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.
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:
In some situations, dependents of servicemembers—like a spouse or child—are also covered by the SCRA’s protections.
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.
You may cancel a car lease that you signed before active duty if:
You may cancel a car lease you entered into while on active duty if you receive orders:
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.
To break a vehicle lease, you have to:
The lease ends after you’ve completed all of these steps.
The lessor can’t charge you a fee for ending the car lease early, but can charge you for:
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.
In addition to the federal law, many states have their own statutes that provide protections for servicemembers in certain legal situations.