Moving to America

[leonardman]

Hi guys,

I'm moving to America, Florida to be exact. Just have some questions about life/car buying in America hope you guys don't mind me asking:

1. How do you build credit? I understand I need good credit to be able to finance a car.
2. Difference between bank finance and leasing a car. Which is better?
3. Recommended insurance companies?

That's it for now! thanks guys!

[NEFARIOUS]

Welcome to the US. Where in Asia are you coming from?

1. I'm sure there's probably faster/easier ways (I'm not the most financially savvy), but apply for a credit card and start paying it on time as a good start, and hope they raise your limit enough times to have at least a good few thousand in revolving credit. But if you're buying a used car, stay the hell away from places know as "buy here pay here"; they're vultures and will repo your car for ANYTHING until it's paid off; even a friend who complained of a mechanical issue but never had time to bring it in? Her friendly neighborhood tow truck showed up, and it's not AAA (automobile club)...

2. They both require you to make payments, except at the end of your financing terms, your car is yours to keep. Lease is a glorified rental; you are allotted a specific term and amount of miles per year, and you have to return the car at the end of the leasing term. There's more to it, but that's the basic difference.

3. In my experience and status (driving for 12 years, no accidents or tickets = Good Driver Discount, 29 years old), GEICO is the cheapest; the only company that I pay below $100 a month for full coverage. If you're a purist, BMW's official insurance is sponsored through Liberty Mutual.

Either way, it's also highly recommended you apply for roadside assistance; BMW Assist is expensive but worth it, especially since our cars are notoriously hard to break into, and if you lose your key or it locks in the car, BMW Assist may have a trick up their sleeves, plus you get stolen vehicle tracking/recovery, but I have no clue how long their tow trucks take to respond compared to AAA. Speaking of AAA, they're another cheaper option, and their advantage is that with a huge nationwide network of authorized tow trucks, they can get you back on the road or to your mechanic fairly quickly... Except their locksmiths aren't exactly equipped for high security German machinery, so be careful with your key (unless of course, you have Comfort Access), and they offer no theft recovery.

[leonardman]

Hi Nefarious! appreciate the reply!

I'm coming from the Philippines. I was actually born in America. spent my first few years of childhood there but moved to the Philippines at age 3. I have visited America a few times since then. spending around 2 months per visit. But now moving there for good!

[V1.47fan]

[Cuz5150]

Originally Posted by V1.47fan

^^^Classic^^^

47fan, That video should be mandatory for everyone coming to this country.

[Billup]

Originally Posted by leonardman

Hi guys,

I'm moving to America, Florida to be exact. Just have some questions about life/car buying in America hope you guys don't mind me asking:

1. How do you build credit? I understand I need good credit to be able to finance a car.
2. Difference between bank finance and leasing a car. Which is better?
3. Recommended insurance companies?

That's it for now! thanks guys!

1. You build credit with having things like loans, credit cards, mortgage, or other financed items like furniture, cars, etc. Start with a credit card with a good intro and rewards (members on here can point you to which ones)

2. If you finance you are purchasing the car. Leasing you are essentially paying to borrow the car, you can buy the car out at the end of the lease if you choose, people usually lease if they don't drive a lot or like a new car more often.

3. Insurance varies. You can call anyone from State Farm to Geico, depending on what car you choose and your driving record will determine what your premiums are.

[leonardman]

thank you for the response Billup! greatly appreciate it!!

[P1]

I can speak to this as I've gone through this... twice. First time I moved here was with my parents. Second time was after I got married, and I had a green card. This is a little known fact, but your credit is completely wiped when you receive your green card and you start from scratch. No good credit, no bad credit. This is about as bad as it gets, but you'll be in the same position. I went in to buy a car, just like you will, and ended up having to pay cash for it. I could not even qualify for the smallest loan they had, which was a few thousand dollars.

The frustrating thing is that you'll have to put down deposits everywhere since you don't have credit, so make sure you can cover that. Best way to start building credit, or at least how I did it, was become a member of an American bank (take your pick) and open up a credit card where, again, you have to put down a certain amount of money in order to secure a credit line. So in other words, they would give you a credit card with a $500 limit but you'd have to put $500 down to secure it. Annoying, again, but start using that credit card responsibly and eventually they will give back the $500 deposit and increase your spending limit. Make sure that whatever your spending limit is, that you only even get to half of that balance. So if your spending limit is $5,000, just make sure you keep the balance to $2,500 or below.

Then start finding other places where you can easily obtain finance. Yes, be the guy that gets a petrol (gas) card at Shell. Buy a TV from Best Buy and finance it. Go to Aaron's Rent's and finance a couch. It's all idiotic and annoying, but there's really no other way around it. Good credit in this country will end up saving you a lot of money on loans etc. in the long term.

I also found out that, when buying a car, some companies are more lenient than others. For example, if you were to buy an Audi, Audi Financing takes into account that a lot of their customers are foreign and might not have credit. Of course they will want to see your bank balance and your historic wages from the past one or two years, but you get where I'm going.

[P1]

Oh, and I've been with Allstate since I moved here.

[954Stealth]

Bank of America has a good secured credit program. If you manage it well for a year or so, they'll upgrade it to an unsecured card.
Be careful of predatory credit card companies with $200 or $300 limits and $150+ activation fees. They come with 20% or higher APRs. A friend of mine got in trouble with these and the balance would go up even though she paid the minimum.
Whatever card you get, try to keep the utilization below 10%...FICO likes this.

[leonardman]

I actually have saved enough money here in the Philippines, I can buy a 50,000 dollar car in cash if i really need a car in my first few months there. But won't that get me in trouble with the IRS?

[P1]

Originally Posted by leonardman

I actually have saved enough money here in the Philippines, I can buy a 50,000 dollar car in cash if i really need a car in my first few months there. But won't that get me in trouble with the IRS?

Why on earth would that get you into trouble? If I were you, go ahead and buy a cash car but don't spend all your money on that. Go in and buy a reliable used vehicle, since really all you'll need right off the bat is a way to get around.

Once settled, you can always get another car etc. I know people get excited about moving to the US, but I've seen people come here way too excited. Best to just take it easy for the first few months.

[fecurtis]

Originally Posted by leonardman

Hi guys,

I'm moving to America, Florida to be exact. Just have some questions about life/car buying in America hope you guys don't mind me asking:

1. How do you build credit? I understand I need good credit to be able to finance a car.
2. Difference between bank finance and leasing a car. Which is better?
3. Recommended insurance companies?

That's it for now! thanks guys!

Welp, point 1 is where you'll run into the most headaches.

To build credit you'll have to apply for credit cards and keep them in good standing (i.e. pay them on time, ideally in full, and not get above 20% in credit utilization, so if you had a $1,000 credit limit, it's not good to have a balance at the end of the month of over $200 as that'd put you over the 20% credit utilization ratio). If you have a hard time finding a good credit card, you could always apply for a secured credit card. You give the bank money up front and then you get a credit card. That money you give them is used to pay the bill if you can't afford it, but it's best to just pay it off in full every month without having to resort to that.

With that you can get a good credit score after 6 months to a year. However, here's where you'll get dinged. You'll be a red flag for two reasons, one on your credit report, you'll have no history of paying off a car loan. Two, the age of your credit card will be very young, not giving the lender much to go off in judging your credit history. With BMW, this may ding you in higher interest rates and/or requiring a higher down payment.

This brings me to my second point, leasing is generally good if you don't drive much, want a new car every couple years, and don't want to put much down. However, going back to point 1, your lack of credit history/car loan history will likely require a sizable down payment for either a lease or loan, so you may be better off financing. You shouldn't really put money down on a lease.

Your third question, I'd say shop around for the best insurance rate possible and pit insurance companies against each other to give you the best possible rate. Your lack of credit could hurt you here too though.

[leonardman]

Originally Posted by P1et

Why on earth would that get you into trouble? If I were you, go ahead and buy a cash car but don't spend all your money on that. Go in and buy a reliable used vehicle, since really all you'll need right off the bat is a way to get around.

Once settled, you can always get another car etc. I know people get excited about moving to the US, but I've seen people come here way too excited. Best to just take it easy for the first few months.

Because here in the Philippines buying a new car with Cash will end up with our tax collectors showing up at our home, harrassing us and checking for loopholes to try and pry money from us! incredibly corrupt

[fecurtis]

Originally Posted by leonardman

Because here in the Philippines buying a new car with Cash will end up with our tax collectors showing up at our home, harrassing us and checking for loopholes to try and pry money from us! incredibly corrupt

You don't have to worry about that in America.

However, depositing over $10,000 in cash may have the IRS reaching out to you asking you where the hell you got that money from.

[Mr Tonka]

I'm no expert but i believe financing of vehicles and houses carry more weight on your credit report than revolving credit cards and the like.

If you have $50k within your budget to purchase a car, i would find a $40k car to purchase and try to finance some portion of it. Credit has more of a bearing on how much interest you pay than loan approval. Think of it as loan to value of what your purchasing.

If you buy a car that sells at the auction for $40k (retail at $47 or so) and you give them $30k at purchase, this leaves only $17k to finance. The bank looks at it as if they have to repo the car for non payment, they will be able to recoup the outstanding loan amount.

The long and short of it is; companies are more willing to finance a smaller amount of the actual value of the product if there is away to get that product back should you default on the loan.

You will also be required to have "Full Coverage" from your insurance company when you have a lone for a car.

[leonardman]

Originally Posted by fecurtis

You don't have to worry about that in America.

However, depositing over $10,000 in cash may have the IRS reaching out to you asking you where the hell you got that money from.

If thats the case. how do i transfer my money to the US?

[Mr Tonka]

Originally Posted by leonardman

If thats the case. how do i transfer my money to the US?

Again, no expert, but i don't believe there will be any taxes levied on the money you move here with. Only the money you earn while living in the US.

You'll want to inquire with an expert about this though.

[fecurtis]

Originally Posted by leonardman

If thats the case. how do i transfer my money to the US?

You can transfer that money over without issue. It's when you earn money here and deposit it in large amounts that'll get the IRS's attention.

[fecurtis]

Originally Posted by Mr Tonka

I'm no expert but i believe financing of vehicles and houses carry more weight on your credit report than revolving credit cards and the like.

Actually they don't. Revolving lines of credit carry the biggest weight (along with other factors like how much available credit these cards have, missed payments, etc).

In the end though, it's just a formula. When taking out larger loans for things like homes and cars, the lender will look at your score but also look at the detail behind it.

You can have an 800+ credit score and STILL have trouble getting a car or a home. Handling your credit card bills is one thing, having a bank front you $50k+ is an entirely different thing.

My brother ran into that issue. In HS my parents bought him a new Honda Civic and he drove that all through HS and college. Graudated, worked a few years then wanted an F30 328i. He's got a few credit cards, excellent credit and BMWFS wanted him to put more money down despite that. He'd never had a large loan before so BMWFS wanted a higher down payment. I never ran into that issue before because I have car loans in my credit history, all with no missed payments and all paid off. The dealer worked with BMWFS and got the larger down payment requirement dropped though.

[monkeybingo]

Hey Leonard,

Are you A US citizen?

[UncleWede]

You have to declare at customs money amounts over $10K. I guarantee it's so the IRS can come looking for their cut.