Military Car Loans: Deploy your best options

Male U.S. service member sitting on the floor of his living room and playing with his young daughterImage: Male U.S. service member sitting on the floor of his living room and playing with his young daughter

In a Nutshell

Life as a U.S. service member has its own set of challenges. But when it comes to getting a car loan, you may have options and access to deals that civilians don’t. Here’s what you need to know if you’re on a mission to find your next car.
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Serving your country may mean some extra perks when it comes to buying a car.

From special military-only lending options to dealerships offering a discount on the car itself, you may be able to find favorable terms and reduced rates that suit both your needs and your budget.

Let’s explore some of those options below.

3 best military car loans

Credit union auto loans for military personnel can offer benefits that loans from many traditional lenders may not. If you are looking for vehicle financing, auto loans offered by military credit unions could be a great place to start.

To get a military car loan, you must be an active or retired military personnel or related to one. After qualifying as a military member, you will still have to get approved just like any other loan. But the credit and other loan requirements may differ per lender.

Since military credit unions were created specifically to meet the needs of service members, they might be more familiar with the details and nuances of military life and can help you navigate the borrowing process accordingly.

If you’re considering getting your auto loan from a military credit union, here are two credit union options and one military bank option.

Navy Federal Credit Union

Navy Federal Credit Union is a military credit union insured by the National Credit Union Administration. With membership limited to military personnel and their families and household members, Navy Federal offers loans for new cars and used cars. This credit union may also be able to help you refinance your current auto loan.

However, if you’re looking for help with a lease buyout loan, you’ll have to look elsewhere.

For those who qualify, the credit union offers a low starting annual percentage rate, or APR. Not only does the credit union offer lower rates than some traditional banks, but if you qualify it may also offer longer terms or a loan with a low car down payment or no down payment.

PenFed Credit Union

If you’d prefer a credit union that has a membership pool that includes civilians from certain organizations, you may want to consider Pentagon Federal Credit Union, or PenFed.

PenFed’s starting auto loan rates are low, but you’ll likely need excellent credit to qualify. And if you purchase a vehicle through the PenFed car buying service, your rate could be even lower. With these competitive annual percentage rates, you could save thousands when compared with a traditional lender.


USAA only serves military members, veterans and their families. This focus has allowed them to become well versed in how to best serve military members, and it’s reflected in their above-average customer satisfaction rating.

USAA offers longer terms of up to 84 months, flexible payment options and they allow you to take your car with you if you’re deployed overseas. They also offer lease buyouts and refinancing of both USAA loans and non-USAA loans. You can easily start the application process online. Plus, they don’t charge you an application fee or a prepayment penalty.

Auto discounts for military members

Certain manufacturers may offer discounts on new cars to military members. As you start shopping for a car, you may want to take these into consideration.

  • Honda — Honda offers savings of $500 on the purchase or lease of certain new vehicles.
  • Volvo — If you’re serving overseas, Volvo has an amazing offer. Not only can you save thousands of dollars, you can also enjoy nice rewards. Through its program, you can drive your Volvo for up to five years in Europe and have it shipped to a Volvo dealership in the U.S. There’s also a worldwide warranty of four years or 50,000 miles, whichever comes first. If you anticipate moving your car to the U.S. at the end of your tour, then this could be a worthwhile option.
  • Dodge ­— Dodge offers a military and veterans discount of up to $500 in bonus cash on select models. You can apply this to a lease or a purchase.

Keep in mind that offers may change without notice. Take the time to find a car that suits you and then check into the discounts offered. Your military status could help you land a deal.

Special auto perks for military members

Military car loans may offer you better terms and rates compared to other car loans. But even though a military car loan may come with deals or additional benefits, it’s still a loan and the same risks apply. Make sure you can afford your loan payments — defaulting on your loan can hurt your credit score.

You may be able to break your auto lease

When you are deployed or have a permanent change of station, the Servicemembers Civil Relief Act protects you if you need to break your auto lease.

Although you’ll need to fill out some paperwork, it’s better than paying for a car that you are unable to drive.

Car insurance discounts

The car itself is not the only expense you’ll need to consider. Car insurance costs can add up quickly. As a member of the military, you may have access to discounts.

Many insurance companies offer a discount to active-duty military members. Companies that cater to military members and their families include USAA and Geico.

What’s next?

Your service may help you qualify for special auto offers that are designed to help ease the financial burden of owning a car. Start by checking rates at your military credit union and look for specific manufacturer offers that may apply to you.

About the author: Sarah Sharkey is a personal finance writer who enjoys helping people make better financial decisions. She especially loves to help young people learn how to set up their finances for a better future through her blog, … Read more.