Foreign vs Domestic Cars: Which Is Right For You?
When it comes to deciding between a foreign and domestic vehicle, factors like price, reliability and where the car is produced will come into play. When you buy a Ford or Chevrolet, for example, you may automatically assume that these cars are made in the USA.
But in today’s global economy, “Made in America” may not be what it sounds like.
In this article, we’ll discuss…
What’s the difference between foreign and domestic cars?
There isn’t much of a difference between domestic cars and foreign ones anymore — in our global economy, foreign-made parts support American-made vehicles. According to the National Highway Traffic and Safety Administration (NHTSA), no vehicles on the market today can be considered 100% made in America.
To add to the confusion, many American companies manufacture their vehicles overseas, while many foreign automakers assemble their cars in U.S. factories. As an example, since 1982, more than 28.3 million Honda and Acura vehicles have been made in America. Toyota has built more than 13 million cars in its Kentucky factory since 1988.
How the foreign versus domestic battle has evolved
American-made cars were once a symbol of innovation and quality, and buyers were fiercely loyal to cars made in the USA. Since cars can last for years, the market soon became saturated. American automakers then turned their focus on aesthetics and gadgets to drum up demand to encourage buyers to trade up to a newer model. Soon, the American car became bigger, heavier and more expensive — but the industry’s focus on appearance resulted in the decline of quality.
By the 1970s, the market began to see an influx of foreign-made vehicles. In the early stages, the American consumer stayed away from these new entrants, which were seen as cheap, small and unreliable. But as foreign cars continued to evolve, they became more efficient and dependable. And as the quality and reliability of foreign cars improved, American consumers warmed up to buying imports — and the lower price of a foreign car didn’t hurt. Soon, foreign cars outshined American-made car brands.
Since that time, American-made cars have made generous strides for improved dependability and efficiency. Even so, many buyers continue to view cars made in the USA as inferior to their foreign counterparts. Still, vehicle prices are skyrocketing across the board, regardless of where a car was made.
What car brands are “Made in America?”
A vehicle’s provenance may not be a key factor when you first buy a car, but it can impact the cost of repairs. Overseas parts can be subject to tariffs, making them more expensive. In addition, global events can affect foreign parts, causing supply chain problems that can limit their availability. On the other hand, a car made with domestic parts may be cheaper and easier to fix.
To give car buyers additional information about the vehicles they purchase, the American Automobile Labeling Act (AALA) requires automakers to place a sticker on the new car’s window that discloses the percentage of U.S. or Canadian parts and foreign-supplied parts used in its production.
In addition, the AALA requires manufacturers to disclose:
- The country where the engine and transmission originated
- The name of any country (outside of the U.S. or Canada) that contributed at least 15% of the equipment used in the vehicle
- The final assembly point by city, state (as applicable) and country
- A statement indicating that the parts content doesn’t include the final assembly, distribution or any other non-parts costs
If you’re in the market for a new car, it’s helpful to know where the vehicle is manufactured and where its parts hail from. Using information from the 2022 AALA report provided by NHTSA, a car was included on the list when more than half of their parts came from North America and it was assembled in the United States.
| Make | Models |
|---|---|
| Ford | Bronco, Expedition, F150, Ranger, Mustang |
| Lincoln | Corsair |
| Acura | RDX, MDX, ILX, TLX, |
| Honda | Ridgeline, Pilot, Passport, Odyssey, CR-V, Civic, Accord |
| Hyundai | Elantra, Santa Fe |
| Kia | Telluride, Sorento |
| Nissan | Altima, Maxima, Murano, Pathfinder, Titan |
| Subaru | Ascent, Impreza, Legacy, Outback |
| Tesla | Model S, Model X, Model 3 Long Range, Model 3 Performance, Model Y |
| Lexus | ES 250/350, ES300h |
| Toyota | Avalon, Camry, Highlander, Sequoia, Sienna Hybrid, Tacoma, Tundra |
How to decide between a domestic and foreign vehicle
Deciding between a domestic and foreign vehicle often comes down to personal preference. You should consider your needs and each car’s respective strengths and weaknesses before you buy. Knowing where a car is made and where its parts come from is critical if you’re concerned about how to cover the cost of repairs. Since you can’t always tell by the automaker’s name, it is helpful to research the specific vehicle instead of the manufacturer before you buy so you don’t end up regretting your decision.
Pros and cons of cars made in the USA
| Pros | Cons |
|---|---|
Specializes in building SUVs and trucks Supports the U.S. economy Less expensive than foreign-made vehicles | Lower fuel efficiency ratings Lower reliability ratings Fewer options for sedans |
Pros and cons of cars made overseas
| Pros | Cons |
|---|---|
Better fuel efficiency Higher reliability ratings Better warranty coverage | Replacement parts may be costlier or more difficult to get Higher auto insurance rates More expensive |