Military servicemembers often face unique financial difficulties when called upon to serve in faraway locations. Fortunately, the federal Servicemembers Civil Relief Act (SCRA) provides legal and financial protections in the areas of foreclosure, repossession, motor vehicle leases, and more.
These protections ensure that a commitment to service doesn’t worsen a military servicemember’s financial standing. For example, under certain circumstances, the SCRA permits you to cancel or terminate a vehicle lease without paying early termination charges or a penalty if you’re ordered to move overseas or deploy.
Read on to learn when a servicemember can break a motor vehicle lease and the steps you'll need to take to terminate this kind of lease.
What Protections Do Servicemembers Get Under the SCRA?
President George W. Bush signed the SCRA into law on December 19, 2003. This federal law amended the earlier Soldiers’ and Sailors’ Civil Relief Act of 1940 and provides legal and financial protections to military personnel.
The SCRA allows military personnel to postpone, suspend, or get out of certain civil obligations so they can fully devote their energy to serving the needs of the United States. It also provides financial relief, such as limiting the interest a servicemember can be charged for certain loans or other obligations taken out before active duty military service.
Does the SCRA Cover Me?
The provisions of the SCRA cover active duty members of the U.S. military, including:
- members of the Army, Navy, Air Force, Marine Corps, and Coast Guard
- members of the National Guard when serving for over 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 when engaged in active service.
Dependents of servicemembers, such as a wife, husband, or child, are also entitled to protections under the SCRA in particular circumstances.
Can I Cancel a Car Lease?
Under the following circumstances, the SCRA allows servicemembers to terminate leases for motor vehicles used by a servicemember or their dependents for personal or business transportation.
If You Signed the Lease Before Active Duty
You may break a vehicle lease that you signed before active duty if:
- you enter military service under a call to duty or order of no less than 180 days, or
- you have orders for a shorter time that are extended to at least 180 days. (50 U.S.C. § 3955 (2024).)
If You Signed the Lease While On Active Duty
You can get out of a vehicle lease you entered into while on active duty if you receive orders:
- for a permanent change of station from the continental United States to a location outside the continental United States, 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 not less than 180 days. (50 U.S.C. § 3955 (2024).)
The SCRA doesn’t allow servicemembers to terminate a lease if they receive permanent change of station orders from a location inside the continental United States to another location within the continental United States.
So, if you receive orders requiring you to move to another state within the continental United States, make sure the lessor (the company that leased the vehicle to you) allows the leased vehicle to be taken out of state.
How to Cancel a Car Lease If You're in the Military
To cancel a lease, you must provide the lessor:
- a written termination notice, and
- a copy of your military orders. (50 U.S.C. § 3955 (2024).)
The notice must be delivered by hand, private business carrier, certified mail with return receipt requested, or electronically. (50 U.S.C. § 3955 (2024).)
You must return the vehicle to the lessor within 15 days after delivering the termination notice. (50 U.S.C. § 3955 (2024).)
No Early Cancellation Penalties
The lessor can’t impose a fee for terminating the lease early but can charge you for taxes, summonses, title and registration fees, or other obligations and liabilities under the lease terms, including reasonable charges for excess wear or use and mileage. (50 U.S.C. § 3955 (2024).)
Also, you’re responsible for all lease payments on a prorated basis until you surrender the vehicle. (50 U.S.C. § 3955 (2024).)
Amounts You Paid in Advance Must Be Refunded
If you paid any lease amounts in advance, the lessor has to refund those amounts to you within 30 days after you end the lease. (50 U.S.C. § 3955 (2024).)
Getting Help With Breaking a Car Lease
If you need help writing a termination notice or your lessor won’t terminate your lease even after taking all the required steps, contact your local JAG office. You also might be able to get help from your state attorney general's office.