How to Break a Car Lease If You’re in the Military

The Servicemembers Civil Relief Act (SCRA) allows a military servicemember to cancel an automobile lease under certain circumstances.

Under certain circumstances, if you’re a member of the military and you’re ordered to move or you’re deployed, the federal Servicemembers Civil Relief Act allows you to cancel a car lease—and you won’t have to pay an early termination charge or penalty. Read on to find out when a servicemember may break a car lease and learn the steps you have to take if you want to cancel this kind of agreement.

Servicemembers Civil Relief Act (SCRA)

On December 19, 2003, President George W. Bush signed into law the Servicemembers Civil Relief Act (SCRA) as an amendment to the 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 serving the United States.

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)
  • reservists on federal active duty
  • 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’re engaged in active service.

In some situations, dependents of servicemembers—like a spouse or child—are also covered by the SCRA’s protections.

Breaking a Car Lease

The SCRA allows servicemembers to cancel a car lease under certain circumstances if the servicemember (or the servicemember’s dependents) use the car for personal or business transportation.

Leases Entered Into Before Active Duty

You may cancel a car lease that you signed before active duty if:

  • you enter military service under a call 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 During Active Duty

You may 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 a 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 with a military unit or in support of a military operation for a period of 180 days or more.

Example. Suppose you entered into a car lease during active military service in Alaska and then you receive Permanent Change of Station (PCS) orders sending you to California. You may break the lease under the SCRA. But if you’re in California and receive orders to go to Georgia, you don’t have the right to end the lease.

How to Break Your Car Lease

To break a vehicle lease, you have to:

  1. Give the lessor—the company that leased the car to you—a written termination notice and a copy of your military orders.
  2. Deliver the termination notice by hand, private business carrier, or U.S. mail with return receipt requested.
  3. Return the car to the lessor not later than 15 days after delivering the termination notice.

The lease ends after you’ve completed all of these steps.

Allowed Charges

The lessor can’t charge you a fee for ending the car lease early, but can charge you for:

  • taxes
  • summonses
  • title and registration fees, or
  • other obligations under the terms of the lease, like reasonable charges for excessive wear or use and mileage.

Refund of Amounts You Paid in Advance

If you paid any lease amounts in advance, the car lease company has to refund those amounts to you within 30 days after you end the lease.

More State Protections

In addition to the federal law, many states have their own statutes that provide protections for servicemembers in certain legal situations.

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