Military servicemembers often face unique financial difficulties when they’re called upon to serve in faraway locations. 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 military servicemember’s financial standing isn’t worsened by a commitment to service.

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. This article discusses who's covered by the SCRA, when a servicemember can break a motor vehicle lease, and the steps you'll need to take if you want to terminate this kind of lease.

Protections for Military Personnel 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 both 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 amount of interest a servicemember can be charged for certain loans or other obligations taken out before active duty military service.

Who’s Covered by the SCRA

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 certain circumstances.

When You Can Cancel a Motor Vehicle Lease

The SCRA allows servicemembers to terminate leases for motor vehicles used by the servicemember—or his or her dependents—for personal or business transportation under the following circumstances:

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.

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, or
• if you’re deployed with a military unit or in support of a military operation for a period of not less than 180 days.

The SCRA doesn’t allow servicemembers to terminate a lease if you 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 that will require 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.

Steps to Take to Cancel the Lease

To cancel a lease, you must provide the lessor:

• a written termination notice, and
• a copy of your military orders.

The notice must be delivered by hand, private business carrier, or certified mail with return receipt requested.

You must return the vehicle to the lessor within 15 days after you deliver the notice of termination.

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 terms of the lease, including reasonable charges for excess wear or use and mileage. Also, you’re responsible for all lease payments on a prorated basis up to time you surrender the vehicle.

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.

Getting Help

If you need help writing a termination notice or if your lessor won’t terminate your lease even after you take all required steps, contact your local JAG office. You also might be able to get help from your state attorney general's office.