Written by: Kristen Jowers, MS, and Nichole Huff, Ph.D., CFLE
Some purchases are considered “big ticket,” meaning they cost more than a single paycheck. Cars, furniture, and electronics are common examples. After a house and college education, a car is often the next largest purchase for many families.
Service providers play an important role in helping service members understand their options and make informed decisions when buying a car. According to the Consumer Financial Protection Bureau (2025a), service members often borrow more, put less down, pay higher Annual Percentage Rates (APRs), and take longer loan terms than the general population, making education around car buying especially timely.
With the average new car price exceeding $50,000 in 2025, shopping around is essential. Buyers must weigh new versus used cars and buying versus leasing. New cars come with warranties and customization options, but depreciate quickly. Used cars are cheaper upfront since much of the depreciation has already occurred, though they may require more repairs.
Below are ten tips to guide service members through the car-buying process:
1. Do The Math
The better deal depends on two things: how low the interest rate is and how long the loan term will be. Compare financing offers using an online calculator.
2. Do Some Research
Before visiting a dealer, check pricing online to compare prices. Try to find the dealer’s invoice price, or ideally, their true cost after incentives, so you know what is negotiable.
3. Check Reliability Ratings
Narrow your choices to the top 3–4 makes and models, and review reliability ratings. Resources like Consumer Reports provide annual data on the most and least reliable used cars. This step can help you avoid cars that may require frequent or costly repairs down the road.
4. Keep Transactions Separate
Negotiate each part of the transaction one at a time- the price of the car, the financing, and the trade-in value one at a time. When everything is lumped together, it’s easier for the dealer to hide extra costs. Settle on the purchase price first (and get it in writing), then discuss your trade-in, then financing.
5. Compare Dealer and Non-Dealer Options
Check the dealer’s trade-in offer and financing rate against other choices, such as selling your current car privately or getting a loan through a bank or credit union. You may save money by separating where you buy, sell, and finance.
6. Consider Buying a “New Used” Car
Look at 2- to 3-year-old cars. These late-model used cars often cost less than new ones because they’ve already gone through their biggest depreciation period. Check if the used car still has part of the original warranty or a dealer-issued warranty.
7. Negotiate
Negotiate everything – price, fees, and extras. Make sure you have everything agreed in writing before you sign the documents. Be prepared to walk away if something is not right.
8. Avoid Being “Upside Down”
Make a solid down payment and avoid long-term loans (over 5 years). Otherwise, the car may lose value faster than you pay down the loan, leaving you owing more than the car is worth.
9. Be Cautious With Private Sellers
Used cars sold by individuals are usually “as is.” Ask for maintenance records, take the car for a test drive, and consider paying a mechanic for an inspection.
10. Know Your Rights
Understand service member protections under the Servicemembers Civil Relief Act (SCRA), which caps interest rates on pre-service auto loans and may provide safeguards against vehicle repossession.
Car buying is rarely a simple transaction, and for service members, the decisions don’t end once the papers are signed. Deployment schedules, PCS moves, and OCONUS assignments may all affect how a vehicle is stored, transported, insured, or financed. These factors can add unexpected costs if they aren’t considered in advance.
Encouraging service members to plan ahead for duty-related moves, review their lender’s policies, and stay informed about their rights can help them avoid costly surprises. For more support, the Office of Military Compensation and Financial Readiness offers a helpful six-video Car Buying Basics series that walks through the process step-by-step.
References:
CFPB. (2025a). CFPB finds servicemembers pay more in auto lending market. https://www.consumerfinance.gov/about-us/newsroom/cfpb-finds-servicemembers-pay-more-in-auto-lending-market/
CFPB. (2025b). You have rights under the Servicemembers Civil Relief Act. https://www.consumerfinance.gov/consumer-tools/educator-tools/servicemembers/the-servicemembers-civil-relief-act-scra/
O’Neill, B. (2018 July 24). Buying a car tips for service members. OneOp.
Photo credit: TS Armin/ Adobe Stock
