Why NCOs should never let their troops buy a car alone
Buying a car in today's world is a necessity. Even the troops who grew up in a city where they never needed anything more than a subway pass will find themselves needing a set of wheels to call their own. Military installations are way too big and timetables are way too tight for a young private to make it around comfortably on foot.
So, be prepared to fork over a bit of your enlistment bonus just to adhere to a standard. Meanwhile, it's kind of ingrained into military culture to belittle and mock the unfortunate lower enlisted who thinks they're getting a good deal on a sports car and ends up paying a 28% interest rate over five years.
Instead, shouldn't we actually, you know, help the poor soul?
You can't throw a rock outside of a military installation's main gate without hitting a sketchy used-car lot that boasts that "E-1 and above" are automatically approved for a loan. Because so many young troops are told they must get a car and have no idea how to do so intelligently, they'll usually shop at the first stop — often coming away with a car without even taking it for a test drive.
Yes, a young private has few bills to pay — they're given a barracks room rent-free and their meal card deductions hit their LES instead of their bank account — but too many troops are crippling their credit report right out the gate. A simple bad decision will follow them for life.
This is where their first line supervisor or their non-commissioned officer can step in and spend a Saturday afternoon making sure their troops are taken care of.
(U.S. Army photos by Cpl. Han, Jae Ho and Dean Herrera)
Leaders have been around for a while and generally have a good sense of the installation and its surrounding area. Given that an NCO likely has a vehicle, they could talk the rideless private past all of those sketchy spots and take them to a reputable dealership. Depending on your location, this might be an hour-long drive, but it's still better letting someone fall prey to months of ridiculously high payments.
Next comes the choice of car. The young troop, fresh out of mama's basement, might see all those numbers in their bank account and fail to piece together that $1000 isn't really all that much to grown adults. Feeling like Mr. Moneybags, the young troop may casually stroll up to the car of their dreams — and it's kind of up to the NCO to be the reality check.
"A new set of wheels and this baby will be good as new! But for you, my special friend, I'll see if I can sweet talk one of the guys to throw in a few air-freshening trees for the rear view."
(Department of Defense)
That new muscle car seems nice, but it's not the best fit for for someone who gets paid half of federal minimum wage. So, you'll want to pinch pennies. You might think that used cars are the best option then, but that opens another can of worms if the NCO isn't careful.
So, here's a little trick for you: insist that both the troop and the NCO must take the car for a test drive. The troop should be busy deciding if the car is comfortable for them, while the NCO should be looking out for deficiencies. If the car lot is reputable, they'll always allow you both to ride. If not, you found a solid reason to move on to the next place.
Hell, NCOs could even pop out a PMCS checklist right then and there. It'll establish dominance over any crooked salesmen and show you mean business.
(U.S. Army photo by Spc. Wilmarys Roman Rivera)
Finally, we arrive at haggling. A young, dumb idiot willing to throw cash around is a used car salesman's wet dream. If the troop doesn't know the actual cost of a car but is willing to sign the papers because "they threw in a free tank of gas," then they're about to get screwed. It's up to the NCO to be the middleman. A well-placed knife hand and serious demeanor could mean the difference of hundreds — if not thousands — of dollars.
Once the troop has found a vehicle that is within their price range, from a dealership that isn't trying to ripoff service-members, runs excellently, and makes the troop happy, you move on to the paperwork. Read every single line before the troop signs anything. Make sure they never take the "zero-down" offer and advise them to put at least $1,500 down — regardless of the vehicle. Just that bit can change a horrific 28% interest rate to a reasonable 8% for someone without an established line of credit.
Nipping this in the butt early can also help prevent even more paperwork if that troop has to go through financial aid.
(U.S. Army photo by Sgt. John L. Carkeet IV, 143d ESC)
However, what you cannot do is co-sign the lease with them. It doesn't matter if you trust them to pay the lease of on time or you're willing to take the hit for your guy. It's strictly forbidden by the UCMJ to enter a financial agreement of any kind with a direct subordinate.
What you can do is cattle prod your troop into making the payment every month. Yeah, it won't be pleasant for them to be reminded every month to do it, but their financial security is at stake. They'll thank you once they realize that you helped them out immensely.
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