Under some 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 must take to cancel this kind of agreement.
What Is the Servicemembers Civil Relief Act (SCRA)?
On December 19, 2003, President George W. Bush signed 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.
How to Get Out of a Car Lease If You're a Military Servicemember
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. (50 U.S.C. App. § 3955).
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 a location in a state outside the continental United States to any location outside that state (the term "state" includes a commonwealth, territory, or possession of the United States and the District of Columbia) or
if you're deployed with a military unit or in support of a military operation for a period of 180 days or more. (50 U.S.C. App. § 3955).
How to Break Your Car Lease
To break a vehicle lease, you have to:
Give the lessor (the company that leased the car to you) a written termination notice and a copy of your military orders.
Deliver the termination notice by hand, private business carrier, U.S. mail, or electronic means (see below) with return receipt requested.
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.
Giving Notice By Electronic Means
Under the SCRA, you may deliver the notice by electronic means including:
sending it to an electronic address designated by the lessor (or the lessor's grantee) or the lessor's agent (or the agent's grantee)
by posting it to a website or other internet or electronic-based information repository to which access has been granted to the lessee, the lessor (or the lessor's grantee), or the lessor's agent (or the agent's grantee), and
other electronic means reasonably calculated to ensure actual receipt of the material by the lessor (or the lessor's grantee) or the lessor's agent (or the agent's grantee).
The lessor can't charge you a fee for ending the car lease early but can charge you for:
title and registration fees, or
other obligations under the lease terms, 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 leasing company has to refund those amounts to you within 30 days after you end the lease.
More State Protections
In addition to federal law, many states have statutes that protect servicemembers in specific legal situations.