You’d think that serving your country would come with a few perks, right? Maybe some decent financial protections? A fair shot at buying a car without getting ripped off?
Think again.
A new Consumer Financial Protection Bureau (CFPB) report confirmed something outrageous: Servicemembers—our own military personnel—are paying MORE for cars than civilians.
Not because they buy fancier cars.
Not because they have worse credit.
But because the system is rigged against them.
The Military Auto Loan Trap
The CFPB analyzed 20 million auto loans from 2018-2022 and found that military borrowers are:
🚨 Borrowing more while putting down less – A servicemember financing a new car takes out an extra $2,200 in loans compared to a civilian. For a used car? That’s still nearly $400 more.
🚨 Paying higher interest rates for longer – Military borrowers get charged an extra 0.6% in APR and take out longer-term loans. That translates to $1,300 MORE in total loan costs for a new car.
🚨 Saddled with add-ons they don’t need – Over 70% of servicemembers were sold warranty, service, and GAP insurance—paying $140 more than civilians for these extras.
🚨 More likely to roll negative equity into the deal – Meaning they owe more than the car is worth before they even drive off the lot.
Why Are We Doing This to the People Who Protect Us?
This isn’t a mistake. It’s a business model.
Military members HAVE to have cars—it’s not a luxury. They’re often stationed in places without public transit, moving constantly, and can’t just carpool their way to work. Lenders and dealerships know this, and they exploit it every chance they get.
Plus, many servicemembers are young, away from home, and don’t have financial mentors around to warn them about bad deals. Instead of protecting them, lenders see them as easy targets.
And let’s be clear: That’s disgraceful.
We should be honoring the people who serve, not trapping them in debt cycles that make their lives harder.
This Is Not the First Time the CFPB Has Had to Step In
This isn’t just about auto loans—this is a pattern.
🔥 The CFPB forced Navy Federal Credit Union to return $95 million in illegal overdraft fees they charged servicemembers, veterans, and their families.
🔥 FirstCash and MoneyLion got nailed for illegally charging servicemembers high-interest loans, violating the Military Lending Act.
🔥 The CFPB found that Reserve and National Guard members are losing out on $9 million a year by not getting the interest rate reductions they’re legally entitled to.
🔥 Now, the CFPB is trying to block data brokers from selling servicemembers’ personal info to scammers, stalkers, and even foreign governments.
Read that again.
Scammers. Stalkers. Foreign governments.
How is any of this okay?
How to Avoid the Trap
If you’re in the military—or know someone who is—pass this along.
Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.
📌 Shop around – Don’t take the first financing offer. Get quotes from banks, credit unions, and military-friendly lenders.
📌 Say NO to junk fees – Dealerships push useless add-ons to boost their profits. You don’t need most of them.
📌 Know your rights – The Military Lending Act (MLA) and Servicemembers Civil Relief Act (SCRA) exist for a reason. Use them.
📌 Check for hidden fees – Focus on total cost, not just monthly payments—a longer loan might mean you pay thousands more.
The hard truth? If we don’t start fixing this, we’re telling servicemembers that their financial well-being is an acceptable casualty of war.
And that should make every one of us angry. – Source
📢 Share this. They deserve better.
