Making the Most of Military Discounts
Know Your Service; Know To Save Money
How America treats its military members has been, well, inconsistent. But the one constant is that service members, reservists and veterans who actively seek out military perks and benefits will wind up ahead. That includes getting better deals on new cars and trucks.
With that in mind, however, it's best to view some of the advertised "special opportunities" on vehicles with some caution. Some promised discounts are little more than alluring hooks for scams. There have been reports of new and used cars sold with prices inflated to recoup discounts, teaser financing rates for which no vet or service member can qualify, or instances of just plain sticking fresh enlistees with finance contracts that stretch out well beyond the length of their service.
By contrast, car manufacturers' incentives are all rather straightforward — and backed by the good faith and legal teams of big companies.
Military discounts are something everyone can feel good about. Virtually everyone likes helping service members get a good deal, and military folks are usually good customers. Service members are also usually good credit risks, thanks to their secure and regular incomes.
According to Defense Manpower Research, there were nearly 1.43 million active-duty military personnel distributed over the five service branches in 2013. Throw that in with spouses, dependents, retirees and reservists and that's a market somewhere over 7 million people.
Ever-Changing Military Deals
During May and June 2014, General Motors heavily promoted its Military Appreciation Month and offered supplier pricing on every GM model, except the limited-availability Chevrolet Spark EV (only sold in California and Oregon) and the very limited supply, race-oriented Camaro Z/28. And while Cadillac was on board during that period, it dropped off by July.
"My hope is to get Cadillac in there full-time again," said Linda Stouffer, GM's manager of vehicle purchase programs.
So if you're an admiral who wanted to get a deal on a new Escalade or XTS, you're going to have to switch tactics. In other words, the key to taking advantage of military discounts is to leap while the leaping is good.
That said, the GM military discount that's scheduled to be in effect through the end of summer 2014 is significant. Take the 2014 Buick Enclave as an example. Starting at a base price of $47,390 for the front-drive Enclave Premium trim level, the military price is $45,267. That's $2,123 off the top. And since the deal can be "stacked" or combined with other deals, that's also before the $1,500 in cash GM is currently offering to everyone, or the additional $750 being offered to those insured through the USAA military affinity organization.
If a Buick dealer participates in all these programs, that works out to $43,016, or $4,373 off the sticker price. And that's before other offers or discounts. For instance, there was another $750 in factory cash being offered over the Independence Day weekend.
With all that in mind, there's no guarantee that a military discount will always produce the very best deal, even with an aggressive program like GM's. And a determined bargain-hunting military buyer can always try to negotiate an even lower price. But even solely as a baseline for comparison, military discounts let active military, reservists and veterans leverage their service for a better deal.
Modest Discounts and Other Deals
GM's military discount isn't typical throughout the industry. More common are straightforward discounts or modest cash-back rewards. For instance, Ford currently offers $500 in bonus cash on most cars and trucks, excluding limited-production models like the Mustang Shelby GT500, F-150 Raptor and Focus Electric. Over at Lincoln, it's $750 worth of bonus cash, and no models are currently listed on Lincoln's Web site as excluded.
This doesn't mean that there aren't other Ford programs out there, however. For example, Veterans Advantage, which markets various military discounts and offers, is currently offering Ford "X-Plan" pricing to veterans. However, Ford explicitly doesn't allow its bonus cash to be applied to purchases made on the X-Plan.
Fiat-Chrysler offers $500 in cash to active military, active military reserve, military retirees and honorably discharged veterans (within six months of their discharge date). The program excludes SRT models (including the Viper), the Dodge Dart SE and the all-electric Fiat 500e. There are also additional incentives and special financing offers available through Exchange New Car Sales Program, which describes itself as the only on-base, factory authorized distributor for Chrysler, Ford and Lincoln (and Harley-Davidson, too, if motorcycles are your passion).
If you go through all the military discount offers from all the various manufacturers, you'll find subtle differences, not just in the size of the discounts and incentives, but also in how each qualifies military personnel for their programs.
Mazda, for instance, is offering $500 to active duty military personnel, but doesn't have any current programs for veterans or reservists. Nissan's pricing program, which ended June 30, 2014, offered additional $1,000-$1,500 discounts to active duty, reservists and veterans. It might resurface at some point, so keep checking.
Because of the far-flung, nomadic nature of the modern military, sometimes just getting a car to a posting or base can be a challenge. Audi, Honda, Mercedes-Benz and Toyota all offer U.S.-specification vehicles to diplomats, DOD employees and active duty military based around the world through Military AutoSource.
Finally, if you're a disabled veteran, consult the Department of Veterans Affairs about its automobile allowance. For the disabled veteran or service member, the VA offers a one-time payment of $18,900 toward the purchase of a vehicle. This isn't a benefit everyone has (or would want to have) earned, but it can be a crucial element in improving your life.
According to GM's Stouffer, between 15,000 and 20,000 cars are sold through the company's military purchase programs every year. That seems a modest number, and GM wants it to expand alongside its other outreaches to veterans — including employment opportunities. "It's been growing every year and we hope to surpass that this year," she adds.
If you are a military member or vet, it pays to research what is available to you because of your status. Not all manufacturers offer military discounts, but most do. So use all the tools available to civilians — like Edmunds Price Promise® — and then add a bit more research to discover how those may integrate with military discount programs.
You earned this benefit. So use it.