Tips for Military Car Loans

Military car loans offer a sensible alternative to traditional loans for military personnel looking to purchase a new or used car. Provided you are a current member of the armed forces, there are loan programs which take many factors into consideration including poor credit due to constant moving or deployment. These can offer you substantial incentives such as 100% financing, low interest rates and charge no prepayment penalty. Finding low-rate car loans that are available to you is not difficult, but you should be aware of a few things before you sign on the dotted line so you don't end up over your head. Most lenders to military personnel are honest and wish to provide a good service, but as with anything, there are unscrupulous people out there. These are a few tips to give you some ideas of what to expect and what to watch out for.

Most lease contracts have a clause that forbids the leased vehicle be taken out of state or overseas, a problem for military personnel. Frequent stationing changes or deployments preclude staying in one state, so despite what a dealer or lender may say, make sure you confirm in writing from the dealer that you can take your leased vehicle out of state or to a foreign base. Otherwise, don't sign the contract and keep shopping.

Despite what you may think or what the dealer may tell you, your final monthly payment is not the most important item to negotiate. Your concern should be the selling price-negotiate over that. If you bother squabbling over the monthly payment, they will lower it for you letting you believe that they are saving you money when really they are charging you more interest over a longer period of time. Negotiate the purchase price and the monthly payment will take care of itself.

Look to buy during the last two weeks of December during the Christmas rush when dealers are most desperate to move merchandise or during late summer/early autumn when models are changed and rebates and incentives are most likely to be offered. Also, keep watch for slackening market conditions that lead to lower prices.

Dealers will want to sell you a warranty for your new or used car, often for a price that is 5 to 7 times the price they paid for it. Avoid this by purchasing a warranty directly from a 3rd party distributor and save yourself as much as 40% of what a dealer would charge. Make sure, though, that the 3rd party insures your warranty in case their business folds.

Look for the asterisks ("*") and read what is next to them carefully. For instance, 1.8% APR* usually means only for customers with perfect credit.

If you have a trade-in, consider selling it privately before you purchase a new car. A dealer will try and purchase it from you for considerably less than its market value, realizing profit for them. Don't be fooled. Sell it privately for what it's worth and come out ahead.

When you take out a military loan for a new or used car, especially if it's through a dealership, know the ways in which they will try to charge you more for the car. These loans exist to help military personnel purchase vehicles, so the interest rates and repayment terms are more favorable, but you still need to be vigilant of sneaky finance tricks that get you to owe more than you have to. It is well worth your time to do a little research and learn some tricks of your own.