The Servicemember’s Guide to Car Buying

Auto dealers know that servicemembers aren’t like the average consumer. That can be a good thing, since knowledgeable dealers can accommodate for military discounts and overseas delivery when discussing a sale. At the same time, buying a car as a servicemember can come with risks—particularly for younger recruits who may be less experienced with finances. To help ensure that your car-buying experience is a positive one, try the following advice.

Weigh the Costs

Purchasing a car that’s new or in like-new condition can easily cost tens of thousands of dollars. That’s why it’s important to think critically and budget accordingly for such a big financial decision. Even if you’re living on base and don’t need to pay for housing or food, you probably don’t want to see your entire paycheck go toward car payments, insurance and gas. 

To come up with a car budget, determine how much money you’re currently spending and saving each month. Using the amount that’s left over, you can decide how much you want to spend per month on a vehicle. Our calculator can help you estimate how much you can afford to spend on a vehicle.

Finance Responsibly

Once you have a rough budget in mind, it’s time to check your credit. Your credit history and credit score tell lenders how financially trustworthy you are and can influence the terms of your auto loan. By looking up your credit ahead of time, you can check if there are any mistakes or if you need to improve your score. To see your credit history, get a copy of your credit report at annualcreditreport.com.

When you’re ready to apply, you should apply with a trusted lender for preapproval. A preapproved auto loan allows you to shop like a cash buyer, giving you the ability to negotiate price and not payments. Be aware that this is the maximum amount you’re preapproved to borrow. You shouldn't feel obligated to use the full preapproved amount. It will be better for your long-term finances if you spend more modestly on a car that fits your needs, but maybe not all your wants.

Choose a Car

New cars get all the advertising, and they do have some great benefits, such as promotional offers (including military discounts), the latest features and a great warranty. However, used vehicles drop in price at a much slower rate, and you'll usually pay a much lower price than the new-model equivalent.

Whichever route you choose to take, you’ll benefit financially (and emotionally) by doing your research. Learn the true values of cars you’re considering and compare their features using trusted online resources. If you’re shopping within the country, the Navy Federal Car Buying Service, powered by TrueCar®,^{Footnote 1} can help you find cars in your area.

Navigate Overseas Sales

Are you deployed at sea or stationed outside the United States? You may be able to take advantage of special military pricing on cars that aren’t available stateside. But use caution: You’ll either want to be sure the overseas dealer has experience with shipping vehicles to the United States, or you’ll need to be able to ship the car at the government’s expense. Your new ride also needs to meet American emission and crash standards to be used back home.

Fortunately, members stationed abroad can take advantage of our great loan rates and can enjoy military-focused service when purchasing through Military AutoSource.^{Footnote 2} Through their program, you can custom-order your vehicle or choose from a wide selection of in-stock options. However, be aware that some overseas dealerships may not accept preapproved auto loans, so be sure to check with your dealership before applying.

Negotiate and Purchase

If you purchase a car at almost any domestic dealership, you can expect to haggle for the best deal. In general, this means you need to state your price point and stick to it. You can always go elsewhere if your desired price can’t be met.

It’s at this point in the process that buying a car through an overseas military program can be a big money saver. The prices offered are already as low as they go—there’s no haggling involved. So, if you’re after the maximum savings you can get, it will come down to your choice in vehicle and your financing. 

Secure Your Financing

When you’re ready to apply for financing, Navy Federal Credit Union is here for you. We offer fast preapprovals and great rates. Learn how to apply and search for cars domestically and internationally.