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USAA Auto Loans Review
Since USAA is a one-stop-shop for financial services for military members and their families, getting an auto loan with USAA is convenient for members who already bank with the lender or use its other services.
USAA enables you to lower your auto loans rates by up to 0.75% when signing up for automatic payments (saving 0.25%) and when purchasing a new or used car through the USAA Car Buying Service (saving 0.50%). According to USAA, members saved an average of $3,537 off MSRP on new vehicles purchased through the USAA Car Buying Service, which enables car buyers to compare prices with recent sales in their area.
*Rates accurate as of August 10, 2020
Things to consider
USAA restricts those who can get an auto loan to USAA members, their spouses and their children. Unless you or your immediate family member is a military member, you will not be eligible for USAA auto loans.
To get the lowest rates possible, you’ll have to set up automatic payments and purchase a car through the USAA Car Buying Service. These restrictions may not appeal to some borrowers, especially those who want to purchase a car through the seller of their choice.
Also, if you already have a USAA auto loan, you won’t be able to refinance it with USAA. USAA only allows refinancing auto loans from other lenders.
[Read: Best Auto Loan Rates of 2020]
USAA at a glance
| Lender | Loan Amount | APR | Terms | Key Benefit |
|---|---|---|---|---|
| USAA | $5,000–$50,000 | As low as 2.39% | 12–84 months | Borrowers can get extra discounts |
What you need to know
USAA provides auto loans so you can purchase a vehicle from a dealer, purchase a vehicle from an individual or refinance a non-USAA loan. As of June 2020, the lowest rates were offered for newer vehicles, with a collateral model year of 2019 to 2021. USAA auto loans ratings generally go up for collateral model years of 2013 to 2018, and they generally increase again for collateral model years of 2012 and older.
USAA auto loans rates APR start at as low as 2.59%. Borrowers can up to $3 million, with the minimum auto loan amount being $5,000. Loan terms range between 12 to 84 months.
There are no penalties for prepaying a loan. You won’t owe any payments for up to 60 days, which may help some borrowers. Borrowers also get the assurance that in the case of a natural disaster, USAA Bank offers payment deferment.
Here’s how to apply for a USAA auto loan:
- 1. First, you’ll need to become a USAA member.
- You’ll need to provide your date of birth, contact information, Social Security number and details about your or your family member’s military service. For non-U.S. citizens, you’ll also need a permanent resident card or passport.
- From there, USAA members can head to the USAA auto loans website to apply for an auto loan. It’s free to apply, and the loan offer is available for 45 days, which is a benefit since you’ll be able to use it to shop around, compare auto loan offerings and possibly lower your auto loan rate with another lender.
- After you e-sign your loan, you’ll receive a loan check that you can use to purchase your car.
Criteria and eligibility
USAA auto loans are available to USAA members, who must be U.S. military members or their spouses, as well as USAA members’ children. To become a USAA member, you’ll have to provide military experience documentation and personal identifying information (like Social Security number) to validate you or your family member is a military member and qualifies for USAA membership.
There aren’t restrictions on buying or refinancing used vehicles, but the older the vehicle is, the higher the rates tend to be. Also, when refinancing a used vehicle, USAA members can only refinance an auto loan that comes from a different lender.
[Related: How Much Car Can I Afford?]
USAA auto loans vs. the competition
Navy Federal
Navy Federal Credit Union, like USAA, serves members of all military branches. Navy Federal Credit Union offers rate options lower than USAA, at 1.79% APR for new or used auto loans and auto loan refinancing. You can also get a $200 bonus when you refinance an auto loan with Navy Federal Credit Union. When comparing Navy Federal Credit Union’s auto loan rates to USAA’s using USAA’s auto loan calculator, most Navy Federal Credit Union loan rates tend to be lower.
You’ll have to be a Navy Federal Credit Union member to apply for an auto loan. To become a Navy Federal Credit Union member, just like with USAA, you’ll have to provide proof of your or your family member’s military service. Department of Defense civilians and contractors may also be eligible for Navy Federal Credit Union membership, which makes Navy Federal Credit Union auto loans accessible to more qualifying members than USAA.
LightStream
The current auto loan APR rates offered by LightStream don’t beat USAA’s lowest offerings. To get the lowest LightStream APR of 2.49% w/AutoPay, you’d need to take out a loan amount of $10,000 to $24,999 for between 24 to 36 months.
LightStream offers auto loans for all types of applicants, not just military members. The unique value LightStream provides is its Rate Beat Program. You can bring the rate you’ve been approved for by a competing lender to LightStream, which will offer a rate .1% point lower than that rate. Since USAA auto loans are free to apply for, borrowers have nothing to lose by getting a rate from USAA then bringing it to LightStream for an even lower rate.
Too long, didn’t read?
If you’re a USAA member, you have nothing to lose by applying for an auto loan with the lender since it’s a free process. You’ll get a rate quote you can use to compare loan rates from other lenders. Borrowers will want to compare car prices through the USAA Car Buying Service as well to calculate overall savings.
We welcome your feedback on this article and would love to hear about your experience with the auto loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.
Keep Reading
Methodology
We’ve created the SimpleScore™ to help you objectively compare products and services here at The Simple Dollar.
Our editorial team:
- Identifies five factors to compare across each brand
- Determines the rating criteria for each factor
- Calculate an average of those five factor scores to get one SimpleScore™
We break down each of these five factors and their rating criteria for our review of the best auto loan companies of 2020.
Why do some brands have different SimpleScores™ on different pages?
Some brands like Bank of America, Wells Fargo, and Chase have different SimpleScores™ because they offer more than one financial solution — like auto loans, home loans, personal loans and banking.
For instance, in our Bank of America Mortgage Review, we give the company a 3.8 out 5 based on our five rating factors for mortgages. In our Bank of America Auto Loans Review, we give the company a 4.4 out of 5 based on our rating factors for auto loans. By tailoring our SimpleScore™ to each financial solution, we’re able to give you a more accurate view of their services and how they compare to competitors’ services.
Minimum new car rate
Companies that look out for new car buyers with lower rates receive higher scores from us.
Minimum used car rate
We also give higher ratings to companies that look out for used car buyers by offering lower rates.
Maximum loan size
Having enough money to cover your auto loan is important –– that’s why companies with higher maximum loan amount receive better scores from us.
Customer satisfaction
We use the J.D. Power 2019 Consumer Lending Satisfaction Study℠ to find out how customers rate their experience with each company. (If a company is not included in J.D. Power’s study, we skip this rating factor and average the remaining factor scores.)
Fees
Fees can add up very fast –– that’s why we give a higher score to companies who have fewer fees.
Reviewed by
Courtney Mihocik
EditorCourtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.
