Buying a Car in the Military

Start by thinking about how you’ll actually use the vehicle. Consider your commute, family size, storage needs, fuel costs and upcoming deployments, moves or other life changes.

Ask yourself:

• Do I actually need a car right now, or do I just want one? Consider whether alternatives such as public transportation or rideshare services could meet your needs before committing to a purchase.
• Is a car practical for my everyday needs? Choose a vehicle that fits your life. It should solve a real day-to-day problem, like commuting to work or family transportation.
• Can I afford the total cost of the car? Calculate what you’ll pay overall to buy and maintain the car — including monthly payments, insurance, gas, maintenance, registration and repairs.
• What will I do with the car if I’m deployed? If there’s a possibility you could be shipping out soon, consider other transportation options until you return so you can avoid unnecessary payments, storage costs or maintenance issues while you’re away.
• Am I prepared for the cost of relocating my car if I get PCS orders? Depending on your orders, it may be more cost-effective to wait and buy a car at your new location, especially if you’re headed OCONUS. This can help you avoid unnecessary shipping, storage or insurance costs. If you lease, check your agreement before an OCONUS move, as some leases may restrict taking the vehicle overseas.

Pro tip: On some installations, you may be able to buy a car from another service member who is moving away. Check local military resale lots, MWR resources or local military community boards.

Both new and used vehicles can be good options depending on your needs.

• Think about the overall value, not just price. A used car may cost less upfront and be easier on your budget, but it may come with frequent repairs, higher maintenance costs or fewer modern features. While a new car may offer the latest safety features, warranty and fewer repair concerns, it will likely cost more. Before buying a used car, consider having it inspected by an independent mechanic and check the vehicle’s title and history.
• Look beyond the sticker price. A lower monthly payment doesn’t always mean a better overall value. For example, new cars lose value quickly, so if you only plan to keep the car for a few years, a used car may help you get more for your money.
• Consider leasing a car. Leasing can be a good fit if you only need a car for a few years or want the option to switch vehicles before your next move. It may offer a lower monthly payment and access to a newer car, but you won’t own the vehicle and may have mileage limits, wear-and-tear fees or other charges. If military orders could affect your lease, review the agreement carefully and understand whether Servicemembers Civil Relief Act protections may apply to early termination.

Pro tip: No matter what you’re looking for, do your research. The Consumer Financial Protection Bureau offers guidance on leasing versus buying a new car.

Before you shop, calculate how much you can realistically afford.

• Build your plan around the full cost of ownership, not just your monthly loan payment. Consider things like maintenance and repairs, gas, insurance, registration, taxes and other ongoing costs. Keep in mind that insurance rates can vary by vehicle, so it’s a good idea to get a quote for the specific car you’re considering.
• Leave room in your budget for military life changes, like PCS, deployment, changes in your spouse’s employment, increasing insurance costs or added family expenses.

Pro tip: Making a major purchase like a car can feel easier when you have clarity about your budget. Visit our Budgeting and Saving Guide for tips and resources.

• Determine how much you can pay upfront. A larger down payment means borrowing less, which could help lower your monthly payment and total interest.
• If you already have a vehicle, consider a trade-in. Research your trade-in value before you visit the dealership, so you have a realistic starting point.
• Consider your financing options. If you’re not paying for the car in cash, you’ll need to get a loan and make monthly payments to pay it off. You can finance through a bank, a credit union or the dealership.
• Consider getting preapproved. A loan preapproval from a bank or credit union can help you understand how much you may qualify to borrow and give you an offer to compare with dealership financing.
• Look closely at your loan offers. There’s more to consider than what your monthly payment will be — your interest rate and loan term can affect how much you will pay overall. Longer loan terms, such as 72 or 84 months, may lower your monthly payment but can significantly increase the total interest you pay over the life of the loan. Compare your offers carefully and choose the one that makes sense for your situation.

The best way to show up at the dealership is prepared. Before you go, remember to:

• Focus on the total vehicle price, not just the monthly payment.
• Ask for the “out-the-door” price in writing to show the full cost of the vehicle, including taxes and fees.
• Set a target price.
• Compare prices at more than one dealership.
• Know which features you actually need (and what they cost).
• Look up your trade-in value.
• Review rebates, incentives and financing offers.

Keep in mind, car dealerships can be intimidating. Ask questions and stay focused so you can see past the sales pitch and decide what really makes sense for you.

When you’re at the dealership, make sure to:

• Bring a friend or family member for support.
• Keep your budget and target price written down.
• Take notes during your conversations.
• Ask for every number in writing.
• Avoid making a same-day decision just because you feel pressured.
• Keep coming back to the total price of the vehicle, especially as you discuss price and any financing add-ons.
• Check in throughout the process to ensure you understand each part of the deal and that the numbers still match.

Pro tip: Ask if any military discounts, rebates or special financing programs are available, and make sure you understand exactly how the offer works.

Negotiating can feel uncomfortable at times — remember that questions are an essential part of the process. Take your time and do not continue to pursue any deal that doesn’t feel right.

Use these negotiation tips to help you stay on track:

• Rely on your research and stay focused on the total price of the vehicle — do not let the conversation shift only to monthly payments.
• Remove add-ons you do not want, and remember that optional products rolled into your financing can increase both the amount you borrow and the interest you pay.
• Ask questions about fee or financing changes.
• Walk away if the terms change or the pressure increases.

Pro tip: Remember, most car sales associates work on commission. If you feel pressured to close a deal quickly, it’s OK to walk away or take more time to compare offers before making a decision.