Car Buying Tips for Our Friends in The Military
We created this special section of CarBuyingTips.com for our friends in the military who more often than not are scammed by businesses around military bases, particularly car dealers. Don't get me wrong, many car dealers will do good by you. Between you and me, we all know that many take advantage of the soldiers who work so hard to protect our freedom. My research with several friends in the military supports this and prompted me to add this section to the site.
The reason this occurs is that many military personnel tend to be young, 18-25, and they've never had any financial training where they could learn about credit and how to prevent building up too much debt. Maybe they are living on base with a spouse and kid and can barely keep up with the bills. Sometimes they build up a lot of debt. Sound familiar? Time to break the mold.
If you get a good dealer, no problem. If you get a bad one, that's where this site comes in. A soldier friend called me so I could listen in as a car salesman was quoting him "12% APR payments" which we calculated was really 25% APR! I told him to high tail it out of there. Tell every military person you know to read this site, which many military COs and instructors use to teach their soldiers. Please read all 7 chapters of the new car buying article when you are done here, you need all that information before you buy a car.
One officer emailed me this: "It is not unusual for a junior enlisted person to come to their officers after buying a used car at 20%+ interest and begging us for help in getting out of the situation. It is sometimes possible to convince a dealer that the service member will default on the payments due to deployments and that it's in their best interest to renegotiate the deal, but this doesn't always work. The best solution is for the service member to be informed before buying, and for this reason I recommend your site whenever possible."
We're going to teach you how to determine what dealers pay for cars and use that information to formulate an offer to the dealer which is fair to both parties, gives you a scam fee discount and still gives the dealer a fair profit. You should be confident and professional, not confrontational or adversarial when buying a car. Knowledge is your ammunition. Here is a typical email I get from military personnel and what they are seeing out there:
Make/Model: Ford F150 SuperCab 4x4 Styleside 6-1/2'-XLT
Feedback: Jeff, Thanks for the advice, I'm an active duty Marine, I checked with the local Ford dealer next to the base and he was $3,000.00 more, he said I wouldn't find a better price, we'll I got a better price through CarsDirect and forwarded him the confirmation from CarsDirect and haven't heard from him since, I'll never buy through a dealer again! I've told every Marine in my unit about your website. Thanks again Jeff for the information you've provided! Richard, Camp Lejune, NC
There Is No 3 Day "Buyer's Remorse" Law!
Contrary to popular belief, there is no 3 day buyers remorse law. Don't think that you can just return your car within 3 days if you have a change of heart.
Car Leasing and the Military
I don't recommend leasing for military personnel because there is always the threat that you'll get moved or shipped off somewhere. If this occurs you may have to break your lease contract.
If you are on Active Duty there are some exclusive benefits. You can get out of a lease if you:
- entered into it prior to joining the military
- are being deployed
- are undergoing an oversees Permanent Change of Station (PCS)
- are undergoing a PCS from a state outside of the continental US (Alaska, Hawaii) to the continental US
This is a right given to military members under the updated Service Member Civil Relief Act (SCRA), 50 USC App Sec 501-596. These changes also apply to you if you're renting an apartment as well. You can find a fact sheet on SCRA here: http://www.justice.gov/crt/spec_topics/military/scratext.pdf.
Even with this protection, leasing is a horrible idea for those of you in the military. Most people don't realize that almost all leases have clauses forbidding the vehicle to be registered out of state, much less overseas. So if you get transferred anywhere, you are screwed, you can't take the car which you don't own with you. Car dealers of course love leases and some will lie and tell you anything to get the sale done, telling you that you can take the car with you. Of course this is not true. Just buying a car instead does not guarantee that you can move it to another country as your lender might forbid it. So you need to verify in writing that your lender will allow you to take the vehicle with you.
Key Points to Getting a Great Deal
- Know your credit score
- Applying for a car loan and securing pre-approval before you go to the dealership
- Compare online loan rates to the dealer offer
- Knowing what the dealer paid for the car
- Offer a fair profit over dealer cost
- Avoid the needless extras in the finance office
This chapter is enough to give you some quick facts on car buying, but there is so much more that you need to know before venturing off, so please read our complete guides and happy car buying!