USAA Auto Loans and Refinancing

Tylene Welch  | 

We’ve talked about how the United Services Automobile Association (USAA) is a private bank that serves current and former members of the military and their families. If you’re eligible to be a USAA member, you can enjoy benefits like top-notch banking services, investing and retirement savings assistance, affordable insurance options, and some of the best loan and refinancing rates available.

In this article, we will dive into the auto loan and refinancing option available to USAA members. We’ll explain how USAA auto loans work and what the application process looks like; including the credit score requirements and what to expect from loan rates. Then we’ll weigh the pros and cons of getting car loans through USAA compared to other lending options. If you’re in the market to get your first car, upgrade your older vehicle, or refinance your existing auto loan, be sure to explore your options with USAA first.

How USAA Auto Loans Work

USAA offers new car loans, used car loans, and refinancing options for its eligible members. All you have to do is go to the USAA car loans page to find rates, monthly payment calculators, and to get started with your loan application.

USAA recommends these eight steps to help you buy the car you want while remaining in your budget:

  1. Determine what you can afford.
  2. Consider the true cost of car ownership, including car insurance and maintenance.
  3. Keep an open mind when it comes to vehicle features.
  4. Research your market.
  5. Determine a fair asking price for the vehicle you want.
  6. Get your loan!
  7. Go for a test drive.
  8. Run a background check on the car.

You can apply for a USAA auto loan online or by calling a representative. The USAA online application process includes e-sign capabilities. If approved, you’ll be able to instantly print your loan check from home, or have the system automatically send it to your dealer. And that’s it!

USAA Auto Loan Rates

Let’s get to the nitty-gritty. Rate quotes are always subject to change, but you can find current rates on the USAA car loans page. Don’t forget to shop competitor rates, which you can do with a quick online search. Rates can change based on market conditions, so for the most up to date numbers you’ll have to visit USAA online or in person. Next, we’ll describe how car loan rates vary for different loan types: new cars, used cars, and auto loan refinancing.

USAA New Car Loan Rates

New car loan rates are lower than used and refinancing options, but the vehicle must be 2 years old or newer. Vehicles purchased through USAA’s car buying service can be eligible for even lower interest rates and term options are available up to 72 months.

USAA Used Car Loan Rates

Are you considering a used vehicle from a private seller? You can still get a used car loan for your purchase. If you look at the USAA car loans page or shop around for an auto loan from another lender, you might notice that new car interest loan rates are lower than rates available for used cars. This is common across most of your auto loan options and happens for a few reasons:

  1. A new car’s resale value is easier to predict than a used car. Meaning, if the lender had to repossess the vehicle, they have a better idea of how much they can resell a new car vs a used car for, so they increase the rate on used cars to make up for the unpredictable resale value.
  2. Lenders prefer to sell new cars. Automakers often also own new-car lenders, so they can cut better deals on new car interest rates and still make their profits.
  3. Buyers in the market for a new car often have better credit that buyers looking for a used car, or at least that’s how lenders think. A lower credit score leads lenders to believe you’re less reliable in paying back your loan, so better interest rates are harder to get.

You’ll notice the current rates with USAA are better for new car loans than used car loans, but as mentioned earlier, the rate you get depends on multiple factors (like your credit score).

USAA Auto Loan Refinancing Rates

Refinancing your car loan might be a good choice if you’re hoping to lower your current loan interest rate or if you’re struggling to make your monthly car payment. You might also want to consider refinancing your car loan if your credit score has significantly improved since you originally got your loan, because you could now qualify for a lower interest rate.

When you refinance an auto loan, you’re essentially paying off your current loan with a new one under new terms. The new loan can be with the same lender or a different lender than your original one. USAA refinance auto loan interest rates are comparable to new car loan interest rates and used car loan interest rates depending on the year of your vehicle. Keep in mind your approved rate depends on the factors mentioned previously, like your credit score.

Applying for a refinance auto loan through USAA can be easily done online and approved instantly. USAA offers other car financing benefits like:

  • No application fees
  • No hidden closing costs
  • Low monthly payments
  • No prepayment penalty
  • No payment for up to 60 days

But remember to shop around your interest rate options with other banks, credit unions, dealerships, and subprime loan companies.

USAA Auto Loan Credit Score Requirements

The loan interest rate you’re granted will vary depending on many factors, including the total loan amount, loan term, type of car, and your credit profile. An excellent credit score of 740 or above will help secure the best rates for you, but USAA considers borrowers with all types of credit. Your approval rate will be heavily influenced by your credit history.

Pros and Cons of Getting Car Loans Through USAA

You will find that almost any lender has both good and bad reviews out on the internet, including USAA. That comes with the territory. But mixed reviews make it really hard for you to decide what lender is going to be best for them. Now, we’ll summarize what some previous borrowers have said about getting car loans through USAA.

On one hand, USAA has a very good reputation with its members, earning an A+ rating with the Better Business Bureau. It’s also known that while you should shop available rates, USAA often has the best offer. You can easily apply online, add vehicle protection coverage, and enjoy special rates with no hidden fees. Sounds perfect, right? But nothing is perfect.

The greatest drawback to USAA auto loans is the fact that you must be an eligible member of the association, meaning you must be a current or former member of the military or have a direct familial connection to the military. So, if you don’t have a close connection to the military, you may be forced to consider other options.

USAA auto loans are easy to get if you qualify as a member. However, to get the best interest rate on your auto loan (no matter the lender) you’ll want to ensure your own good credit standing.


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Tylene is a freelancer in Boise, Idaho. She's a self-taught personal finance hacker with zero debt. She eats avocado toast for breakfast.

This post was updated July 19, 2018. It was originally published June 18, 2018.