently, stop quickly, and not make any disturbing noises. It should also not have any bad smells, severe rust, or other obvious problems. All of the basic systems and electrical/electronic accessories should work properly.
  • When you have narrowed it down, have the car inspected by an independent mechanic: This will cost a few bucks (somewhere around $100), but it is an excellent investment. A thorough inspection by an independent third party will give you the real lowdown on whether this used car is worthy, or if it is about to become a money pit that you should steer clear of. If that’s the case, walk away and keep looking.
  • Negotiate the price of the used car: Use the local market used-car prices you have found, along with any problems that the car may have, to negotiate a better price with the seller. You may ask the seller to make any necessary repairs as part of the deal. Otherwise, deduct the cost of the repairs (your inspection mechanic should give you this information) from the negotiated price. If you are buying the used car from a dealer, ask about a warranty. Also ask them for the interest rate that they would offer you for financing your purchase. Compare this to the rate you have been preapproved for.
  • Close the deal: Using the lowest financing rate, do the paperwork. You will need to bring your proof of insurance, driver’s license, down payment, and preapproved loan documents.
  • Drive away happy!

The United States of America celebrates the Memorial Day holiday each year during the last Monday in the month of May. Memorial Day honors and remembers all who have died while serving in the armed forces of the United States. Over the years, Memorial Day weekend has also become a major retail sales event, with many businesses of all kinds holding special sales.

Auto dealerships typically have major sales leading up to and during Memorial Day, with large discounts and special offers. Even better for you, Memorial Day falls on the end of the month, when car dealers must make their sales quotas to qualify for month-end bonuses from the carmakers. So it’s a great time to buy a car!

As an international living in the US, you may not have celebrated Memorial Day before. You may not even be aware of the many car sales and discounts being offered across the country at this time. Another great thing about these Memorial Day promotions is that they usually run until the end of May. So you have time to apply and get approved for your car loan.

Lendbuzz has you covered! Here are 6 of the best Memorial Day car sale deals in the United States, from a variety of the major US markets:

Boston, Massachusetts

Up to $3,500 Cash Back on 2019 Kia Sportage

Los Angeles, California

2.9% APR on 2019 Honda Fit

Orlando, Florida

$2,500 Customer Cash on 2018 Mazda3 4-Door

Miami, Florida

$2,000 Cash Back on 2019 Nissan Altima

Newark, New Jersey

0% APR on 2019 Subaru Outback

Houston, Texas

Up to $4,750 Retail Bonus Cash OR 0% APR Plus $2,000 on 2018 Hyundai Sonata

There are some great deals out there! Get pre-approved now and grab one!

Now that you have seen some of the great discounts you can get on cars thanks to these Memorial Day sales, you can think about your financing options. Need some help deciding which car is best for you? Would you like to know the steps necessary for buying a car in the US? Check out our International’s Guide to Buying a Car.

As an international student or professional, you may think that purchasing a car in the United States will be difficult. It doesn’t have to be! Besides getting a great deal during Memorial Day Weekend car sales, you can get great rates on your car loan any time of the year. With Lendbuzz, you can apply for a car loan online and get pre-approved in minutes. We specialize in helping expats who are on visas, or may not have a Social Security Number.

Apply for your car loan at Lendbuzz and you’ll be closer to getting the car you need. No SSN, credit history or co-signer is needed.
Most of these offers are available until May 31st, 2019. Check with your local dealerships to confirm dates, limitations, and the accuracy of all the offers listed above. Happy car shopping!

is it possible can i buy car with international drivers license in the us united states

Is it possible to buy a car with an international driver’s license in the U.S.?

You may be an international student, expat or professional who has recently moved to the U.S. or is thinking about moving to the U.S. As such, you’re deciding on whether or not to buy a car to get to work or school. We have helped many foreigners buy a car in the United States. One of our most frequently asked questions is: Is it possible to buy a car with an international driver’s license in the U.S.? Can I register a car with an international driver’s license? We can answer that question for you!

 

Here’s the short answer: you don’t need a license to buy the car, but you need a license to drive it.

Can I buy a car with an international driver’s license?

Technically, you can get a car in the United States with an international driver’s license. Additionally, at this point and time, it is not legally required for dealerships to ask for your Social Security Number in order to sell you a car. Many of them choose to do it because they want to check your credit history. Or because they want to be selective about the people they sell cars to.

The most important thing is that your international driver’s license has to be valid, it cannot be expired. Lenders who specialize in providing car loans for internationals in the U.S., such as Lendbuzz, require a driver’s license for identity verification purposes. In order to secure your car loan, you are able to provide your international driver’s license. (Remember that it can’t be expired.)

What about registering the vehicle? Can I register the car with my international license?

Well, every state has different laws and legislation. So, it’s important for you to research the details regarding the state you will be moving to. However, there are definitely states where you can register a vehicle if you have an international driver’s license. In New Jersey, for example, you need to provide a form of identification to register a vehicle to your name. And that can be your passport.

Can I drive the car with an international driver’s license?

While the answer varies from state to state, you will normally need to obtain a state driver’s license if you want to drive legally as a resident. Additionally, some states require that expats possess both an International Driver’s Permit and a valid license from their home country. If you don’t have both, then you may need to apply for a US driver’s license.

Detailed information about driving as an international in the United States can be found on the US government’s website.

You can also read our previous post to learn how you can get a U.S. driver’s license as an international.

Finally, can I get car insurance with an international driver’s license?

Most car insurance providers require a U.S. driver’s license. So, you’ll definitely want to get a U.S. driver’s license in order to get insurance. And car insurance is mandatory in most states. We previously wrote a thorough guide on how to get car insurance in the U.S. as an international. Be sure to read that before finishing your research and car purchasing process.

is it possible can i buy car with international drivers license in the united states

What’s the verdict?

While it is possible for you to buy a car with an international driver’s license, and it’s definitely possible to get a car loan without a U.S. license, we recommend starting the process of getting a U.S. driver’s license. You will need it eventually to get insurance and to legally drive the car in most states.

A good idea would be to start the process of getting a U.S. driver’s license as you are researching which car to get. Or even before that. That will make the process quicker and easier for you. Depending on your country of origin, you may be able to just transfer your international driver’s license and get a U.S. license without taking a driving test.

We hope this cleared up your questions and has helped you in the process of getting a car in the United States.

We know that moving to the U.S. can be hard, but buying a car doesn’t have to be. Applying for a loan with us is quick and easy, and we’re here to help you. Click here to start an application and quickly get your rates.