Can Non-Military Individuals Get A USAA Auto Loan?

In this article

If you don’t have a connection to the military, you may think you don’t qualify for a USAA auto loan through the organization. In your search for an auto loan with low rates and favorable terms, you may have come across information from the USAA, or United Services Automobile Association. The nearly 100-year-old company exists primarily to provide financial services to people who have served in the Armed Forces or their family members.

Can You Become a USAA Member Without any Military Service?

The USAA advertises as being for active-duty military members and their families. You can be:

  • An active military member in the U.S. Air Force, Army, Coast Guard, Marines, Navy National Guard or Reserves.
  • A veteran with an honorable discharge from the military.
  • A cadet or midshipmen at a U.S. service academy or related prep schools. ROTC members and scholarship holders also qualify.
  • An eligible family member. Spouses and children of USAA members, even if they are no longer alive, are generally eligible for membership.

“Eligible family member” may sound like it is only for spouses and dependent children, but here’s where you may be able to qualify for membership. USAA membership can be extended to children and grandchildren, even if the service member is no longer alive. Was your grandpa in the service and did he get USAA membership for auto insurance or banking at any point in the past? You could be eligible. You need the details about the military member’s service, and you can check online through a form.

What Are the Benefits of a USAA Auto Loan?

The USAA offers car loans on new and used vehicles, as well as refinancing. They also offer a few benefits over traditional car and truck loans, including:

  • Great rates. You’ll need to have a good or excellent credit score, but with that high FICO number, you can qualify for better rates than might be available elsewhere. Signing up for automatic payments can drop the rate another 0.25%, and using the USAA car buying service could save up to an additional 0.5%.
  • Rate locks for up to 45 days. Most lenders will only guarantee rates for 30 days. With the longer time period, you can take your time looking for the ideal vehicle.
  • Deferred initial payments. Your repayments can start as long as 60 days after you sign for the loan.
  • Longer terms. Typical car loans are for 60-month or sometimes 72-month terms. You can get a loan for 84 months through USAA.
  • Additional vehicle protection. You can get more coverage on your car without a deductible.
  • Car buying service. Need help finding the right vehicle? You can use the USAA service and get a rate discount. Working with the vehicle marketplace TrueCar, USAA acts as a go-between with you and the dealerships who have the type of vehicle you want in stock. You can get several bids that include the features you want and a good price. You’ll also be able to use the service to see what other people are paying for specific vehicles, so you don’t overpay. Estimates are you could save as much as $3,500 by using the service.

If you are able to qualify for membership, USAA can save you money over applying for an auto loan with a traditional lender. They also offer good customer service and an easy, online application form.

Is There a Downside to Borrowing Through USAA?

The biggest issue most people have with USAA is not being able to qualify for membership. If you do qualify, there are a couple of things to consider.

First, you can’t have a co-signer for your USAA auto loan. You’ll need to qualify for the loan on your own financial merits. So if you think that might be tough, a USAA loan may not be a good option for you.

Second, people without good credit may not receive approval for a loan or may end up paying higher interest rates. Without an excellent or good FICO score (above 670), you may not be able to qualify for the loan terms you want.

Finally, USAA does not offer pre-qualification. Once you apply for a loan, you’ll get a hard inquiry on your credit report, which could impact your credit score. Make sure you’re ready to apply before starting the process.

Getting an Auto Loan Through USAA

Even if you’re not an active military member or a veteran, you may be able to qualify for membership in the USAA, a financial services company that offers excellent auto loan terms and rates. Find out if a parent or grandparent has been a member, and you may be eligible for a USAA auto loan. The application process is online, fast, and easy, should you be able to prove a connection to the military and USAA that allows you to join. You should receive a decision within a few hours up to a couple of business days.

You may also like

Best Auto Loan Rates of 2020

The best auto loan rates of 2020 to drive away with. Our guide will help you make the right decision so you can choose a car loan that fits your needs.