Can You Get a VA Loan for a Car?

Can You Get a VA Loan for a Car?

While you consider your options for a new vehicle, you may wonder whether the US Department of Veterans Affairs offers a VA loan for car. The VA provides financial assistance for life insurance, health care, and education. In addition to this, the department also has a VA home loan program that can help veterans purchase a new home without a downpayment.

But, when it comes to getting a veteran car loan, the VA currently does not provide VA auto loans to service members and families.

Luckily, there are plenty of other options available to veterans looking for a car loan.

Does the VA Offer Auto Loans?

Unfortunately, no. The VA currently does not provide car loans for veterans.

However, service members are not left entirely in the cold. Several credit unions and military banks are willing to offer the best interest rates and reasonable online quotes for veteran auto loans. Besides this, the VA also provides several other benefits like the VA automobile allowance and VA adaptive equipment grant to help veterans suffering from severe disabilities purchase a car or upgrade their vehicle.

Under these benefits, qualifying veterans can receive a lump sum payment of up to $20,577.18 to help purchase a car that fits their needs once in their lifetime. To apply for these benefits, you must file for a VA disability compensation claim and receive the approval of the VA for adaptive grants and auto allowances.

VA Loan for Car: Discounts and Rates for Veterans

As stated above, you can become a member of a credit union or military-friendly/military banks to get exclusive discounts and competitive rates.

Credit unions are not-for-profit organizations that distribute the profits amongst the organization members in the form of perks like lower interest rates. While you’ll find loan options at any bank or credit union, there are also banks and credit unions exclusively serving military members and veterans.

Besides this option, you can also opt for car dealership financing or an indirect loan from the bank to get a car.

Bank and Credit Union Loans

Here are some top-rated organizations offering the best interest rates and additional perks.

Pentagon Federal Credit Union

With 46 branches worldwide, PenFed Credit Union is the nation’s second-largest credit union offering exclusive discounts and services nationwide.

This credit union currently offers an APR of 1.79% for 36 months for a new auto loan and 2.39% for 36 months for a used car. Other terms and rates are also offered on loans up to $100,000. It also provides refinancing loans at an APR of 1.79% for vehicles purchased in 2021 or newer and 2.39% for pre-owned cars with over 7501 miles.

Through their car buying services, you can earn savings of up to $4,010 off MSRP and can receive rates as low as 0.99% APR for a loan term of 36 months on a new car.

Bank of America

With services available nationwide, flexible guidelines, competitive rates, and few restrictions, Bank of America is a wise option for someone with outstanding credit scores.

The bank offers new car loan rates as low as 2.29%, used car loans as low as 2.49%, and a refinancing loan as low as 3.29%. However, rates will depend on where you live within the U.S., so it is best to check the Bank of America website for the most up-to-date rates.

Gold Preferred Rewards members can receive a 0.25% discount off the APR, Platinum members can receive a 0.35% discount, and Platinum Honors can receive a 0.50% discount.


The United States Automobile Association offers financial services like car loans, personal loans, and mortgages exclusively to active service members, veterans, and their families.

USAA charges an interest rate of 1.89% for a new car loan and 2.79% for a used car loan. However, you can get a 0.25% discount if you opt for automatic electronic payments.

Car Dealership Financing

Car dealership financing is an indirect loan originated by the retailer, which is later sold to a third-party financial company or a bank responsible for taking payments from the buyer.

Car dealership financing can be a decent option if you have a poor credit score. However, you will likely be charged a higher interest rate and might not receive the perks you would have received from a financial institution that caters specifically to service members.

Most car dealerships offer financing options, so you’ll need to speak with specific dealers to see available options.

Related Article: ​​Veteran Auto Loan Assistance: Can Veterans Get Help?

Dealerships Offering Military Discounts

Another way to potentially receive a military discount is purchasing from certain car dealerships. These discounts differ from company to company, and you must meet the conditions to be eligible for these benefits.

Here are some of the discounts currently offered in the U.S.

  • Acura – Through their military appreciation deal, Acura is offering $750 off an MDX purchased in or after 2020 and TLX, ILX, and RDX models purchased in 2021. This offer is available until March 31, 2022.
  • BMW – With the BMW military incentive, you can get an incentive of up to $11,000 for a lease or new car.
  • Honda – Through the Honda military appreciation offer, you can get $500 off vehicles purchased or leased in 2020 or after.
  • Toyota – All veterans and active service members can receive a discount of up to $500 on eligible vehicles.

VA Automobile Allowance

The VA automobile allowance is a perk available under VA disability compensation benefits. This benefit provides a one-time payment of $20,577.18  to veterans suffering from severe disabilities.

You must have one of the following conditions to qualify for this benefit.

  • Loss or loss of use of one or both hands
  • Loss or loss of use of one or both feet
  • Permanent decrease of vision in both eyes
  • Amyotrophic lateral sclerosis
  • Severe burn injury
  • Ankylosis in one or both hips or knees (this condition will help you qualify only for adaptive grants).

To apply for this benefit, you must fill out VA Form 21-4502 (Application for Automobile or Other Conveyance and Adaptive Equipment) and submit it to the VA. However, before you apply for any funds, you must file a VA disability compensation benefits claim. After getting the VA’s approval, the department will pay the amount directly to the vehicle’s seller.

VA Adaptive Equipment Grant

In addition to the VA auto allowances, the VA also allows veterans and active service members suffering from severe disabilities to upgrade their vehicles through VA adaptive equipment grants.

Under this grant, you can install the following things on your vehicle:

  • Brakes
  • Windows
  • Power steering
  • Seats
  • Lift equipment

You must be eligible for the VA auto allowance to qualify for this benefit. To apply for VA adaptive equipment grant, you must start by filling out the VA Form 21-4502 and submitting it to the regional VA office. If the RO approves you for this benefit, they will fill out Section II of VA Form 21-4502 that you submitted, which you will receive through the mail.

After receiving the filled-out section II, you can upgrade the vehicle, complete Section III of the form, and send it to the RO. After getting the necessary upgrade, the seller must send the invoice to the department, which the VA will manage.

Getting a VA Car Loan with Bad Credit

While military banks are a fantastic choice for your veteran car loan application, they often require you to have an outstanding credit score.

If you are a veteran or a service member with a shaky credit score, it is recommended you look for financing through credit unions or car dealerships that are willing to offer you loans with bad credit. However, you must remember that the better your credit score, the lower your interest rates.

VA Loan for Car: Evaluating Your Options

You must evaluate your options when applying for a veteran car loan. Though the VA does not offer auto loans, several other organizations can help you purchase a car with competitive interest rates and flexible guidelines. If you are a veteran experiencing disability, look into VA allowances and grants to help you get the vehicle you need.

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