By Chris Stinebert & Andy Koblenz
You have a lot on your mind. Perhaps you have just returned from a lengthy overseas deployment and are working to acclimate back to "normal" life. Maybe you're about to be deployed and are worried about your family finances at home. Or maybe you need a new car, and you must sort through the many options available to finance it.
With all the pressures of military life, it would be understandable if properly managing personal finances and making sound financial decisions were at the bottom of military families' to-do lists. Research has shown, however, that this is simply not the case, particularly when it comes to auto financing decisions. In fact, civilians could stand to learn a few lessons from members of the military.
Vehicle financing is a way of life in America, especially among those in the military. According to a survey comparing certain financial habits of servicemembers and Americans in general, nearly half of military personnel plan to purchase a vehicle sometime in the next three years - and nearly two-thirds of those expect to finance that vehicle.
More Prepared Than Most
America's military personnel are particularly prepared for this major financial event in their lives, more so than Americans in general. And they're more committed to continuing to find ways to keep learning and improving the process in the future.
The survey, conducted by Americans Well-informed on Automobile Retailing Economics (AWARE), a non-profit auto financing education group, found that people in the military are more likely than the average consumer to understand the process of buying and financing a vehicle, and to spend time researching their options.
This is especially true when it comes to researching financing for a vehicle. Nearly four in 10 (37 percent) military respondents completed three or more hours of research for vehicle financing prior to their last purchase. This is significantly better than the general public, where only about one quarter (26 percent) completed three-plus hours of research.
Military respondents also indicated a higher level of comfort with the vehicle financing process than the general public. Three-quarters (75 percent) of the military feel informed about vehicle financing - and there is intensity to that feeling, with 52 percent feeling "very" informed. This is stronger than American consumers in general, 58 percent of whom felt informed with the process (36 percent felt "very" informed).
While these statistics may seem surprising to some outside the military, this is not "new news" to educators on military installations involved in the "financial readiness" movement.
For example, Linda Sapp, community readiness consultant for the Airman and Family Readiness Center at Cannon Air Force Base in New Mexico, told AWARE that she was "not at all surprised" by this data. She attributes the high level of comfort and understanding of the vehicle financing process to the extensive personal finance education programs like hers that are occurring throughout the military.
Sapp's job is not complete, she further explained: "We still see Airmen who have made unfortunate financial decisions and are suffering the consequences of those decisions. Financial education is a never-ending process. We want to give them the tools to make informed decisions throughout their financial lives."
The Airman and Family Readiness Center hosts a Personal Financial Management Program to help individuals and families meet their financial needs and goals through financial education, information and counseling. Sapp says vehicle financing education is part of that program.
Savvy Young Buyers
The AWARE survey also found that, contrary to conventional wisdom about "the young and the reckless," younger military respondents are likely to be better prepared in terms of their perceived level of knowledge and comfort than their older counterparts in the military or the general public. For example:
- Younger military respondents (under age 30) are more likely than their older counterparts (age 30 and above) in the military to have shopped around for financing for their last car or truck purchase (49 percent vs. 29 percent). They're also more likely to have checked their credit score before shopping (47 percent vs. 26 percent).
- Younger military respondents intend to do even better next time around, saying that they are much more likely than their older counterparts to plan to check their credit score for their next purchase (78 percent vs. 54 percent), and displaying more conviction than older military personnel in their intent to negotiate financing for their next vehicle purchase (86 percent vs. 72 percent).
- These younger military respondents also seem more open to receiving information and education on the subject. Eighty-two percent indicate interest in learning more about auto financing from the auto financing industry (compared to 63 percent interest among older military respondents).
Lessons Learned From The Military
Vehicle ownership - particularly for military spouses - can improve both earning potential through the opportunity to commute to better paying jobs and in quality time spent with family. But economic challenges, such as debt troubles or living on a fixed income, make it essential to conduct the homework required to make sound vehicle financing decisions. The financial education programs in the military, offered through the Department of Defense as well as civilian resources, appear to be making a positive impact on the likely first- or second-largest purchase in an individual's life - purchasing a vehicle.
As in so many aspects of their lives, military members are setting a fine example that other Americans would be wise to follow.