Car loans for veterans: Resources for financing your next car

Written by: Sarah Sharkey
• Updated •5 min read
This date may not reflect recent changes in individual terms.
Woman smiling and leaning out of the driver side of a car she purchased with a veteran car loanImage: Woman smiling and leaning out of the driver side of a car she purchased with a veteran car loan

In a Nutshell

If you’re a military veteran ready for a new car, you may want to look for financing from a lender that caters to military members and their families. Although there is no such thing as a “veteran auto loan,” some carmakers offer military discounts and rebates that may help reduce the purchase price of your next vehicle.
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

As a veteran, you may have access to credit union auto loans for former military members that could make car buying more affordable.

After active duty, readjusting to civilian life can be a challenge. Not only do you need to adapt to a new lifestyle, but you may also have to shoulder new financial pressures. You may be able to get some help with at least one big purchase — a car.

Here are some things to know about financing your car as a veteran.

Can I get a VA loan for a car?

While the Department of Veterans Affairs offers home loan assistance, it doesn’t offer car loans for veterans.

Under some circumstances, however, VA can help with a vehicle purchase. If you suffered a disability while on active duty that interferes with your ability to drive, you may be eligible for an auto benefit.

Known as the automobile allowance and adaptive equipment benefit, this is a one-time payment of up to $21,488 paid out to veterans with qualifying injuries.

If you qualify, you can use this money to buy a vehicle that is adapted to your needs. For example, if your active-duty injury means you must drive a vehicle equipped with power steering or specialized brakes, you may want to apply for the benefit.

To check your eligibility, you need to file a claim for disability compensation and get VA approval before you purchase either a vehicle or adaptive equipment.

It’s a good idea to contact VA directly to get the program’s most up-to-date rules and guidelines. Check its benefits and services here.

Auto loans with discounts or special rates for veterans

If a VA benefit isn’t an option, you may have access to auto loan offers from credit unions. Credit unions are nonprofit businesses, meaning that rather than being profit-driven, they aim to focus on member services. Opting for a credit union — which you may be able to join if you meet certain requirements — could help you save some money. Some credit unions cater specifically to military personnel and may offer better loan options than some traditional lenders.

Credit union offers may vary widely, though, so it’s good to do some research.

Here are some options.

PenFed Credit Union

PenFed, or Pentagon Federal, caters to military personnel as well as civilians who are members of certain associations.

Although you will need to make a $5 initial deposit in a savings account to join, PenFed could give you access to attractive loan terms through its car-buying service.

Navy Federal Credit Union

If you’re an Army, Marine Corps, Navy, Air Force, Coast Guard or Air National Guard member — or if you’re a retired service member or veteran — you may want to consider a Navy Federal Credit Union auto loan. NFCU membership is also available to certain civilians, including some government employees.

As an NFCU member, you may qualify for competitive auto loans if you’re looking for a new or used vehicle. And if you opt for direct deposit, you may qualify for an additional 0.25% interest rate discount. Check with NFCU directly to learn whether you qualify.

Although NFCU offers financing for new or used cars as well as motorcycles and other vehicles, it doesn’t offer loans for used cars from private sellers or for lease buyouts.

USAA

As a former military service member, you could be eligible for USAA membership.

The nearly century-old military bank offers its members competitive interest rates for new and used cars.

If you apply for a loan and are approved, USAA offers a “rate lock” option for your auto loan. This allows you to take up to 45 days to decide whether you want to go through with the loan.

How veterans can save money when buying a car

In addition to auto loan options from military credit unions, you may also have access to manufacturer-based discounts as a veteran.

Check out military offers

Some car dealerships and manufacturers may offer military discounts and rebates for veterans. As you shop for your vehicle, here are a few to start your search.

  • Ford offers veterans a $500 cash bonus on eligible purchases or leases of new Ford vehicles. But it honors this deal for only 24 months after you complete your service.
  • General Motors offers a special discount below the manufacturer’s suggested retail price on the purchase or lease of eligible vehicles, which could save you thousands. You’ll need to create an account to confirm your eligibility and receive an authorization number.
  • Acura offers veterans a $750 credit to use on select vehicles within two years of your completion of active service.
  • Jeep offers veterans $500 of bonus cash on select vehicles. You’ll need to purchase the vehicle within 12 months of your discharge date.

Keep in mind that this is just a select representation of car manufacturers that offer a veteran discount. Check with your preferred brand for similar offers.

Ask for a discount

If your dealership doesn’t advertise a veteran discount, that doesn’t mean there isn’t one.

Come prepared with your military ID and ask what your options are. A car dealer might be willing to consider a discount for you.

Even a small APR allowance could save you a significant amount of money. For example, if you borrow $20,000 for a term of five years with an APR of 5%, you will pay $22,620 over the course of the loan. However, if you borrow $20,000 at 3% for the same term, you will pay only $21,540 over the course of the loan. As you can see, a small drop in APR can make a big difference in your wallet.

Other costs of car ownership

Beside getting a car, you’ll want to consider other costs associated with car ownership. Purchasing auto insurance, for example, can significantly affect your monthly payment.

Call your insurance provider to verify whether it offers veteran pricing, and check with providers like USAA, which serves military members and their families, for competitive rates.

Find out more about lowering your auto insurance rates here.

What’s next?

If you’re a veteran and ready to buy a car or need special equipment to help you drive, you have options. These may include enlisting VA help, comparing military-specific pricing from car manufacturers and getting financing from credit unions that cater to military members.

Keep in mind that your credit is one of the factors that lenders consider when determining whether you qualify for financing. If you’re struggling to find a loan option, you may need to focus on improving your credit health.

You can get started by paying down debt and diversifying your credit mix.

About the author: Sarah Sharkey is a personal finance writer who enjoys helping people make better financial decisions. She especially loves to help young people learn how to set up their finances for a better future through her blog, … Read more.