Commercial Law

Automobiles

Auto Lease Termination

The Servicemembers Relief Act allows active duty servicemembers to terminate an automobile lease, without having to pay additional charges, if one of the following situations apply:

  • The individual entered into the lease before entering into active duty, and the servicemember is called into active duty for at least 180 days, 
  • The individual entered into the lease before entering into active duty, when the Servicemember is called into active duty for less than 180 days, but is ordered to extend to 180 days without break in service
  • The individual entered into the lease during active duty, when a Servicemember receives new orders that include:

o    Permanent Change of Station overseas

o    Deployment with military unity for no less than 180 days

o    Deployment with military unit for less than 180 days, but receives orders to extend to 180 days or more.

In order to terminate the lease, the Servicemember is required to provide both a written notice of termination, and a copy of their military orders, to the person who leased them the vehicle (the lessor).  Additionally, the vehicle must be returned within 15 days of the notice. The lessor may not charge you for early termination of the contract, but you may still be charged for: taxes, title and registration fees, summonses, or any other outstanding fees. Advanced payments you made towards the vehicle must also be returned by the lessor within 30 days of the notice.

Repossession

The SCRA prevents creditors from repossessing any personal property of active duty Servicemembers without a court order. This does not include purchases made during active duty service.  Consultation with a military legal assistance attorney is advised for further information.

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