Foreign vs. Domestic Cars: Which Is Right for You?

Some consumers want to support the U.S. economy by buying cars made with American labor and parts. But the difference between foreign- and American-made vehicles isn’t as clear as it once was.

In today’s global economy, it’s impossible to find a car with 100% U.S. parts, and several classic American car companies have merged with (or been bought by) foreign car manufacturers. Still, if you like domestic cars, there are plenty to choose from.

American cars

When people refer to American car brands, they usually mean car manufacturers with headquarters in the U.S. The following popular American car manufacturers fall into this group.

*Though Stellantis operates its North American branch out of Michigan, its primary headquarters is in Amsterdam. Stellantis merged with Fiat Chrysler Automobiles in 2021, acquiring American-founded car brands Chrysler, Dodge, Jeep and Ram at that time.

Foreign cars

East Asian and European brands dominate the list of foreign car manufacturers.

*Though it is its own separate company, Nissan Motor Corporation is part of the Renault-Nissan-Mitsubishi Alliance.

Here’s where things get (more) complicated: Several major foreign car manufacturers like Honda, Toyota, Hyundai, Nissan and Mazda have subsidiary companies in the U.S.

And with quintessentially American brands like Chrysler and Jeep now owned by an Amsterdam-based parent, the distinction between American and foreign cars is murkier than ever.

The search for the “most American car”

The American Automobile Labeling Act (AALA) requires that automakers disclose where they source parts and assemble passenger vehicles sold in the U.S.

Every year, car manufacturers must report:

• What percentage (by value) of each car model’s parts are from the U.S. or Canada
• Where each car model is assembled
• Where the engine is from
• Where the transmission is from
• Countries that contribute 15% or more of the car’s parts, and what percentage each country contributed

Surprisingly, some of the highest percentages of American/Canadian parts are in cars made by Honda, Mercedes-Benz and Toyota. And each of these automakers has factories in the U.S.

So if you’re looking for American-made cars, the following models are currently made with at least 50% U.S. or Canadian parts and are assembled in the U.S.:

*Some Honda CR-V FWD, Civic 5Dr and CR-V AWD models are made outside the U.S. See the 2023 AALA Report for details.

Are American cars reliable?

According to Consumer Reports, all of the top 10 most reliable vehicles of 2023 come from foreign automakers, with Lexus, Toyota, Mini, Acura and Honda topping the list.

Among American manufacturers, only Buick, Tesla and Ram rank in the top 15 for reliability.

That said, if you’re looking for a dependable car made in the U.S., many of the most reliable foreign car brands have subsidiaries that manufacture and assemble cars in America with local parts.

Which cars have the best fuel economy?

Although American manufacturers like Tesla and Lucid have made recent advances, foreign automakers dominated the U.S. government’s list of best fuel economy vehicles in 2024.

Many of the top-rated cars are foreign EVs or hybrids, including models from BMW, Hyundai, Volvo, Audi and Kia.

But American manufacturers do outshine foreign automakers in terms of fuel economy in one area: trucks.

The Ford Maverick HEV FWD, Chevrolet Silverado EV and Chrysler Pacifica Hybrid lead in the most fuel-efficient small/standard pickup truck and minivan categories.

Foreign or domestic cars: Which should you get?

As mentioned, the distinction between “American-made” cars and foreign cars doesn’t exist the way it once did. For example, several of the cars with the most parts from the U.S. or Canada are made by American subsidiaries of foreign companies like Honda and Volkswagen.

When buying a car, research your options based on the factors that are most important to you:

• If you want to save money or the environment, consider the car’s fuel economy.
• If you’re concerned about reliability, read up on reliability and safety ratings.
• If you want to support the U.S. economy, check out the latest AALA report from the National Highway Traffic Safety Administration to find a vehicle with (mostly) American parts.