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USAA vs. Navy Federal: Which offers better auto loans?

USAA and Navy Federal provide banking and lending solutions to U.S. military members, veterans and qualifying relatives. Founded in 1922, USAA has evolved from an auto insurance company to a full-scope provider of financial services. Navy Federal is currently the country’s largest credit union, offering attractive financial solutions to its customers.

Both lenders operate in all 50 states. However, USAA offers flexible payment options, while Navy Federal features loans with longer terms and a car-buying service to help simplify the shopping and financing process.

USAA vs. Navy Federal at a glance

You’ll find attractive APRs (annual percentage rates) and generous loan limits with USAA and Navy Federal. Evaluate each lender’s perks to decide which is best for you.

Bankrate score

4.0

4.7

Better for 

  • Flexible payment options

  • Payment relief options

  • Longer terms

  • Car-buying service

Loans offered

New and used purchase loans, refinance loans, lease buyout loans

New and used purchase loans, refinance loans

Loan amounts

From $5,000

From $250

APRs

From 5.99%

From 4.54%

Loan term lengths

36-84 months

36-96 months

Fees

Not specified

Late payment penalty

Minimum credit score

Not specified

Not specified

State footprint

All states

All states

Time to funding

One to three business days

As soon as the same business day

Autopay discount?

Yes

No

Refinancing restrictions

Not specified

Not specified

USAA auto loans

USAA auto loans and auto loan refinancing are available in all 50 states. The low starting APR is a for qualified borrowers who do business with this lender. Used car loans start at 6.09 percent, lower than the average of 7.43 percent that super prime borrowers received in 2023’s third quarter.

Unlike its competitors, USAA features flexible repayment schedules to make your loan payments work better for your budget. And there are payment relief options available if a natural disaster strikes your area.

Pros

  • Flexible repayment options: You can make auto loan payments biweekly, twice a month or monthly.

  • Autopay discount: Borrowers get a 0.25 percent discount when enrolling in automatic payments.

  • Minimal fees: USAA does not assess loan application, origination or prepayment penalties.

Cons

  • Online prequalification unavailable: You must formally apply for an auto loan to determine eligibility and view loan offers. That means taking a small and temporary hit to your credit score.

  • Limited accessibility: Loans are only available to servicemembers, veterans, their spouses and qualifying relatives.

  • Missing loan details: The maximum loan amount and maximum APR are not currently listed on USAA’s website.

Navy Federal auto loans

Navy Federal also features purchase loans and refinance loans in its lending arsenal. They come with competitive rates and lengthy loan terms. Plus, borrowers enjoy quick approvals and same-day funding.

Although the minimum credit score is not disclosed, you’ll likely need excellent credit to land the lowest rates. Starting rates are lower than the current industry average auto loan rates of 5.61 percent and 7.43 percent for new and used car loans, respectively, for borrowers with comparable credit profiles. They’re also lower than what USAA currently offers.

Pros

  • Lengthy terms: Loan repayment periods of up to 96 months are available to help make monthly payments more affordable.

  • Extended shopping window: You’ll have 90 calendar days from the date of preapproval to find a vehicle. That’s twice the 45 days USAA offers.

  • Car-buying service: Navy Federal partners with TrueCar, allowing you to comparison-shop for a vehicle online and even request delivery.

Cons

  • Limited APR disclosures. As with USAA, maximum interest rates aren’t listed online. And because there’s no prequalification, you’ll need to apply for preapproval to view your possible rates.

  • Unavailable to all borrowers. Like USAA, Navy Federal restricts accessibility to service members, veterans and qualifying relatives with military ties.

  • Higher APRs for older models. Vehicles manufactured before 2021 have much higher starting interest rates, which isn’t unusual among lenders.

How to choose between USAA and Navy Federal

It can be challenging to choose between the two as both offer attractive incentives that make them worth considering. USAA offers autopay discounts you won’t find with Navy Federal. But Navy Federal’s lower minimum APR, loan amount or faster funding times could make it a better fit for you.

Choose USAA for flexible repayment options

There aren’t many auto lenders that give borrowers the flexibility to make payments when convenient. However, that’s not the case with USAA, as you can pay every two weeks or monthly. Making biweekly payments can help you pay off your loan faster and save on interest.

USAA also extends generous payment relief options, including payment suspensions, to borrowers impacted by natural disasters. Again, it’s not uncommon for lenders to advertise this form of assistance as the response to these events is typically handled on a case-by-case basis.

Choose Navy Federal for longer terms

Many lenders have started catering to borrowers’ needs by offering extended loan terms to make payments more manageable. The maximum term you’ll typically see is 84 months, but with Navy Federal, select borrowers can choose a loan term of 96 months. But be aware that extending your term means paying more interest over time.

Another perk of Navy Federal is the 90-day shopping window to take the pressure of finding the perfect vehicle quickly. USAA only gives you 45 days, making Navy Federal the winner.

It’s also worth mentioning the car-buying service available to all borrowers. Offered through TrueCar, it lets you view available vehicles and purchase prices on comparable models. You can also request an offer if you want to trade in your current ride. Plus, there’s an overseas car-buying program for currently deployed individuals.

Compare more lenders before applying

Both USAA and Navy Federal are reputable lenders to consider if you’re buying a car or contemplating refinancing your current loan. They feature some of the best rates on the market, and the entire application process can be handled online. Before formally applying with either, compare loan quotes from at least two other lenders to ensure you get the best deal.

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