Domestic Vs Import Cars: The Differences Explained

There has always been a debate between buying a domestic or an imported car. These terms still hold a lot of weight, and certain people’s garages will only ever house one or the other. This leaves a lot of people scratching their heads, wondering what the differences really are between domestic and import cars.

The differences between domestic and imported cars can’t be completely attributed to the country they were made in. There are some influences from the local culture and market, but that doesn’t paint the whole picture. If you look specifically at the brands, you’ll find that domestic cars tend to be bigger and more luxurious. With import cars, they’re safer, higher quality, can look better, and have better fuel efficiency.

In this ultimate guide, I’ll break it down for you. I’ll go in-depth and explain what domestic and import cars are, go through the differences, and explain some similarities. At the end of the guide, I’ll help you decide between the two and make the right choice.

What Is a Domestic Car?

A domestic car is technically any car made by an American-based car manufacturer. These auto companies have headquarters in the USA and are widely known as “American car companies”.

In the old days, they were called domestic cars because they were made in the States and then sold in the States (in other words, domestically made and sold). Today, the lines are a little blurred. I’ll talk about that more later on.

The reality is that many car manufacturers have been sold, merged, or have headquarters in multiple countries. For example, Stellantis whose HQ is in Hoofddorp, Netherlands owns Jeep, Mopar, RAM as well as some European market vehicles like Citroen, Fiat, Lancia, etc…

List of Domestic Car Manufacturers

To be clear, here is the list of the biggest modern domestic car manufacturers:

• Buick
• Cadillac
• Chevrolet
• GMC
• Chrysler
• Dodge
• Jeep
• RAM
• Ford
• Lincoln

There are about 90 other domestic car companies, but a lot of them aren’t commercially available to people like you or me. Others are specialty brands that only make a single model of vehicle. For the sake of argument, the above 10 are the ones to know.

Defining “Import Cars”

There is a little confusion when it comes to “import cars”. No, these cars don’t have to come from a ship in Japan to your front door to be considered imports. Some people wrongly assume that the car needs to have the steering wheel on the wrong side for it to be an import.

The truth is that any car that isn’t made by an American-based automotive manufacturer is considered an import. Some of the big players are companies like:

• Honda
• Nissan
• Toyota
• Hyundai
• BMW
• Audi
• Porsche
• Subaru
• VW
• Mercedes-Benz

If the company’s headquarters and the majority of its operations are outside of America, it’s an import car.

Defining Grey Imports/ Parallel Imports

There is a tricky subset of imports called “grey imports” or “parallel imports”. These terms refer to the scenario I explained earlier — having a car made in Japan specifically for a Japanese driver be imported over to America and driven by you.

If you’ve ever passed a driver on an American road who was driving from the passenger seat, they were in a parallel import.

By definition, this is a car that was bought outside of the official distribution system. Specifically, Nissan will make a car for an American driver and put it up in a car lot in the US. This is the official distribution system.

If you instead buy the same Nissan from a Japanese guy and have him ship the vehicle to you, it’s a parallel import.

The Problems with Grey Imports

Historically, this has been really tricky. America isn’t part of any universal safety or emissions standards — our standards are determined by federal groups in America. That means that a car that’s safe in Japan could be deemed unsafe and subsequently not street legal in America.

If you want to drive a true JDM car, that means getting a grey import from Japan.

That’s what happened with the Nissan Skyline of the 90s. An independent company did safety testing and reported their findings to America’s safety group, the NHTSA. They signed off on the car and then Skylines could finally be imported and driven here.

The only problem was that these safety tests weren’t complete and ultimately some lying was done on the company’s behalf. American customers would buy through this third-party then have the cars shipped over. This lasted about a decade before the NHTSA found out and charged the owner of the third-party company, who

Grey Import Age Rule

There’s a great rule that allows older grey imports to get into America legally. If the car is more than 25 years old, it gets put into a “classic car” category. The US Department of Transport (DOT) says that these cars can be grey imported over without an inspection, even if they don’t meet DOT standards.

That means you can bring over an early-90s Skyline with no problems nowadays. The biggest issue is finding a seller who wants to part way with their JDM classic.

Are Grey Import Cars Worth It?

Acquiring a grey import car is much more niche than a standard import vehicle. Unless you’re a collector or you want a car that’s a conversation starter, it’s not really worth getting a grey import car.

On paper, there’s nothing different between a Miata made for a Japanese driver or one made for an American driver. In a 1/4-mile race, it’s a dead tie. The major difference is that in Japan, their more-popular option is a Roadster that isn’t available here.

That makes things a little confusing, but here’s a bottom line: if a car has the same make, model, and trim, the Japanese-based version is more or less identical to the American version.

That should help you understand that grey import cars aren’t really worth it. You’ll be working with a company that isn’t Mazda when you have your Roadster shipped over. This opens the door for potential scams.

On top of that, you have to figure out the import process. It can be lengthy, expensive, and really confusing. Even with the help of a third-party seller, a lot of the responsibility falls on you.

Before buying the vehicle, you won’t be able to do a full inspection. You might get a few pictures, but there’s no feasible way for you to test drive a car that’s currently in Japan.

Since the car is also crossing country lines, warranties tend to disappear. Mazda can’t be certain that the shipping process was done correctly, so they’re not going to guarantee a warranty once you get the car in your possession.

Since parallel imports are a lot less common and more dangerous, I’ll focus on standard imports for the rest of this guide. As a reminder, a standard import is a car that’s sold in America even though it could have been built outside of it. It’s when the customer buys through Honda, not a random seller.

American-Made “Imports” and Vice Versa

This is where things get a little tricky: car manufacturers have manufacturing plants all over the world. For instance, Ford has 42 manufacturing plants outside of America. These plants will make cars for their corresponding markets. Japan-based Honda has 12 manufacturing facilities in America.

This makes things really confusing. A Mexican driver can own a Mexican-made American car, but we still call it an American domestic car? At the same time, you can drive an American-made Japanese car that was built in Ohio and it’s an “imported vehicle”.

These terms start to lose their meaning.

Back in the day, this wasn’t the case. Every Ford plant was on American soil, so they truly were domestic. There were no Honda plants in the States, so we truly did import every car we sold.

A Taste of Other Cultures

It’s interesting if you look at the vehicles made in different countries. Each vehicle speaks to the values that are important in that area.

For example, Italian cars are all about beauty. German cars focus on functionality and precision. Asian-made cars are highly reliable, safe, and more affordable. British cars are… British.

As an American, this is great news. You can pick and choose which qualities you’re looking for in a car as you shop outside of domestic cars.

With American-made cars, they’re more focused on space, luxury, and performance.

Better Safety

Domestic cars really lag behind when it comes to safety. It’s uncommon for an American company to hold the top seat when it comes to safety in any vehicle category.

If you look at the 2021 IIHS Top Safety Pick+ winners, there are 7 domestic vehicles out of the 77 winners.

Companies like Volvo and Subaru are built around the idea of safety. I can’t think of any American companies that can say the same. The simple fact is that imports are way safer than domestic vehicles.

Usually Higher Quality

Another benefit of buying outside of the US is that you’ll see a higher level of quality, most of the time. There are plenty of exceptions to this rule, but it’s still true. American cars aren’t especially reliable or high-quality.

Meanwhile, you’ll see a 30-year-old Civic or Camry on the road with no hint of giving up. Specifically Japanese and German cars are known to be high-quality at a reasonable price point.

This mostly plays into the working culture in these two countries. Their manufacturing plants take their work very seriously, and they have strict quality specs that need to be met with every vehicle that comes off the line.

Better-Looking Cars

Outside of a few Corvettes and muscle cars, American cars aren’t exceptionally good-looking. I’m not saying they’re ugly, but they don’t compare to most cars made outside of America.

Look at the mid-size car market. A new Toyota Camry, Nissan Altima, or Mazda 6 run circles around the Chevy Malibu in the looks department. Maybe that’s just personal preference, but I think it’d be a hard argument to say that America makes better-looking cars than the foreign market.

If you don’t believe me, here are some imports to look at:

• Aston Martin DBS Superleggera (England)
• Bugatti Chiron (France)
• Koenigsegg Gemera (Sweden)
• Maserati MC20 (Italy)
• Porsche 918 Spyder (Germany)
• Toyota Supra (Japan)

Many Different Options

As I mentioned earlier, America only has 10 brands of domestic vehicles. Comparatively, there are more than 200 import brands, dozens of which are household names in America.

With these numbers, it makes sense that there are way more import options than domestic. Plus, I’m talking about the cars made by one country compared to 60 other countries.

Since there are more options, you can be more specific with your requests. If you strictly shop domestically for cars, you’ll find yourself making a lot of compromises.

Nicer Technology

In my experience, every import car I’ve been in had way better technology than comparable domestic vehicles. You’ll find more modern infotainment systems, sensors, and computers scattered around the vehicle, and plenty of technology-based creature comforts in imported vehicles.

This could be because their market demands it, it might be a byproduct of the lower manufacturing costs, or it could be due to the technology manufacturing overseas. Whatever the case is, it seems to be pretty universal as you look at different matchups in the car world.

Higher Fuel Economy

If you’re not getting an electric car, then fuel economy should be a consideration. This will dictate how often you go to the gas pump and how much money you’re spending each year just on your commute.

American cars tend to be bigger, heavier, and less fuel-efficient. For example, a Chevy Cruze gets an estimated 28 mpg city and 38 mpg highway. A Japanese car in the same class is the Toyota Corolla which gets an estimated 31 mpg city and 40 mpg highway.

In a 13-gallon tank, that’s an extra 46 miles each fuel-up with the Corolla.

As gas prices keep going up, this is an important factor. Domestic cars almost always have a lower fuel economy than imported ones.

Less Expensive

Another huge benefit is the cost-effectiveness of imported cars. Since all of the manufacturing is done overseas (in markets where labor and parts are typically much cheaper), the car costs less money for the manufacturer. Even once you add in the import costs of getting the vehicles overseas, the MSRP is still lower than domestic options.

In addition, America doesn’t really have a “budget” brand. In other words, there are no American-made cars that are built specifically with cost-effectiveness across their line. In Asia, there are a number of options that meet these criteria.

If you have an identical domestic and imported vehicle, you’ll spend more on the domestic one.

You’re Supporting American Business

First and foremost, you’re supporting American manufacturing. Even though things get a little muddied since domestic brands manufacture outside of the US, all of the money still passes through American markets.

When you buy a Japanese car in America, the money will eventually make its way back to Japan. You’re giving the American dealership a little money and keeping them in business, but that’s about it.

Even if you buy a Honda through a private seller, the initial loan was paid to Honda.

Larger Vehicles

We Americans love our space and comfort. Domestic auto manufacturers understand that, so they give us larger vehicles with extra space inside.

If you want to sprawl out and enjoy some elbow room, you’re better off with a domestic vehicle.

Of course, different vehicles have different sizes. You’ll find tiny American cars, but they’ll still offer more space than the foreign vehicles in the same submarket.

More Luxurious Options

Another quality that American buyers look for is luxury. You’ll always find extra touches of luxury in domestic vehicles when you compare them to their imported rival.

If you don’t believe me, you need to sit in any generation of Cadillac. I had a buddy who drove an old Caddy and it felt like I was sitting in a newly renovated movie theater when I drove around with him.

American Trucks Can’t Be Beat

If you’re a fan of trucks, you probably have some strong opinions about the import car market. The truth is that nobody can compete with American trucks. 7 of the 10 top-selling trucks in America are American-made.

In the lineup, Japan takes the 4th, 8th, and 10th places.

American trucks are bigger, meaner, stronger, faster, and more reliable than the Japanese options. Inside, they’re a lot more comfortable and luxurious, as well.

Similarities Between Domestic and Imports

Even though these cars come from different parts of the world, there are a surprising amount of similarities between cars on the market. I’m not just talking about the fact that they all have four wheels.

Access to Purchase the Vehicle

It’s equally easy to buy a Japanese or American car in America, regardless of where you live. There are Honda dealerships that share property lines with Ford dealerships. Near me, there is one conglomerate that owns six dealerships — three are domestic brands and three are import brands.

Buying a Toyota is just as easy as buying a Chevy at the end of the day. There’s no six-week lead time for the cargo boat to bring your Japanese car over — the car is already here.

This is largely due to the American manufacturing of imported cars, but it’s also due to the sheer volume of imported cars that are made and shipped each year.

The Ability to Service the Vehicle

The same story is true if you want to have your vehicle serviced, repaired, or maintained. With the exception of rare imported vehicles, any standard shop can take care of a domestic or imported car.

There are plenty of Honda-specific service shops in America, despite the fact that the car brand is an import.

I know that some people only like to take their car to a manufacturer-specific workshop. You’ll find a ton of them, regardless of your car brand.

Reliability (in General)

There used to be a time where American cars were highly unreliable. This stigma has stuck around for decades, even though it’s a different time now.

Today, domestic and imported cars offer roughly the same level of reliability. If you look at a list of the most reliable vehicles on the market, a vast majority of them are imported cars, but domestic cars still pop up.

If you look at the general market, you’ll find that both types of vehicles have about the same level of reliability. They’ll last the same length of time if you take care of both cars equally well.

However, the best Japanese car will still outlast the best American car.

If you look at how these different cars are made, it makes sense that they’re generally the same when it comes to reliability. Remember, American cars can be fabricated overseas and imported cars can be made in America.

That means the same workforce could potentially make both styles of vehicles. That eliminates any social or cultural differences that impact quality. In addition, the price of labor and parts becomes less of an issue when both vehicles are made down the street from one another.

You Can Still Find What You Want

Remember, every make and model is designed for a specific customer. The fact that a Hummer truck and Prius sedan can exist in the same world is proof of this concept.

Why am I bringing this up? To remind you that you can still find the exact car that you’re looking for in a domestic or import market.

Some people are looking for qualities that are more common in domestic cars. Their neighbor might want a car that’s more aligned with what imported cars offer.

In the end, it’s just a matter of comparing the cars for what they are.

My Take: Forget About “Domestic” Vs “Import”

If you want my honest opinion, I’d say that you should forget all about the idea of domestic and import cars. Just because a car company’s headquarters is in one country doesn’t mean it’s the right option for you.

When you’re looking to buy or lease a car, just look at the cars and how they compare. You might stick with Subaru’s because they’re safe, but you shouldn’t buy them just because the car is a Japanese-made import.

The categories I discussed earlier were generalizations based on some specific brands. Honda and Toyota are highly reliable, but that doesn’t mean that any car that was ever made in Japan will outlast every American car. They just tend to focus on reliability.

I’m trying to say that the terms “domestic” and “import” aren’t telling the full story. Instead of shopping with these terms in mind, just look at the individual cars.

Sure, these cars have plenty of differences. At the same time, American-made cars have a lot of differences as you look from brand to brand. I think the comparison is too messy to definitively pick one side or the other.

I say you should drive whichever car makes you the happiest and forget about which country it came from.

Conclusion

Now you know all about domestic and import cars. I went through how they’re different, how they’re the same, and how the terms ultimately don’t mean too much in the end. If you want to read more car guides, explore the rest of my site. In addition, take a look at my list of car products that I highly recommend.