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When relocating to a new country, securing a car is usually one of the top priorities.
For most foreign professionals on a two-to-four-year work assignment, car leasing makes more sense than buying a car outright.
With a car lease, you’re only paying for the amount that the car is expected to lose in value during the lease term (instead of paying off the car in full). At the end of the term, you simply return the car without having to worry about finding a new buyer.
However, as an expat, there are a few things to keep in mind when starting the car leasing process.
1. Collect the required documents
It can be challenging for expats to lease a car in their new country because dealerships normally require local credit history. However, ExpatRide is able to work around that problem by collecting other documents that demonstrate that the customer is credit-worthy.
The documents needed to work around the credit system vary between countries, but commonly, some or all of the following are required:
• Visa or work permit
• Offer Letter including annual compensation
• Passport
• Driver’s License (local or from home country)
• Social Security Card / National ID number
• Apartment contract
Please check the country pages for more information about the documents required for each country.
2. Check Driver’s License Requirements
In general, it may be wise to obtain an International Driver’s License (IDP) before you leave your home country. If you’re relocating within the EU, you can often drive legally in your new country with a driver’s license from your home country. On the other hand, if you’re moving to the United States, you will need to get a Social Security Number (SSN) and a local U.S. driver’s license as soon as possible.
No matter what country you’re relocating to, find out the local driver’s license requirements. In many countries, you’ll need to either exchange your foreign driver’s license or obtain a new driver’s license.
Check the ExpatRide country pages for general information and useful links.
3. Research Expected Delivery Times where you are Moving
Depending on the location, your car selection, and the local requirements to lease a car, the delivery time could be anywhere from a few days up until a few months.
Usually, the more flexible you are with your car selection, the faster you can obtain your lease. Many times, vehicle providers have popular cars in stock that could be available on short notice. On the other hand, if you opt for a factory-ordered vehicle of a make not common in your new country, you could be in for a long wait.
In some countries, a Social Security Number / National ID number and a local driver’s license are needed before finalizing an agreement, which could prolong the car leasing process. To avoid being stranded without a car, make sure to research the expected delivery time beforehand here.
4. Book a Rental Car in Advance Before Moving to Ensure a Good Price and Availability in the Car Class You Need
Even if you start the car leasing process before you leave your home country, it would be rare to have your new car available on arrival in your new location. For this reason, plan accordingly and book a rental car that is ready to use right away.
Many times, certain sizes of rental cars sell out quickly, and therefore, it is wise to reserve your rental early in advance. Also, making your rental car reservation ahead of time makes it easier to find affordable rates. For more information about rental cars, follow this link.
5. Understand the Pricing
Before signing a lease agreement, make sure you’re aware of all the factors that will affect the total cost, aside from the monthly car payments. In many cases, you will be asked for a down payment to initiate your lease. The down payment is interest-free money that goes towards the price of your car. Generally speaking, a higher down payment translates to lower monthly car payments.
Instead of a down payment, some lease providers will ask for a deposit of two or three months of car payments to start the lease as security. At the end of the lease, the deposit is returned in full, unless there is damage to the car.
To avoid unpleasant surprises, ask to see the itemized price including taxes, car registration, and any fees before committing to an agreement.
Your expected annual mileage is also important to carefully consider beforehand, since going over your allotted mileage can be quite expensive.
6. Find Out what is Included in Your Lease (and what isn’t)
The standard items included in a lease vary from country to country (and sometimes from provider to provider). Items such as maintenance, roadside assistance, and insurance may or may not be part of your lease.
In some countries (such as the United States), insurance is paid for separately and can amount to 200 – 400 USD / month. In most countries, gas is not included in a car lease.
Find out if your vehicle comes with a warranty and the terms and conditions.
7. Get a Quote for Auto Insurance
There are many factors that affect the rate for auto insurance, such as the driver’s age, location, driving record, and credit history. For expats, the lack of local credit history and driving record can be a disadvantage.
For this reason, make sure you obtain a so-called “no-claim bonus letter” from the insurance provider in your home country, outlining the past 5 years of your driving history. Documentation of your foreign driving history may help with getting a better rate and avoid an “inexperienced driver surcharge.”
Please keep in mind that for an accurate auto insurance quote, you would need to provide the insurance company with the VIN of the vehicle. In the U.S., a local driver’s license could also lower your rate for auto insurance.
Need help with leasing a car? Contact CARS@ExpatRide.com or visit www.expatride.com
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