Buying/Leasing a Vehicle
Buying a Car
Like the UK, there are a number of ways to buy a car in the United States. You can buy privately or from a car dealer, one thing to remember is to negotiate, the asking price is not set in stone. For convenience many new arrivals purchase their predecessors vehicle when they leave. Kelly Blue Book is a good site for checking car prices. Many choose to purchase cars from Carmax – they have a huge selection of quality used cars at many locations, and have a no haggle policy, so the advertised price is not negotiable.
Car purchase costs vary significantly based on age, size and country of manufacture. There is a wide range of choice and vehicles can be sourced within any budget but beware your expectations of owning and a large new SUV – these will set you back in purchase, fuel and maintenance costs. The cost of vehicle repairs and parts in some areas can costly so be prepared to shop around. Fuel in the US is cheaper but the US cars are famously poor on fuel economy. A high value vehicle purchased at the start of assignment may prove difficult to sell at the end without a significant discount being offered. This has affected numerous SP/UKBC who underestimated the loss they would face and then the factor of having to then purchase a vehicle at the new assignment location.
A1 and A2 Visa Holders Working at the Embassy
All staff on A1 and A2 visas who are working at the Embassy and accredited with the State Department are entitled to buy two vehicles free of local sales tax. You should be aware that when you sell that vehicle, unless it is sold to another member of the diplomatic community you will be liable to pay a surcharge.
You will be guided through this process by Protocol during your induction programme.
- The buyer must request that the seller/leaser contact the Tax and Customs Programs Office of the Office of Foreign Missions (OFM) for a determination on the tax-exempt status of the purchaser. OFM will provide a letter to the seller stating that the purchaser is eligible for tax exemption.
- The only legal means of obtaining a diplomatic tax exemption on the purchase of a vehicle is through the issuance of this letter by the OFM.
- You should not under any circumstances pay tax on a vehicle as it cannot be reclaimed after the purchase.
- There is no limit on the number of vehicles which may be purchased, however, only two vehicles per officer may be purchased tax free.
There is a Facebook page where the diplomatic community in D.C. post cars for sale.
A1 Visa Holders Only
Leasing a car
Leasing a car is an alternative to buying; however if you have no US credit history the leasing company may not offer you a contract or charge a higher rate of interest. For A1 and A2 visa holders the Department of State will impose a surcharge of 10% of the lease value on cars leased for more than 30 days. For further guidance please contact HR staffs.
Note – Ensure there is a get out clause in your contract if you intend to sign for the full tour. A premature return to the UK can be expensive if you need to break a contract.
BDSUS Accommodation Policy states the entitlement is for a property within a 45 minute commute time to work outside of rush hour traffic in built up areas. If your work management does not permit flexible working hours and you are faced with travelling during rush hour traffic this may increase your commute travel time to over an hour.
It is likely that you will be accommodated further afield from daily living facilities (shops, banks, doctors etc) than you are used to in the UK. There are likely to be fewer pavements and little street lighting, if any, in residential areas making it undesirable and potentially unsafe to walk to amenities. The US has designed their shopping areas around the use of a car.
Public transport may in some areas be non existent. In others, infrequent or unreliable even in built up areas. Your own local area may be isolated and require two cars in order to avoid the feeling of complete isolation whilst the SP is at work. Most families end up having two cars.
Under the NATO SOFA, those on a NATO Visa (only the SP) may drive on their UK licence. For dependents a local state driving licence will need to be applied for. This may mean taking another driving test in order to obtain the respective state driving license. This could be time consuming and again associated costs cannot be reimbursed by the MOD. In some states children are able to drive with a learners permit at the age of 15, each state has different rules and regulations regarding the process by which minors obtain a driving license or driving permit. Depending on the state it could be the enrolment into a driving school although driving instructors are not as common in the US as they are in the UK and in the majority of instances it falls to a parent to teach a child to drive. All personnel on A1/A2 Visas will be issued with a US driving license as part of the accreditation process.
Car purchase costs vary significantly based on age, size and country of manufacture. There is a wide range of choice and vehicles can be sourced within any budget but beware your expectations of owning and a large new SUV – these will set you back in purchase, fuel and maintenance costs. The cost of vehicle repairs and parts in some areas can costly so be prepared to shop around. Fuel in the US is cheaper but the US cars are famously poor on fuel economy. A high value vehicle purchased at the start of assignment may prove difficult to sell at the end without a significant discount being offered. This has affected numerous SP/UKBC who underestimated the loss they would face and then the factor of having to then purchase a vehicle at the new assignment location. LOA compensates in part for the purchase and sale of one car.
For those who qualify Cost Of Living Allowance (COLA) package (Attaché status only), investigate the possibility of shipping a car out to the US and back to the UK, once your assignment is complete. For all military personnel it is possible to import your UK vehicle into the USA for personal use without the need to abide by some of the strict entry requirements. Visit the following website for more details: http://www.cbp.gov/trade/basic-import-export/importing-car
Insurance for vehicles is likely to be more expensive for the equivalent vehicle than the UK, particularly as not many US insurance companies will accept all or some of your no claims bonus from a foreign country. Again, shop around and consider insurance as part of the cost-effectiveness of your vehicle choice. The reverse is also true when moving back to the UK and the break in UK no claims. However, it is significantly cheaper to insure minors to drive in the US, particularly when they are driving on a permit and are required to have an adult with them in the car. The use of an insurance broker may help, also membership of a university alumnus or other associations may assist as may a letter from your previous UK insurance company.
All personnel assigned to the US are currently entitled to two weeks hire car and fuel costs. You will need a valid credit card in order to secure the car upon collection. The MOD does not pay for child seats, Satellite Navigation devices, spouse driving the vehicle insurance and upgrades. If you subsequently wish to hire a car in the US for personal use, try using UK websites as these can work out cheaper.