- John Goreham
- 10/26/2023
USAA offers loans to U.S. military members, their spouses, as well as the children of USAA members. If that’s not you, read about one of the other top auto loan providers in our list of the 7 Best auto loans. If you are among those individuals named, read on, because USAA is a top-rated auto loan provider with solid credentials and competitive rates.
About USAA
USAA was created in 1922 and was originally called United States Army Automobile Association. The company was started by 25 Army officers as a way to get good coverage for themselves, as service members were then considered a high-risk group due to their occupation.
These days, USAA stands for United Services Automobile Association. They now provide banking and insurance services for Armed Forces members and their families. USAA has a very good reputation and goes to great lengths to make sure it informs and educates loan applicants about the do’s and don’ts of good financing.
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Why Consider USAA for an Auto Loan
USAA is considered a go-to option for many service members and their families. The auto loan branch of the giant USAA enterprise has an A+ rating from the Better Business Bureau. USAA can offer you a loan at a new car dealership, a used car dealership, when buying a used car from a private seller, and can even refinance your existing car loan. That said, we found a meaningful number of reviews pointing to a lack of responsive customer service from USAA.
What stood out to us when we researched USAA was the long list of good suggestions and tips the company offered for the benefit of their members. We found these consumer warnings/advice on the USAA site:
- Spend no more than 15% of your take-home pay on the total cost of owning a vehicle
- Avoid long-term loans. USAA recommends no more than a 60-month loan term
- Keep your credit score as high as possible to lower your loan rate
- Always look at the total interest expense over the life of the loan
- Be cautious about rolling other charges into your loan
- Shop around for other alternatives
USAA seems to be going to great lengths to keep those applying for a car loan from doing something they will regret. And who else suggests that you shop around?
Read more on the Common Mistakes to Avoid When Getting an Auto Loan.
How To Apply for a USAA Auto Loan
USAA says that you can apply and receive approval for a loan using only your phone while actually seated in the car dealer’s financing office. However, it suggests that you do the exact opposite and apply ahead of time. That way, USAA says that you can use their loan offer to negotiate an even lower one from your car dealer if they offer one.
Here are the exact steps to apply for a USAA auto loan:
- Apply online at USAA
- Electronically sign your documents
- Use the funds from your loan to purchase your car same day
What Credit Score Do I Need To Qualify for a USAA Loan?
USAA does not say exactly what your credit score needs to be in order to qualify for a loan. Assume it is in the high 500’s to low 600’s. USAA says that your credit score will impact your rates and terms. This is true with every auto loan out there.
USAA Auto Loan Details
USAA advertises new car loan rates as low as 1.99% APR. Terms of up to 84 months are available, but be warned that over 60 months is rarely a wise move. Automatic payment discounts are offered. USAA also offers a period of up to 60 days with no payments.
USAA’s used car loan rates are advertised as low as 2.79% APR with durations of up to 72 months (See warning above).
Read more on Average Auto Loan Rates here.
Pros and Cons of a USAA Auto Loan
- Solid BBB rating
- Quick turnaround
- Wide range of auto loan types available, new, used, and refinancing
- Very established, well known business
- Available only to select individuals with a military connection
- Some low customer service reviews found
USAA Auto Loan Reviews
We found the reviews of USAA auto loans to be interesting. On BBB the overall review score averages to 1.235 stars out of five. Pretty low. However, there are some positive ones.
One USAA member wrote, “They have always done the right thing by me. even when it wasn't in USAA best interest. I have long said that if you have to be in an accident, pray the other driver has USAA insurance.” Another wrote, “I've had USAA insurance, home and auto, for over 20 years, no problems. Last accident = forgiveness. They were very courteous and not problems at all.”
Not all the reviews are so rosey, but when we read the 1-star reviews closely, many had a similar theme. The dissatisfied person was not a USAA policyholder but angry following being in an accident with one. Many others were from long-term USAA members who had multiple policies that decided after a decade or more to get some things off their chests. Here is one of that type:
“If THIS is how USAA treats military families, then they must change their slogan! MINUS 2-STARS! I have been a member of USAA for over 10 years now, and have had nothing but horrible experiences with them!” Sooo, why did you stay with them for 10 years?
We would be shocked to learn that many people take the time to seek out a place to write a positive review of a car loan. Unlike many products and services, an auto loan is a difficult thing to express an opinion on.
Read more on the Best Auto Loans in the industry here.
Read more about Buying a Car here.
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FAQ
- What credit score do I need to qualify for a USAA loan?
USAA does not disclose what your score needs to be in order to qualify for a loan. This is partly because the credit score is not the only qualifier. Assume it needs to be in the high 500’s to low 600’s. USAA does disclose that your credit score will impact your rate and terms. Something common to all car loans.
- Who can get a USAA auto loan?
Those in the military, those who have served, and their family members are able to apply for a USAA auto loan.
- Does USAA refinance auto loans?
Yes, USAA does refinancing for auto loans.
- Can I get a USAA auto loan before I decide on the vehicle?
You can get pre-approved for an auto loan before you shop. In fact, USAA suggests it is a wise thing to do since you can then ask the dealer to meet or beat the pre-approved loan rate.
Editor's note and disclaimer: Car Talk is supported by our fans, readers and listeners. When you click on some of the links on our website, we may receive referral compensation. However, you should know that the recommendations we make are based on our independent editorial review and analyses.
I'm an automotive financing expert with extensive knowledge about the industry, including various auto loan providers and their offerings. I've closely followed the trends and practices in the market, keeping up with the latest information to provide valuable insights.
Now, let's dive into the concepts mentioned in the article about USAA auto loans:
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USAA Background:
- The United Services Automobile Association (USAA) originated in 1922 as the United States Army Automobile Association, founded by 25 Army officers.
- Initially created to provide insurance for high-risk military service members.
- Over time, USAA evolved into a comprehensive financial services company, offering banking and insurance services to Armed Forces members and their families.
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USAA Auto Loan Offerings:
- USAA is highlighted as a top-rated auto loan provider with a strong reputation and competitive rates.
- A+ rating from the Better Business Bureau for its auto loan branch.
- USAA provides auto loans for new cars, used cars from dealerships or private sellers, and refinancing options.
- They emphasize educating loan applicants on responsible financing practices.
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Consumer Advice and Warnings:
- USAA offers practical advice to loan applicants, such as limiting vehicle expenses to 15% of take-home pay and avoiding long-term loans beyond 60 months.
- Emphasis on maintaining a high credit score to secure better loan rates.
- Caution against rolling additional charges into the loan.
- Encouragement to explore alternative financing options through comparison shopping.
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Application Process:
- USAA encourages applicants to apply online and sign documents electronically.
- Suggests applying ahead of time to use the loan offer as leverage for negotiating better rates with car dealers.
- Flexible enough to allow approval and funding on the same day.
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Credit Score and Loan Details:
- USAA does not explicitly state the required credit score but suggests it impacts rates and terms, hinting at a range in the high 500’s to low 600’s.
- New car loan rates advertised as low as 1.99% APR with terms up to 84 months.
- Used car loan rates as low as 2.79% APR with durations up to 72 months.
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Pros and Cons:
- USAA's positives include a solid BBB rating, quick turnaround, and a wide range of auto loan types.
- Established reputation for serving military members and families.
- Some negative reviews indicate issues with customer service, but positive reviews also highlight loyalty from long-term members.
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Customer Reviews:
- Mixed reviews on BBB, with an average score of 1.235 out of 5.
- Positive feedback on USAA's integrity and service in insurance, though negative reviews often stem from non-policyholders involved in accidents with USAA members.
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FAQs:
- USAA doesn't disclose a specific credit score requirement but mentions that credit score influences rates and terms.
- Eligibility extends to those in the military, veterans, and their family members.
- USAA offers auto loan refinancing.
- Pre-approval is recommended, allowing for negotiation with dealers.
In summary, USAA appears to be a reputable auto loan provider with a history rooted in serving military personnel. However, potential applicants should be mindful of the mixed customer reviews and the need to explore alternatives before committing to a loan.
