I am in the military and have an auto lease. If I am ordered to move overseas or deploy, can I cancel or terminate my auto lease without paying early termination charges or a penalty?
Answer: Yes, under certain circumstances, the Servicemembers Civil Relief Act (SCRA) allows active duty service members to terminate an auto lease without having to pay early termination charges or a penalty.
In order to terminate an auto lease under this law, you must have entered into the auto lease:
- Prior to active duty, and then been called onto active duty for 180 days or longer; or
- During active duty, and received orders for a Permanent Change of Station:
- from a location inside the continental United States (CONUS) to a location outside the continental United States (OCONUS), or from a location in a state OCONUS to any location outside that state, or
- be deployed with a military unit or in support of a military operation for 180 days or longer.
TIP: Here are some examples of when you can and cannot terminate your auto lease under the SCRA:
- OCONUS to any other state, for example, Alaska to Hawaii, or Alaska to Texas, you can terminate;
- CONUS to CONUS, for example, Georgia to California, you cannot terminate.
Carefully read your lease terms and consider your situation before signing the contract.
To terminate your auto lease, you must:
- Provide a written notice of termination to the lessor, who is the company or the individual that leased you the vehicle or the lessor’s agent;
- Provide a copy of your military orders to the lessor or agent;
- Return the vehicle within 15 days after the date of delivery of the written notice of termination.
- Deliver the written notice by hand, by a private carrier, or by certified mail with return receipt via the US Post Office. Email notice is not acceptable.
The auto lease will be terminated only after written notice is provided AND the vehicle is returned to the lessor.
The lessor can’t charge you for the early cancellation of the lease. The lessor can still charge you for any taxes, title and registration fees, summonses or any other outstanding fees, including reasonable charges for excessive wear and tear and mileage that were due and unpaid on the date of termination. Any advance payments you made must be refunded within 30 days of the termination.
Contact your local JAG or installation Legal Assistance Office for more information.