Are there any resources to assist an AD Army soldier to get a car loan?

SPC Private RallyPoint Member — Sat, 12 Sep 2020 15:15:39 -0400

I have always paid cash for my vehicles. I am having to take a loan out for the first time, and I was just curious if there are any resources at my disposal that I may be unaware of.

Response by SGM Bill Frazer made Sep 12 at 2020 3:20 PM

SGM Bill Frazer — Sat, 12 Sep 2020 15:20:42 -0400

Check military credit unions, USAA for better financing.

Response by CW2 Private RallyPoint Member made Sep 12 at 2020 3:33 PM

CW2 Private RallyPoint Member — Sat, 12 Sep 2020 15:33:57 -0400

ACS usually has a "consumer affairs" person who can help go over your loan docs to make sure you aren't getting screwed.
Use a credit union. USAA is awesome for banking but very stingy with APRs for loans

Response by CPT Private RallyPoint Member made Sep 12 at 2020 4:09 PM

CPT Private RallyPoint Member — Sat, 12 Sep 2020 16:09:29 -0400

I would say that you are already on the right path with buying your cars cash but I would look at USAA. The only reason I plug them is that their suite of services are beyond awesome. But I will say that Navy Fed will usually bet them on an APR. Most important you need to make your budget with your retirement contribution and then find how much disposable income you have. Banks will also lend you as much a possible when you are in the military because they know they will get it back.

Response by CPT Private RallyPoint Member made Sep 12 at 2020 9:06 PM

CPT Private RallyPoint Member — Sat, 12 Sep 2020 21:06:36 -0400

Secure your financing through yourself or your bank before you walk into a dealer. Discuss the price of the CAR ONLY with the dealer, not any part of financing through the dealer. Do not make the financing a part of the price of the car. This hides the price of both the car, and the financing.

If you walk into the dealership with cash in hand the price he gives you should be the same as if you secured a pre approved loan via your independent bank.

If a 0% financing deal price of the car is higher than the cash price deal of the car then there is a hidden financing cost you are paying for anyway.

I build the excel model to break out the intrinsic hidden financing costs, but the easiest way to explain is don't get financing through the dealer. Whatever words are coming out of their mouth at the end of the day the prevailing auto loan lending rates apply the same everywhere.

So the only way to know the price of the car you are buying is to exclude mixing the loan and car costs together and being gamed with a lower monthly payment with a longer pay off period.

*****
Before the army, I was a financial analyst with a credit union, and we supplied lenders with financing for their customers. That's where I learned the fine details of the game. Our worst loans in our auto lending portfolio were always loans given through dealers and not out current customer base.

So while the dealer would finance you a car, they would turn around and then sell us the loan so they could have funds to lend for another car. So in between the dealer, and the credit union was their cut when to you the consumer don't see the actual additional cost of your deal.

Just don't finance through the dealer.
1) If the financing is in the price of the car if you pay the loan off early you still pay the interest that would have been paid in the future.
2) While it might seem you pay a higher rate from your bank you are seeing the actual cost of the financing that is not being hidden from you with dealer financing.
2a) In the event you pay the loan off early, it probably amortizes normally like a house loan. You pay the balance on what is owed for that car, and that's that. You stop paying interest.

Response by MAJ Ken Landgren made Sep 14 at 2020 4:44 PM

MAJ Ken Landgren — Mon, 14 Sep 2020 16:44:24 -0400

Call USAA.

Response by MSG Ron Bacak made Sep 15 at 2020 9:50 PM

MSG Ron Bacak — Tue, 15 Sep 2020 21:50:22 -0400

PENFED has always been great for me, use them six times over 22 1/2 years