Guide to Auto Loans and Car Buying for Veterans
Special discounts can help make a new-car purchase more accessible to recently discharged veterans or active duty service members.
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Updated on August 19, 2025
QuickTakes:
Veterans and current military personnel face unique financial challenges, both during and after their service. According to Pew Research, 27% of veterans found readjusting to civilian life difficult. One such adjustment that veterans may find complicated is managing new financial responsibilities at home, such as purchasing a car.
With any big car purchase, it's ideal to research not only price points and purchasing assistance, but also variables such as your purchasing power, needs versus wants, how to find a reliable dealer, and how to account for intrinsic costs such as maintenance. Whether you have family support or balance your household budget solo, this guide can help provide you with valuable resources for saving for a car and managing an auto loan as a veteran.
Is There VA Assistance for Buying a Car?
There are currently no general Veterans Affairs (VA) programs centered around helping veterans purchase a new vehicle. However, there are specific programs that exist to cater to veterans facing extenuating circumstances. For example, the VA Automobile Allowance and Adaptive Equipment program assists anyone with a disability due to military service that hinders them from driving. This helps veterans with disabilities purchase vehicles that are adapted to their needs.
How to Pay for Your Car
Multiple factors go into the final price of a vehicle. These factors include the down payment, dealership fees, loan interest, and intrinsic costs. Unless you're purchasing a car in cash, knowing what you can afford for each of these factors can help you create a realistic budget when searching for your new vehicle.
Know What You Can Afford
Several considerations go into knowing how much car you can afford. For example, how are you planning on buying a car? If you intend to use financing options like auto loans, your budget can vary widely depending on things such as:
- Your credit score
- Outstanding debts
- Current income
- Your down payment
- The length of your loan
You can use tools like auto loan calculators to get an idea of how much you could borrow or afford.
If you're planning to buy a car with cash, then there are other factors to consider when it comes to making a budget. One of the pros of buying a car outright is that you won't have any monthly automotive loan payments.
It's important to make a budget before looking at cars, so that you have a realistic idea of the kind of car you can afford, and you lower the risk of over borrowing for unnecessary luxury add-ons.
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Leasing vs. Buying
Leasing a car gets you a new vehicle without committing to buying it. This can be a popular option for active duty service members who change stations every couple of years. When you lease a car, you're essentially renting it from the dealer. While insuring a leased car may be more expensive due to the amount of coverage you could need, you won't have to pay interest on a loan. This could offer more financial flexibility while you're deployed. Another pro of leasing a car is that you may be able to upgrade to luxury models, particularly if you're leasing for a short time.
However, it's important to note that if you get in an accident while leasing a car, the repairs, either to your vehicle or other vehicles involved, may not be covered by the insurance carrier, and you will owe the dealer if the car is totaled. This is where things like gap insurance come in handy when leasing a car. In the long run, if you're planning to own a car for several years, leasing may be the more expensive option.
Understand Refinancing
Refinancing a car loan is another way to lower your overall monthly payments while keeping your loan in good standing. When you refinance a loan, you may be offered a lower interest rate. Refinancing may also allow you to reassess the length of your loan term. Adjusting your interest rate or term can lead to a lower monthly payment, savings over the life of your loan, or paying off your loan faster. Reading the terms of a refinancing agreement is crucial to ensure you're aware of how it may impact the total amount you will pay over the life of your loan.
When considering if you should refinance your auto loan, ask yourself the following questions:
- What are the lifetime savings if I refinance?
- Do I have a high enough credit score to get favorable terms?
- Do I need to refinance immediately, or can I wait for more favorable circumstances?
It's important to note that refinancing is essentially replacing your current auto loan with a new one that comes with new terms. These terms are influenced by several factors, including your credit score and the prevailing interest rates in the market. This means even if your credit score remains constant, a decline in overall market rates could still open the door to a more favorable interest rate on your car loan and is worth exploring.
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Auto Loans With Discounts or Special Rates for Veterans
Certain lenders offer special discounts or rates for veterans who borrow from them. While this isn't necessarily common practice, you may find a better rate as a veteran by shopping around for the right lender. Here are some lenders that offer these rates:
It should be noted that these special rates are typically offered only to honorably discharged veterans, and that you may need to provide proof of this status to qualify for them.
Dealerships and Manufacturers With Discounts for Veterans
Certain car dealerships or manufacturers will offer discounts on the base price of the vehicle for veterans. Or, they may discount or waive certain fees associated with purchasing a new car. Manufacturers that offer these deals include:
| | | | | | |
If you cannot find these dealerships near you, you can check to see if a local seller of these models offers similar discounts.
Breaking a Car Lease While in the Military
If you're an active duty service member who is deployed or relocated, the ServiceMembers Civil Relief Act (SCRA) allows you to cancel your lease without paying any early termination fees. This applies as long as the service member (or their dependents) has only used the vehicle for personal or business transportation. If you are a service member who has a spouse on active duty, you may still be eligible for the SCRA.
Some active duty service members using this resource prefer to lease their personal cars rather than purchase them outright, as you are still financially obligated to make any minimum loan payments you've agreed to while deployed.
Other Costs of Car Ownership
The price of the car through the cost of your monthly payments isn't the only recurring car payment you'll have. Regardless of whether you buy a new car or used car and purchase it through financing or with cash, these costs will be included during the lifetime of the car.
Insurance
Insurance is an intrinsic cost of car ownership that is required in many states. However, some 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. Military-specific insurance plans take the unique challenges and lifestyles of active duty service members and veterans into account when creating coverage. Insurance companies that offer veteran-specific discounts or plans include:
(Military Away)
If you currently have car insurance with a company not on this list, you could consider asking if they offer a veterans discount — some companies do offer such discounts but don't officially list them on their discounts page.
Fuel and Maintenance
Fuel and maintenance are also intrinsic costs of owning a vehicle. That said, you may be able to lower these costs depending on the type of vehicle you buy. For example, buying an electric or hybrid vehicle can help cut down or eliminate fuel costs.
Some automotive companies may offer veteran-specific discounts on services or parts.
For example:
(10%) (10%) (10%) (5% to 20%)
You may be able to find these discounts online or you can ask at the time of car service. If you have auto-mechanic experience as a veteran, it may be cheaper to perform your own vehicle maintenance.
Registration
Typically, you have to pay a fee to register your vehicle. If you're being relocated due to a permanent change of station (PCS) order, though, your registration fees may be waived. This varies from state to state — in some states, there is no requirement to register your vehicle with the local department of motor vehicles or similar, as long as your registration is valid in your home state.
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 and other necessary paperwork.
Other Programs to Help Veterans Afford a Car
Other programs that can help veterans and their families afford a car, through various financing and special offers, include:
: 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. : 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 in 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 is a 501(c) nonprofit that donates vehicles and provides financial support to disabled veterans. They accept and donate several kinds of vehicles, including cars, boats, RVs, and motorcycles. : There are several grants available for veterans looking to purchase a vehicle. These grants can help reduce the financial load of a new-vehicle purchase. Get Government Grants has a list of grants veterans can apply to.
Written by humans.
Edited by humans.
Capital OneBanking should leave you with the same great feeling you get when you drive casually on a weekend afternoon. And that’s how I feel when writing helpful tips and reviews – passionate about cars and passionate about financing and everything in between when buying a new ride.
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