Automobile Lease Terminations and Repossessions

Service members who receive a deployment notice or a change of station outside of the country may need to take care of some matters to prepare for their move. Learn how service members may be able to get out of their car lease through a law that protects the need for flexibility while in active duty.     

For the purposes of this article, the following definitions may be used: 

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

How can I get out of my car lease? 

Service members and their loved ones may end their car lease under the Servicemembers Contract Relief Act (SCRA). If the service member is eligible for SCRA protection, then they may end their car lease without paying a termination fee or a penalty. 

How do I know if my car lease is eligible for protection?  

SCRA 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, 
  • Deployment with military unit for at least 180 days or longer. 

How can a service member terminate their car lease? 

Service members are required to provide both a written notice of termination and a copy of their military orders to the company that leased them the vehicle (the lessor). The notice may be submitted by hand, by a private carrier, by certified mail, or email.  

After the notice has been submitted, the service member has 15 days to return the vehicle to the lessor. 

Click here to see an example of the termination letter 

What if I have a joint lease with someone else?  

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? 

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, or  
  • Any other outstanding fees. 

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

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

If a lessor 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.  

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?  

SCRA prevents creditors from repossessing any personal property of active-duty service members without a court order. This only applies if the car was leased before active duty.  

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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