Military Auto Loans: Advice For Soldiers Looking To Buy A Car

Many car dealerships, especially those located near a military base, will give a substantial discount to military personnel. This may not be standard policy, but should always inquire if such a reduction in the purchase price of a vehicle is available. If you already have financing for your car loan in place from a lender, or secure one through the dealership, you may be able to save $500-$1,000 by taking this step. Also, the dealership might want to see proof of your military service, so be prepared to provide the agency with a copy of your military ID card when you set out to buy a car.

Deciding what to car to buy and where to buy

If you want to feel more confident when buying a new care, note that a family financial counselor may be available, free of charge, at your military installation’s Family Support Center. After reviewing your financial situation, a counselor can help you determine if buying a new car (and the monthly military auto loan payment that will go with it) fits your budget. You may also discuss the establishment of a car maintenance fund, the related car insurance, and some ways of reducing your other current expenses to ensure that you stay on course financially. It is crucial that you know exactly how much you can afford before you sign any paperwork.

Since those in the military are often transferred and move frequently, most installations have a reserved space (jokingly referred to as a “lemon lot”) where military personnel display the cars they want to sell, often because of impending deployment. If you are interested in buying a used car and are unable to find anything suitable, check out the BX/PX/NEX, where you may find advertisements for used car on the community bulletin board, and refer to your base’s official newspaper as well. When you find a used car that you like, remember to have a mechanic check it out before you seal the deal.

Make the most of your military status with military auto loans

Some auto insurance companies cater only to those in the military, and you may get a very good rate from one of them because of your active-duty status, and others may also give you a discount. Start looking for insurance coverage before you buy a car, and as you investigate the rates being offered, mention that you are an active duty and would like to know what discounts are available to you. When you feel that you have found a good deal, go to the dealership, complete the sale and have your insurer fax a copy of your “proof of insurance’ to them. Then both your loan and your auto insurance will be in place

As a member of the military you are in a unique position when it comes to paying off any type of loan. Shirking your responsibilities is frowned on in the military, and your creditors know that if you fail to meet any of your obligations, they can contact your supervisor and inform him or her that you are behind in your payments.

Going overseas is a special case

If you find that you are being transferred out of the country, you might one want to sell both of your family cars and buy a new one. Be sure to tell the lender that your new car will be going overseas because the regulations covering certain lenders do not allow a vehicle to be shipped out of the country if the auto loan is not paid off.

A word about to the wise about auto loans

If a loan company offers you as extremely high interest rate, and “extras” like life insurance and disability insurance coverage are automatically required, this company deserves to be “black listed” at your military base and you should continue your hunt for a more reputable lender. After the fact, especially if you are inexperienced in shopping for a car, if you sincerely feel that you have been the victim of some deceptive business practice, discuss this with your legal office, First Sergeant, or supervisor to see if the contract can be voided. The dealer may comply when given the choice between rescinding the contract and being “blacklisted” at your military base.