If you are already a veteran or recently retired from active duty, buying a car may seem like a daunting task or out of reach. The good news is that it’s not only within reach but there are special incentives and auto loans for veterans buying a car.

A military veteran holding a flag.
A military veteran holding a flag.

There are several car loan options available exclusively to military members and veterans. These loans can come with lower interest rates, longer repayment terms, and other benefits that can help make car ownership more affordable.

Before you go to a car dealer it’s important to understand the basics. Even though you’re a veteran you will still need to meet certain eligibility requirements. There are also different types of car loans to choose from.

This guide on veteran car loans will help you learn everything you need to know about financing a new car as a veteran or recently retired active duty member. We cover requirements, types of loans available, the loan process and even the paperwork you’ll have to do.

Key Takeaways

  • Veterans have access to several car loan options with benefits such as lower interest rates and longer repayment terms.
  • Eligibility requirements for car loans for veterans include having a good credit score and a steady source of income.
  • Understanding the loan application process and choosing the right lender are important steps to take when securing a car loan as a veteran.

Veterans Have Options for Auto Financing

Get connected with a car dealer near you that specializes in helping veterans get in their next car.

Understanding Car Loans for Veterans

If you’re a veteran looking to buy a car, you’ll likely need to borrow money to do so. Car loans for veterans are similar to other types of auto loans, but there are a few key differences to keep in mind.

When you take out a car loan, you’re borrowing money to purchase a vehicle. You’ll then pay back that money over time, usually with interest. The interest rate you receive will depend on a variety of factors, including your credit score, the length of the loan, and the type of vehicle you’re buying.

As a veteran, you have several options for obtaining a car loan. The U.S. Department of Veterans Affairs (VA) does not directly offer auto loans, but they do offer the automobile allowance and adaptive equipment benefit, which can help veterans and active duty service members with purchasing a vehicle.

You can also obtain a car loan through a private lender, such as a bank or credit union. Many lenders have special programs or discounts for veterans, so be sure to ask about these options when shopping around for a loan.

When applying for a car loan, it’s important to understand the terms of the loan. This includes the interest rate, the length of the loan, and any fees associated with the loan. You’ll also want to make sure you can afford the monthly payments, as failing to make payments can result in repossession of the vehicle.

Before applying for a car loan, it’s a good idea to check your credit score and review your credit report. This can help you identify any errors or issues that may be affecting your credit, and can also help you determine what interest rate you’re likely to receive.

Eligibility for Unique Benefits Through the VA

If you are a veteran or an active-duty military member, you may be eligible for a car loan with certain benefits and terms. However, there are specific requirements you must meet to qualify for a car loan as a veteran or active-duty military member.

Service-Connected Disabilities and Adaptive Equipment

If you have a service-connected disability that affects your mobility, you may be eligible for a VA car loan benefit. The disability must be related to your military service and may include loss of use of one or both hands or feet, burn injury, amyotrophic lateral sclerosis (ALS), or ankylosis (stiffening of the joints).

Additionally, if you require adaptive equipment to operate a vehicle due to a service-connected disability, the VA may provide financial assistance to help you purchase the necessary equipment. This assistance is available through the VA Automobile and Special Adaptive Equipment Grants program.

Active Duty and Deployment

If you are an active-duty military member and have been deployed overseas, you may still be eligible for a car loan. However, lenders may require additional documentation and proof of income to ensure that you have a stable income and are able to make your car loan payments.

It’s important to note that if you are deployed overseas, you may be eligible for additional benefits and protections under the Servicemembers Civil Relief Act (SCRA). These benefits may include a reduction in your interest rate, protection from repossession, and the ability to terminate a lease early without penalty.

This also may apply to veterans that are returning to active duty or called back for another tour.

Types of Car Loans for Veterans

As a veteran, you have the same options available to you that most car buyers have. The key difference is that veterans, or even active duty, may receive additional benefits or reduced rates with these traditional loan options.

The two ways a veteran can get auto financing is through a secured car loan or by refinancing a car loan they already have.

Secured (Traditional) Car Loan

A secured car loan is what most, if not all, of car buyers get. A secured car loan is a type of auto loan where the vehicle you are buying serves as collateral for the loan. This means that if you default on your loan, the lender can repossess the car to recover their money.

Secured car loans are available for both new and used cars, and you can get them from banks, credit unions, and other lenders.


Refinancing your car loan means taking out a new loan to pay off your existing car loan. The new loan usually has better terms, such as a lower interest rate or a longer repayment period. Refinancing can help you save money in the long run by reducing your monthly payments or the total interest you pay over the life of the loan.

If you already have a car loan and want to reduce your monthly payments or save money on interest, you can consider refinancing your car loan. As a veteran, you can refinance your car loan with a lender that offers auto loan refinancing.

Auto Loan Interest Rates for Veterans

When it comes to buying a car, understanding the interest rate you’ll get is crucial to budgeting and protecting your finances. The interest rate will determine how much you pay in addition to the principal amount borrowed. In layman’s terms, it’s the cost of borrowing money.

How Credit Score Affects Interest Rates

Your credit score is a measure of your creditworthiness, and lenders use it to determine how risky it is to lend you money. If you have a high credit score, you’re more likely to get a lower interest rate, which means you’ll pay less in interest over the life of the loan. On the other hand, if you have a low credit score, you may have to pay a higher interest rate, which means you’ll pay more in interest over time.

Special Interest Rates for Veterans

As a veteran, you may be eligible for special rates on car loans. Many lenders offer lower interest rates and more competitive rates to veterans as a way of thanking them for their service. Some lenders also offer special APRs for veterans. It’s important to shop around and compare rates from different lenders to find the best deal.

A few lenders that offer special (reduced) interest rates for veterans are:

  • USAA
  • PenFed Credit Union
  • Navy Federal Credit Union

These rates may not apply if you have been dishonorably discharged. You may need to provide proof of status to qualify for special interest rates. You should speak with the lender on requirements before applying.

Choosing the Right Lender

When it comes to choosing the right lender for your car loan, there are a few things to consider. Two main options you have are banks and credit unions. Here are some factors to consider before making your decision.

Banks vs Credit Unions

Banks are for-profit institutions that offer a wide range of financial products and services, including car loans. They are often convenient and have a large network of branches and ATMs. However, they may have higher interest rates and fees compared to credit unions.

Credit unions, on the other hand, are non-profit organizations that are owned by their members. They offer lower interest rates and fees, but their eligibility requirements may be more restrictive. To become a member of a credit union, you may need to meet certain criteria, such as being a member of the military or a family member of a current member.

Get Help Finding a Dealer & Lender

Get connected with a car dealer near you that specializes in helping veterans with multiple financing options.

Military Credit Unions

If you are a veteran or a member of the military, you may want to consider military credit unions. These institutions are specifically designed to serve the needs of military personnel and their families. They offer competitive rates and fees, as well as specialized services such as financial counseling and education.

Some popular military credit unions include Navy Federal Credit Union and PenFed Credit Union. Navy Federal Credit Union is the largest credit union in the country and offers a wide range of financial products and services, including car loans. PenFed Credit Union is another popular option that offers low rates and flexible terms.

When choosing a lender, it’s important to shop around and compare rates and fees. You may also want to consider factors such as customer service, online banking options, and repayment terms. By doing your research and choosing the right lender, you can get the best deal on your car loan and save money in the long run.

Loan Application Process

When applying for a car loan, there are several factors that lenders consider to determine your eligibility and the terms of the loan. Here are some of the key factors that you should be aware of when applying for a car loan as a veteran.

Credit Score and History

Your credit score and credit history are important factors that lenders consider when evaluating your application. A good credit score is typically 700 or higher, and a higher score can help you qualify for better terms and interest rates. If you have a low credit score, you may still be able to qualify for a loan, but you may need to pay a higher interest rate or provide a larger down payment.

Income and Debt-to-Income Ratio

Lenders also consider your income and debt-to-income ratio (DTI) when evaluating your application. Your DTI is the percentage of your monthly income that goes toward paying debts, including your car loan payment. A lower DTI indicates that you have more disposable income and are less likely to default on the loan. Typically, lenders prefer a DTI of 36% or lower.

Loan Term and Payments

The loan term and payments are also important factors to consider when applying for a car loan. The loan term is the length of time you have to repay the loan, and a longer term typically means lower monthly payments but higher overall interest charges. A shorter term means higher monthly payments but lower overall interest charges. You should choose a loan term that fits your budget and financial goals.

When calculating your loan payments, lenders consider the loan amount, interest rate, and loan term. A larger down payment can help lower your monthly payments and overall interest charges. Some lenders also offer one-time payment options, such as direct deposit, which can help you save money on interest charges.

Overall, applying for a car loan as a veteran can be a straightforward process if you understand the key factors that lenders consider. By maintaining a good credit score, managing your debt-to-income ratio, and choosing the right loan term and payments, you can increase your chances of getting approved for a car loan with favorable terms and rates.

Finding a Veteran Friendly Car Dealership

When it comes to buying a car as a veteran, you have a few options to consider. One of the most common ways to purchase a car is through a dealership or seller. Here are some things to keep in mind when choosing a dealership or seller:

Choosing a Car Dealership

Choosing the right dealership is important when it comes to buying a car. You want to find a dealership that is trustworthy, reliable, and offers a good selection of vehicles. Some popular car dealerships that you may want to consider include Ford, Acura, General Motors, and Jeep. These dealerships have a reputation for providing quality vehicles and excellent customer service.

Another option to consider is using a car buying service like TrueCar. TrueCar allows you to search for cars from a network of certified dealerships, ensuring that you get a fair price on your vehicle. This can be a great option if you want to avoid the hassle of negotiating with a dealership.

Understanding the Role of the Seller

When buying a car from a dealership or seller, it’s important to understand the role of the seller. The seller is responsible for providing you with information about the vehicle, including its history, condition, and any issues that may need to be addressed. They may also be responsible for helping you secure financing for your vehicle.

It’s important to do your research before working with a seller to ensure that they are reputable and trustworthy. Look for reviews and ratings online, and ask for references if possible. This will help you avoid working with a seller who may try to take advantage of you.

Additional Costs of Car Ownership (After Financing)

Before you secure auto financing and buy a car you’ll want to consider some of the other costs of owning and maintaining a car. It doesn’t matter if you’ve bought a new or used car, these costs will be unavoidable while you own the car.

Auto Insurance for Veterans

Many auto insurance companies offer veteran discounts or special rates, which can reduce the price of your premium. Sometimes, insurance companies offer specific plans tailored for veterans and active-duty service members — such as Geico’s military car insurance coverage. Other insurance companies that offer veteran-specific discounts or plans include:

  • USAA
  • Allstate
  • Farmers
  • American Family

Car Registration Fees for Veterans

Veterans don’t always get special treatment when registering their vehicle and normally will have to register their vehicle just like everyone else. However, if you’re being relocated due to a permanent change of station (PCS) order, then your registration fees may be waived.


If you still need to register your vehicle in a new state, you may be eligible for discounts, provided you can present your PCS order, or other necessary paperwork. You should speak with your local DMV or research your state’s regulations around veterans and car registration.

Additional Programs to Help Veterans Buy a Car

If you’re having trouble finding money for a down payment or securing financing through a more traditional lender, there are programs out there to help. Below you’ll find a list of programs set up to help veterans with financing and other special offers.

  • TrueCar Military Car Buying Program: The TrueCar military buying program offers financial assistance to veterans looking to purchase a car. You can view the type of assistance available, as well as the eligibility requirements of this program on their website.
  • Progressive’s Keys to Progress: The Keys to Progress program from Progressive is a vehicle giveaway event, designed to help veterans in need of vehicles. This event happens once a year, every November. You can find the application for this giveaway, as well as volunteer opportunities, locations to drop off donations, and more on their program page.
  • Vehicles for Veterans: Vehicles for Veterans is a 501(c) non-profit that donates vehicles and provides financial support to disabled veterans. They accept and donate several kinds of vehicles, including cars, boats, RVs, and motorcycles.
  • Vehicle Grants for Veterans: There are several grants available for veterans looking to purchase a vehicle. These grants can help lessen the financial load of a new vehicle purchase. Get Government Grants has a list of grants veterans can apply to.

Frequently Asked Questions

1. What are some of the best banks for car loans for veterans?

There are several banks that offer car loans specifically for veterans, including USAA, Navy Federal Credit Union, and PenFed Credit Union. These banks often offer competitive interest rates and flexible repayment terms.

2. How can I calculate my VA car loan?

To calculate your VA car loan, you can use an online loan calculator or contact a lender directly. You will need to provide information such as your credit score, income, and expenses. The lender will then determine how much you are eligible to borrow and what your monthly payments will be.

3. Are there any special car loan programs for disabled veterans?

Yes, there are special car loan programs available for disabled veterans through the VA. These programs can provide financial assistance for purchasing a vehicle, as well as adaptive equipment to make the vehicle more accessible.

4. Which auto loan providers offer the best rates for veterans?

Some of the best auto loan providers for veterans include USAA, Navy Federal Credit Union, and Capital One. These lenders often offer competitive interest rates and flexible repayment terms.

5. Do veterans receive lower interest rates on car loans?

Yes, veterans may be eligible for lower interest rates on car loans through certain lenders. Additionally, the VA offers a program that provides financial assistance for purchasing a vehicle, which may include lower interest rates.

6. Can VA benefits be used to purchase a car?

Yes, VA benefits can be used to purchase a car through the VA’s automobile allowance and adaptive equipment benefit. This program provides financial assistance for purchasing a vehicle, as well as adaptive equipment to make the vehicle more accessible for disabled veterans.