San Antonio, Texas-based United Services Automobile Association (USAA) offers essential vehicle-related services to current and former US military members and their families. While the USAA Car Buying Service—previously known as the USAA Auto Circle—closed its own independent operations in 2020, the work is now done by TrueCar.
Let's take an in-depth look at how the service worked and what it was set up to do. We'll also include some further details on what the USAA continues to offer through the TrueCar affiliation.
What is USAA? What is the USAA Car Buying Service?
25 US Army officers started USAA a century ago. The group met in San Antonio and decided to start a small organization that would help members by insuring each other's vehicles. Since those days, it has grown into a massive organization with 13 million members and more than 36,000 employees, managing some $200 billion in assets and a $40 billion net worth.
Besides the USAA Car Buying Service (see below), USAA also offers its members—all present or former members of the US military and their families—financial services including automotive insurance, banking, investing, retirement planning, and more.
USAA Car Buying Service
In short, this car buying service from USAA was designed to help make the process of sourcing and acquiring a new or used car easier for USAA members. Even when operating as its own service, it used TrueCar as its engine. The idea was to provide members with a fixed quote for a car price directly from dealers without the need for further negotiation. In other words, it was a car buying service meant to make getting a new car much less complicated.
How Did USAA Car Buying Service Work?
The service sought to remove potential stress from the car buying process. The first thing users did was visit the USAA car buying site and search for the desired vehicle (new or used) by make, model, and trim level.
Once the buyer entered all the necessary information, a certified dealer would reply to the request with a price. The USAA/TrueCar offer would include all discounts, fees, and other charges. The price the buyer saw was the exact price they would pay.
All dealers who submit quotes are active participants in the USAA/TrueCar process, so there'd be no surprises on the other end when delivering on a quoted price. As buyers received their offers, they'd also see a price curve that showed what other people in the area had paid for the same car. This allowed a better understanding and more precise insight as to whether the deal was a genuinely good offer or not.
Offers that buyers receive are no-obligation quotes, and if they choose to go forward, buyers save (and print) a special certificate that would secure and guarantee that price when they go to collect and pay for the vehicle. They'd have to arrive at the corresponding dealership, submit the certificate, and purchase the car for the agreed price.
Advantages of USAA Car Buying Service
Financial Savings for Service Members
It's great to see that deserving current and former members of the US Armed Services should see discounts and other buying benefits when looking for a new or used car. It's a small token of appreciation for their service. Specifically, there are three main ways that USAA members save:
Savings Off the MSRP
The main benefit of using the USAA system was the savings from the manufacturer's suggested retail price (MSRP). Many dealers already, in fact, sell cars below MSRP anyway (at least in more normal times), so even with USAA discounts—an average of $3,554 off the MSRP—it was always worth exploring the market for a better offer.
But an average discount of more than $3,500 is a respectable sum of money. This reduction was built into the price that users of the USAA Car Buying Service (and later TrueCar Military) received after submitting their search requests. It made the price more attractive and helped reassure buyers about the offer's validity.
Certain manufacturers offered cash bonuses of up to $2,000. These brands included: Alfa Romeo, BMW, Ram, Nissan, Chrysler, Dodge, Mini, Mercedes-Benz, Fiat, Ford, and Jeep. An additional cash discount left more money for service members to use for other purposes.
When USAA members bought a car through the service, they'd get a 0.50 percent interest rate discount on a USAA auto loan. A good credit score is still required, and there is no automatic qualification for the loan. Still, a half a percentage point taken off the interest rate builds into significant savings over the lifetime of that loan.
One thing to note here is that by USAA's own admission, there was no guarantee that its rates were the absolute lowest one could get. Those with good credit scores may well have been able to get even better deals by going directly to a new car dealership or credit union.
Hassle-Free and Negotiation-Free
The general market direction is moving towards a more hassle-free car buying experience, something that USAA members have taken advantage of for many years. This is an addition to the member benefits mentioned above.
The USAA and TrueCar systems allow for unambiguous pricing. The buyer can move from offer to purchase with nothing in between. It's a way of removing the stress and discomfort that can come from the back and forth of negotiating.
Backed Up By Strong Financial Services
Finally, the USAA Car Buying Service was strong because it was supported by a century-long tradition of robust financial management and customer service. The trust in USAA is a big part of what encouraged dealerships to participate in the first place. And the involvement of so many dealers made for a very credible program.
How Does TrueCar Continue the Work?
TrueCar has a separate and dedicated section of its platform specifically for serving current and former service members; it's called TrueCar Military. TrueCar specifies numerous benefits that USAA members and other service members and their families can enjoy:
- Cash bonuses of up to $2,000 from select automakers
- A condition summary on every pre-owned car
- Benefits for repairs and deductible reimbursements of up to $4,000
- Additional savings on individual vehicles of $500 or more
The program allows service members to perform vehicle searches that reflect available benefits (discounts), further aiding the shopping process. TrueCar Military also runs a program called DrivenToDrive which provides disabled veterans with retrofitted cars adapted for a service member's situation. To date, the program has delivered five vehicles.
Qualified members can also take advantage of Military Autosource. The program enables service members involved in an OCUNUS PCS move to use this global car buying benefit. US-specification vehicles can be purchased and delivered to 50 overseas base locations.