How do we educate Soldiers about car financing?

2014-04-15T09:55:41-04:00

I am sure we have all seen it. A soldier shows up at the unit with a brand new car, the majority of them oblivious to the financial trouble they probably just put themselves in with 19% financing from fly by night crooked dealership finance managers.

Are units putting out policy to help fight this?
How can we educate our soldiers from making this mistake?

Ive seen this not just on cars and trucks, but on TV/computer/furniture purchasing as well.

An important note about my past. I worked at a dealership in Newport News, VA and was instructed very carefully over weeks of classroom training on how to take people for as much as we could get from them by playing razzle dazzle with numbers and papers and scripted speeches.

Response by SFC Private RallyPoint Member made Apr 15 at 2014 10:11 AM

2014-04-15T10:11:08-04:00

SGT Sullivan, you're right in that we've seen it a million times and we all know a soldier or two who fall pray to high-interest loans or the "pay-day" racket. As an organization we struggle to fully develop our young soldiers in an out of uniform (sometimes its a big enough challenge just getting them squared away in their MOS). Part of those "extra steps" that a good leader will take are to have these types of discussions with their young soldiers; impart your wisdom and educate them. For example, you've got the squad assembled during weapons cleaning after a range. That's a great opportunity to approach them and conduct some informal training on fiscal responsibility. Give them some real-world examples, tell them what you've seen and experienced. Pull out a white board and illustrate what 23% interest looks like on a credit card statement month after month and how much money they are throwing away.

I loathe to say "we need another briefing or powerpoint" so I won't, it's in one ear and out the other anyway. Take the lesson to the soldier.

Response by MSG Wade Huffman made Apr 15 at 2014 11:26 AM

2014-04-15T11:26:10-04:00

Good question. Unfortunately, with the exception of placing business 'off limits', there is little to be done to prevent service members from being taken for a ride (pun intended) other than attempting to educate them on financial health. This can be a very difficult thing to do with a lot of our younger members (and probably more than a few of the older ones as well). It is much like the advise to invest early... we all heard that when we were young.. and we all believed that we'd be just fine and have plenty of time.. (and we know how that works). Best you can do is offer advice, recommend they shop for loans through a Credit Union (very common for them to have the best available rates) or a local bank rather than financing through the dealer. In most cases, if the loan is more than they can realistically handle, those reputable establishments will advise them of that situation in a very professional manner and even assist them in establishing and meeting a financial goal of buying a new car.

Something about that 'new car smell' that makes many loose their fiscal sense!

Response by MSG Private RallyPoint Member made Apr 15 at 2014 12:25 PM

2014-04-15T12:25:42-04:00

I agree with SSG Taylor, but I would push it a step further. MANDATORY fiancial planning classes. Make the young soldiers do a one on one conversation with a fiancial planner such as military one source. A large portion of the problem is these young soldiers go from having no money to what they see as disposible income. And of course who doesn't want the Dodge Challanger with all the bells and whistles. If they are actually forced to sit there and have the hard discussion about money with someone that is an expert in it , it might go a little bit further.

I certianly wish someone had done that with me before I bought a house when I was 23 years old...it sure seemed like a good idea at the time and now 11 years later I'm finally done paying for that mistake. We offer a phone number for a financial planner but chances are unless we make the appointment and order them to go....they aren't going to do it!

Response by SSG Robert Burns made Apr 15 at 2014 2:13 PM

2014-04-15T14:13:49-04:00

Everywhere I have been this has been part of newcomer's orientation on post. They are usually very good.

Response by MSgt Keith Hebert made Apr 15 at 2014 3:01 PM

2014-04-15T15:01:07-04:00

Mandatory Dave Ramesy training

Response by PFC Glen King made Apr 15 at 2014 3:09 PM

2014-04-15T15:09:00-04:00

I have helped many people with purchasing a vehicle and always help the younger enlisted know what is going on throughout the process. Unfortunately, they may only qualify for a higher rate. This is based on past credit, lack of credit, and money down. The most a legit dealer can raise the rate is 3 points. So if they were given a 19% rate it is possible that the dealer only got a 19% rate or they are making back end money by jacking up the buy rate of say, 16% to 19% to make more money. I hate seeing PV1-3 coming in to purchase a vehicle because of the lack of income and job time. It usually leads to a higher rate and payment. If anyone has any questions at all I am always around to help out. I've been in the car business for over 12 years. RLTW!

Response by CW2 Joseph Evans made Apr 15 at 2014 3:45 PM

2014-04-15T15:45:27-04:00

Start with BSEP so they actually understand the math...