USAA is a Texas-based diversified financial services company. Initially established as an auto insurance group for Army officers, the group now offers full-service investment, insurance, banking, and retirement products to more than 11 million members that serve, or served, in the United States military.
A Brief History of USAA
United Services Automobile Association was founded in Texas when 25 Army officers who couldn’t find an insurance agency that would insure their automobiles come together to insure each other’s vehicles. Since its inception in 1922, this Fortune 500 Financial Services Company has risen in profits each year. Toward the end of the 1960s, the group had more than 700,000 members. At the beginning of the 1970s, the company serviced five out of six active-duty officers, and it also opened USAA Federal Savings Bank. As of 2016, the institution had more than 27,000 employees serving over 11 million members.
As mentioned above, the company offers its members a broad range of financial products. Auto loans are one of many products that this institution offers its members. It offers its members three types of auto loans namely new car loans, refinances and used car loans. USAA members can access these types of loans at competitive rates (as low as 0.99%).
Requirements for USAA Auto Loans
- An applicant must be 18 years of age and a registered citizen.
- Like with all companies, USAA checks the credit history of the borrower. Fortunately, a borrower can get a good deal based on his/her credit history.
- USAA accepts people (and their families) who are in the armed forces.
How Does USAA Auto Loans Work?
Applicants can either apply online or call a USAA representative. Applying for a loan online is easy, and in most cases, borrowers will get a decision in just a few minutes. After a borrower has filled out and signed the application form, they can print their loan check and send it to their car dealer. Alternatively, they can send the check to their car dealer directly via the USAA’s Smartphone app.
- USAA accepts borrowers with all types of credit; however, the lowest rates are only available to borrowers with excellent credit (740+)
- Applicants get lower rates for loans on new cars (brand new to 2-year old vehicles), and vehicles bought via USAA’s car buying service.
What Are USAA Auto Loans’ Interest Rates?
USAA auto loans’ interest rates vary depending on different factors including the applicant’s credit profile, loan term, loan amount, and type of car. These rates are subject to change, but as of March 2016, USAA rates are:
-As low as 0.99% APR (1.49% APR without USAA’s Car Buying Service Discount) for loans on new vehicles with the USAA Car Buying Service Discount.
– As low as 2.75% APR for used cars. The lowest rate with the USAA Car Buying Service Discount is 2.25% APR.
– As low as 1.49% APR (2015 to 2017 cars) for refinances and as low as 2.75% APR for 2014 or older cars.
Note: The above rates are only accessible to applicants with excellent credit profile.
-Loan applicants with poor credit (lower than 640) can access loans with interest rates as low as 6.99% to 7.49% APR depending on the loan term.
– Loan applicants with fair credit (640 to 700) can access loans with interest rates as low as 4.59% to 5.99% APR.
– Loan applicants with good credit (700 to 740) can access loans with interest rates as low as 3.35% to 4.99% APR.
How Is USAA Better Than Other Lenders?
- They have an A + rating with the BBB and an A++ rating with A.M. Best.
- They have some of the lowest loan rates in the lending market.
- They consider all applicants with all credit types (from poor to excellent).
- There are no application costs, prepayment penalties or hidden costs.