Foreign vs. Domestic Cars: Essential Pros & Cons

If you’re in the market for a new car, you’ve probably entered the debate regarding foreign versus domestic automakers. While some say American-made cars aren’t as reliable as Japanese cars, others suggest that some foreign cars, such as German vehicles, are more prone to issues or more expensive to fix than domestic cars.

While some of these typecasts may hold some truth, it is vital to weigh each car brand’s benefits and drawbacks. Because of the auto industry’s globalization, when you buy a car in today’s market, it was likely produced in more than one location. However, if you’re interested in buying from a traditional foreign or domestic brand, here are the key differences and essential pros and cons of each.

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Difference Between Foreign and Domestic Cars

The definitions of domestic and foreign cars are not as clear-cut as they used to be. At one time, buying domestic meant that your vehicle was sourced and produced entirely in your home country while buying foreign meant it was produced completely overseas.

Today, however, most commercially made vehicles are not made in just one location. Nearly every automaker has global operations, so most vehicles are sourced from or assembled in multiple countries. For instance, Ford Motor Company is headquartered in Michigan but builds some cars in Canada and Mexico, while Toyota is headquartered in Japan and has U.S. operations.

If you are interested in buying a mostly American-made car, the American Automobile Labeling Act requires automakers to disclose what percentage of car parts are made in the USA. You can refer to the National Highway Traffic Safety Administration’s annual reports that detail U.S. and Canadian parts used by vehicle manufacturers to assemble vehicles.

Just as with any car purchase, consider the quality, price and depreciation value, style, and fuel efficiency of foreign versus domestic cars before you buy. Here are some ways in which domestic and imported cars stack up against each other.

Pros & Cons of Buying a Foreign Car

If you’re less concerned about supporting your local economy and want to find a vehicle that has overall excellent performance, is affordable, and has better fuel efficiency, buying foreign may be the right choice for you. However, buying an imported vehicle has its downsides, too.

Pro: Plenty of Top-Ranked Cars to Choose From

Consumer Reports’ 2020 Brand Report Card ranks Porsche, Genesis, Subaru, Mazda, and Lexus—all foreign cars—as the top-five car brands. Similarly, many of the 2021 best vehicle brands ranked by U.S. News & World Report also include foreign carmakers, including Mazda and Hyundai. On the whole, foreign cars rank higher than domestic cars for reliability, safety, and performance.

Pro: Reliable

Japanese cars, specifically, have gained a reputation for being reliable cars, meaning they require fewer repairs and may have higher resale values than domestic vehicles. For instance, in Kelley Blue Book’s 2020 Best Resale Value Awards, Japanese carmaker Toyota had vehicles in the SUV, car, truck, EV, and minivan categories recognized for retaining their value better than all other 2020 models.

Pro: Affordable

According to Kelley Blue Book, four of the five cheapest cars of 2020 include Asian car brands Hyundai, Honda, Kia, and Toyota. If you’re looking for affordability, you may find less expensive car choices if you opt to buy an imported vehicle.

Con: Performance Not Guaranteed

Although foreign cars rank higher than many domestic cars in many aspects, not all of them make the cut. For instance, foreign car brands including Volkswagen, MINI, Mercedes-Benz, and Volvo were ranked as some of the least reliable car brands of 2020, according to Consumer Reports.

Con: Replacing Parts May Be More Difficult

The stereotype that foreign cars are more expensive to repair than domestic vehicles has some truth to it. If your car has parts made abroad, it can be more difficult and expensive to replace them. When you consider global trade issues, this can affect the supply chain for imported cars even more.

Con: Not Supporting Local Economy

While some foreign cars are built in U.S. factories, when you buy a car with parts “Made in America,” you are more likely to support American workers.

Pros & Cons of Buying a Domestic Car

Although nearly every vehicle contains some parts made overseas, buying domestic and targeting cars that are “Made in America” typically ensures that either the engine and transmission were made in the U.S., it was assembled in the U.S., or a majority of the parts were made in the U.S. or Canada. When you buy domestic, you can support the local economy, and your car may require less expensive maintenance. However, you may find you have fewer and less efficient options than with foreign cars.

Pro: Better Trucks and SUVs

The three largest North American car manufacturers, General Motors, Fiat Chrysler, and Ford Motor Company, also known as “The Big Three,” have recently shifted their focus to producing more SUVs and trucks. The top three best-selling vehicles of 2020 include Ford’s F-Series trucks, the Chevrolet Silverado, and the Ram pickup.

Pro: Easier and Cheaper to Replace Parts and Get Maintenance

While many cars still require foreign parts, it’s still more likely that North American cars are made locally and require less money to replace and fix. With domestic cars, you can take them to your local mechanic rather than the dealership, which can also save you on repair costs.

Pro: Support Domestic Trade

When you buy domestic, you can more easily support your local economy and U.S. workers, as many domestic car brands have their headquarters, research and development facilities, and administrative offices in the U.S.

Con: Lower Rankings

Unlike many foreign brands, not all American-made cars fare well in car rankings. According to Consumer Reports’ The Least Reliable Car Brands of 2020, Lincoln, Ford, Cadillac, Jeep, and Chevrolet ranked among the top ten least reliable vehicle brands.

Con: Worse Fuel Efficiency

The U.S. has some of the lowest fuel efficiency standards worldwide, meaning American car manufacturers don’t have to meet rigorous fuel efficiency benchmarks. For this reason, you’re likely to find more foreign-made vehicles with better gas mileage.

Con: Fewer Cars to Choose From

Because The Big Three are more focused on producing SUVs and trucks, fewer U.S. car manufacturers are producing sedans. If you are looking to purchase a domestic car rather than an SUV or truck, you will have fewer options than if you buy foreign.

The Final Word

With today’s globalized auto industry, it’s likely that any vehicle you buy will contain some foreign-made parts. However, when choosing between foreign and domestic cars, there are some key differences regarding price, overall rankings, and variety.

The choice between a foreign or domestic car comes down to personal preference and what vehicle will best suit your needs. No matter which vehicle brand you choose, you can protect your purchase by investing in all-weather car covers to safeguard your car year-round.

Rachael is a content writer at sendkoala.com, who has written on a Ultimate Resume Guide, from colored diamonds to SEO software. In her spare time, she enjoys singing, sketching, cooking, and video games.