The Servicemember’s Guide to Car-Buying
What you need to know to navigate the auto-buying process as a servicemember.
Bottom Line Up Front
- Servicemembers have unique things to consider when buying a car, such as available discounts and purchasing overseas.
- Preparation and research can help overcome those challenges to make car buying faster and smoother.
- Navy Federal has resources to help servicemembers buy cars domestically and internationally.
Time to Read
August 11, 2022
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.
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 pre-approved 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 should not 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 will 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®,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. Plus, you won’t pay taxes on the purchase until your vehicle is registered in the U.S. 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, you can avoid the hassle with the help of the Navy Federal Overseas Military Auto Buying Program, powered by Military AutoSource2. Through the program, you can custom-order your vehicle or choose from a wide selection of in-stock options.
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.
- Create a new-car budget by examining your income and expenses, then determine how much you can put toward a car payment monthly.
- Check your credit score and history and look for any mistakes or areas of improvement to help you qualify for the best interest rates.
- Contact Navy Federal to discuss auto loan options and to find cars that meet your needs in the United States or overseas.
TrueCar operates the Navy Federal Car Buying Service. Navy Federal is not responsible for any offer, purchase, lease, or service provided by or through the Navy Federal Car Buying Service.↵
Navy Federal does not provide, and is not responsible for, the overall website content, security or privacy policies on any external third-party sites. The Navy Federal Credit Union privacy and security policies do not apply to the linked site. Please consult the site's policies for further information. Military AutoSource operates the Navy Federal Overseas Military Auto Buying Program. Navy Federal is not responsible for any offer, purchase or service provided by or through the Navy Federal Overseas Military Auto Buying Program.↵
This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.