I’m on active duty in the U.S. Marine Corps and I just found out that I’m being deployed overseas. Can I cancel my car lease?
Most likely, yes. The federal Servicemembers Civil Relief Act (SCRA) permits active duty servicemembers to cancel a car lease without any penalty so long as certain conditions are met.
History of the SCRA
On December 19, 2003, President George W. Bush signed into law the SCRA, which amended the earlier Soldiers’ and Sailors’ Civil Relief Act of 1940. The SCRA provides legal relief to military personnel by allowing them to postpone, suspend, or get out of certain civil obligations so they can devote their full energies to the needs of the United States.
Who is Covered by the SCRA
The SCRA applies to all active duty members of the United States military, including:
- members of the regular forces (Army, Navy, Air Force, Marine Corps, and Coast Guard)
- members of the National Guard (if serving for a period of more than 30 consecutive days in active duty status under federal orders), and
- commissioned officers of the Public Health Service and the National Oceanic and Atmospheric Administration if they are engaged in active service.
In some situations, dependents of servicemembers (such as a spouse or child) are also entitled to protections under the SCRA.
Your Right to Cancel a Car Lease Under the SCRA
The SCRA allows servicemembers to terminate leases for cars used by the servicemember (or his or her dependents) for personal or business transportation under the following circumstances:
Leases Entered Into Before Active Duty
You can cancel a car lease that you signed prior to active duty if:
- you enter military service under a call to duty or order of at least 180 days, or
- you have orders for a shorter period of time that are extended to a period of at least 180 days.
Leases Entered Into While On Active Duty
You can cancel a car lease you entered into while on active duty if you receive orders:
- for a permanent change of station from the continental U.S. to an overseas location outside the continental U.S. (including Hawaii and Alaska)
- for a permanent change of station from Hawaii or Alaska to a location outside the state, or
- if you’re deployed for a period of 180 days or more.
How to Cancel a Car Lease
To cancel the lease you must provide the lessor (the company that leased the car to you):
- a written termination notice, and
- a copy of your military orders.
The notice must be delivered by hand, private business carrier, or U.S. mail with return receipt requested. (Look online to find a sample form that you can use for the termination notice.)
You must return the car to the lessor within 15 days after you deliver the notice of termination.
The Car Lease Company Cannot Charge Early Cancellation Penalties
The lessor can’t impose a fee for terminating the car lease early, but can charge you for:
- title and registration fees, or
- other obligations under the terms of the lease. (This includes reasonable charges for excessive wear and tear or mileage.)
The Car Lease Company Must Refund Amounts You Paid in Advance
If you paid any lease amounts in advance, the car lease company must refund those amounts to you within 30 days of the termination.