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Rebates and Discounts

  • Military Auto Discounts

    Many auto manufacturers offer special rebates and incentives for service members. We've collected some of the most popular.

The Ins and Outs of Military Car Loans

Military Auto Loans

So the time has come to purchase that vehicle you've had your eye on -- but what kind of loan should you get to pay for it? Any quick search on the Internet brings up literally hundreds of companies that offer loans, and some also offer "military car loans." What are these military car loans about, and what advantages do they offer? Read on.

The Basics

The main differentiator between a military car loan and a regular car loan is simple: the military car loan is only for those who are currently serving on active duty, or are a military retiree (20 years or more served). But what sets them apart from the usual car loan?

Low Interest Rates - Military car loans generally have lower interest rates than other types of loans. Here's a quick example about the power of interest rates: If you take out a $15,000 loan to be paid off within four years at a 10% interest rate, you'll end up paying $380.44 a month, or $18,261.12 total when all's said and done. If you have the same exact loan at a 7% interest rate, you'll end up paying $356.19 per month, or $17,241.12 total. A few percentage points equals a few hundred bucks a year, which can make a big difference when you're trying to balance your budget.

Low Down Payment - Military car loans can offer a lower down payment compared to regular loans, which means you're required to pay less money up front. This can come in handy if you don't have a lot saved up to buy your vehicle.

Easier Approval - If your credit rating is lower than average, or you have a limited credit history, you may have an easier time getting approval with a military car loan compared to a regular car loan. In most cases you can apply for a loan and get approved online.

Longer payment periods - Military car loans are also known to have relatively longer repayment periods, which means that you'll have lower monthly payments.

Additional discounts and rebates - Some lending companies also have discounts and rebates if your car loan is used to buy a new vehicle.

The Cons

Having noted all the advantages of military auto loans, take heed: these loans may not be for you if you fall into one of the following categories:

If you have enough or nearly enough money to buy a car outright - If you can pay for the full amount for your vehicle up front without putting yourself in financial hardship, the amount you'll save on interest rates alone ($7,000-$8,000 from the above example) makes it worth it. And if you almost have enough but not quite, it's worth it to scrimp and save for a few extra months. Put yourself on a budget plan and contribute more money each month to your "auto fund."

Loan Risks - They may call them military auto loans, but these loans are offered by private financial institutions, so you're subject to the same rules and potential penalties as a civilian taking out a loan. On top of that, an auto loan, unlike an unsecured debt, cannot be written off by filing for bankruptcy. If you end up defaulting on your loan, it will severely damage your credit rating and ability to take out loans in the future.

Tips to Getting a Military Car Loan:

1. Know which vehicle you want to buy before applying for a loan. This will also help you determine exactly how much of a loan you want.

2. Do some comparison shopping - Don't apply for a loan from the first institution you run into. Check a few places out, and see if they offer favorable terms for your specific situation.

3. Get your proof of eligibility in order - Make sure you have your military ID and proofs of service handy. You'll also need your social security number and permanent address.

4. Your contact information - The institution you're taking out the loan from will want to keep in touch with you, no matter where you're stationed, so be sure you have several addresses where you can be contacted at (i.e., your family's home, your base).

5. Your credit report -- Get a credit report that you can hand off to the lending institution. Some lenders may do this for you, but you can also get a free credit report at freecreditreport.com.

6. The sign-off - If you are out of the country or cannot sign your loan in person, be sure that you assign power of attorney to someone to sign on your behalf, as well as a copy of your driver's license. Some states may also require notarization.

Some Military Auto Loan Providers
Miles
Navy Federal
Omni Financial
Pioneer Services
USAA

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