NATTC's Financial Counseling Program Can Save Sailors Big Bucks When Purchasing a Vehicle

By Chief Aviation Electronics Technician David San Angelo, Naval Air Technical Training Center Public Affairs

May 9, 2010 - PENSACOLA, Fla. (NNS) -- A financial counseling program currently offered to students at the Naval Air Technical Training Center has the potential to save Sailors thousands of dollars on vehicle purchases.

Reliable transportation is likely one the largest purchases a service member will make, and without proper research, that purchase can be more expensive than necessary.

To help make an informed buying decision, Naval Air Technical Training Center (NATTC) suggests students meet with a command financial specialist (CFS) prior to the purchasing a vehicle.

"The Vehicle Purchasing Financial Counseling Program (VPFCP) provides our Sailors with the tools they need to make a smart car, truck or motorcycle purchase," said Chief Aviation Electrician's Mate (AW) Mickey Sperry, NATTC's lead command financial specialist. "We help them with determining the Blue-Book value and ballpark interest rates for their chosen vehicle."

For 19-year-old Naval Aircrewman Airman Apprentice Nicholas Hudson, the VCFCP program was extremely educational and financially beneficial. Hudson recently purchased a 2000 Chevrolet 1500 truck for $8,400 with an eight percent interest rate.

"The information from the CFS on insurance rates and shopping around to compare prices and interest rates was very helpful," said Hudson. "I can see how somebody who didn't go through counseling with a CFS could easily fall into a financial hole."

"Counselors discuss different buying scenarios and the pitfalls to avoid," added Sperry. "We try to ensure that our students are very informed about the short-term and long-term effects of their purchasing decision.

One common scenario is the "how much can you afford per month" tactic presented by many salesmen. One of the biggest points that the NATTC CFSs stress is the difference between total vehicle price versus monthly payment. A monthly payment of $250 is much more attractive to most students than $350, but if the car dealer has you paying that $250 for six years versus the $350 for three years, then the service member will be paying an additional $5400 for the same car. Buyers should negotiate the vehicle price first, and then work out the financing terms, and compare dealer financing with that available from their bank or credit union.

In contrast to Hudson's experience, 20-year-old Airman Recruit Alexander Heidebrecht purchased a truck without counseling from a CFS. He purchased a 2001 Ford F250 for $11,750, with a monthly payment of $306 for four and one-half years. The vehicle was purchased significantly more than the Blue Book price of $9,500 and he financed the vehicle through the dealer with a 14.9 percent interest rate. With interest, Heidebrecht will pay more than $16,500 for his truck.

"Talking to a CFS prior to purchasing my truck probably would have saved me quite a bit of money," said Heidebrecht.

The NATTC program doesn't just educate young Sailors on their financial status before and after a major purchase of a vehicle; it also educates them on what they could be faced with should they get orders oversees, or directly to a deployed squadron or ship.

The program informs Sailors of possible scenarios they may face in the next five or so years while financing a vehicle.

"This is the third vehicle I have purchased, so I knew what could be expected financially," said 25-year-old Aviation Electronics Technician Airman Venessa Wesselman. "Before I met with the CFS, I didn't know how purchasing the vehicle and defaulting on the loan could affect my security clearance; that was some good information. I didn't have anybody to talk to when I bought my first car and I had to learn the hard way."

For more information on financial counseling, visit a local Fleet and Family Service Center.