Attorney General Alerts

Car Financing Tips for Service Members

December 9, 2015

The Consumer Financial Protection Bureau (CFPB) reports that military service members often become targets of scammers when purchasing or financing a vehicle, including paying money to a scammer posing as a lender who takes their money and disappears.

Meanwhile, overseas deployments or a change-of-duty station can create financial stress and unique financial difficulties. And some unscrupulous lenders target service members by exaggerating their ties to the military to pull at the heartstrings of potential consumers when taking out a car loan.

Attorney General Leslie Rutledge released today’s consumer alert to encourage military service members to be educated buyers and borrowers.

“All Arkansans considering a vehicle purchase should shop around for the best vehicle and financing options for them,” said Attorney General Rutledge. “But the brave men and women who serve our country need to make special considerations when buying a vehicle. All too often military service members become prime targets for scammers who pose as lenders, taking the service member’s money without providing promised financial services.”

Attorney General Rutledge released the following tips for members of the military who are considering buying a new or used vehicle:

  • Work out a budget before talking with a dealership. Know how much money you have to devote to a down payment, as well as monthly payments.
  • Only shop for financing with a car dealer after you have explored other financing options such as local or national banks and credit unions. If you finance with a dealer, request information about the “buy rate” in order to avoid hidden markups.
  • Beware of extra products like gap insurance or extended warranties.
  • Get a free copy of your credit report at and know your creditworthiness.
  • Research vehicles, know their approximate cost and read reviews to find out what other consumers are saying about a particular vehicle.
  • Shop around for the best dealers, lending rates and insurance providers to avoid businesses with bad reputations.

Military personnel are provided some additional protections when looking for a new vehicle. Make sure the lender is aware of a deployment so they can honor the interest rate cap of 6 percent specified in the Servicemembers Civil Relief Act (SCRA). A vehicle lease can also be broken without penalty if the service member is deployed, according to the SCRA. Some insurance companies offer discounts to service members. And some lenders provide military car loans that offer lower interest rates and down payments, but use caution because this also means it will take longer to pay down the loan

For more car-buying tips, credit reporting information and other consumer-related questions, call the Arkansas Attorney General’s office at (800) 482-8982 or visit or

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