Automobile Lease Terminations and Repossessions

Service members who receive a deployment or change of station notice may have financial or property concerns, including vehicle leases. Learn how service members may be able to get out of their car lease through the Servicemembers Civil Relief Act (SCRA). 

For the purposes of this section of the SCRA, the following terms may be used: 

  • Lessor: the company that leased the vehicle to the service member 
  • Lessee: the service member who leased a vehicle

What if I have a car lease and am being deployed?

Service members and their loved ones may be able to end their car lease under the Servicemembers Civil Relief Act (SCRA). This law only applies to vehicle leases, not traditional vehicle purchases and payments.

How do I know if my lease qualifies under the SCRA?

The Servicemembers Civil Relief Act allows active-duty service members to terminate a car lease without having to pay additional charges if one of the following situations apply: 

  • The service member entered the auto lease before entering active duty, and then is called into active duty for at least 180 days, or 
  • The service member entered the lease before entering active duty, is called into active duty for less than 180 days, but is then ordered to extend to 180 days without break in service, or 
  • The service member entered the auto lease during active duty, and then receives orders that may include: 
    • Permanent Change of Station (PCS) overseas, or to states such as Alaska or Hawaii, or 
    • Deployment with military unit for at least 180 days or longer.

What do I have to do to end my car lease?

To terminate a lease, first contact the finance department at the dealer where the vehicle was leased and ask if a termination notice should be provided to the dealer or a different agency. Once that is established, the service member is required to provide them:

A car
  • A written letter that gives the reason the lease needs to be terminated, what provision makes them eligible to break their lease, and the date the lease would end; AND  
  • A copy of their military orders. 

The notice may be submitted by hand, by a private carrier, by certified mail, or email. After the documents have been sent the service member has 15 days to return the vehicle to the lessor. 

Click here to see a sample termination letter 

What if I have a lease with someone else?

For service members that lease a vehicle with another person, the joint lease can be terminated in the same way as a non-joint lease. Termination by a service member of a joint lease also terminates the lease obligation for spouses or dependents under the lease.

Will I have to pay a termination fee?

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No. The lessor may not charge service members for early termination of the contract, but they may still be charged for:  

  • Taxes,  
  • Title and registration fees,  
  • Past due payments, and 
  • Repairs to the vehicle. 

Advanced payments service members made for the vehicle must be returned by the lessor within 30 days of receiving the notice. 

What if the dealer does not want to accept my car back?

If the dealer is not accepting a car back after a notice of termination, with evidence, was provided, contact Armed Forces Legal Assistance for help. Through a legal assistance office, service members may take advantage of no-cost legal assistance services.  

A torn document.

Service members may also contact their state Attorney General office to submit a complaint against the non-cooperating company.  

Is my car protected from repossession?

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SCRA prevents creditors from repossessing any personal property of active-duty service members without a court order. This only applies if the car was obtained before active duty. 50 U.S.C. § 3952

This website has been prepared for general information purposes only. The information on this website is not legal advice. Legal advice is dependent upon the specific circumstances of each situation. Also, the law may vary from state-to-state or county-to-county, so that some information in this website may not be correct for your situation. Finally, the information contained on this website is not guaranteed to be up to date. Therefore, the information contained in this website cannot replace the advice of competent legal counsel licensed in your jurisdiction.

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