SCRA Vehicle Lease Termination

Are you an active-duty servicemember or dependent needing motor vehicle lease termination?

Under the Servicemembers Civil Relief Act, you can be eligible for motor vehicle lease termination if you use the vehicle for personal or business purposes. This act provides those serving their country with legal protections regarding motor vehicles, helping free up financial resources and reducing stress during military service.

If your service has impacted your current motor vehicle lease situation, explore options available under the Servicemembers Civil Relief Act to get back on steady ground.

How does it work?

Active-duty military personnel are covered by the Servicemembers Civil Relief Act (SCRA) and are allowed to terminate their vehicle lease if they signed it before or while on active duty.

In addition, military personnel can also be released from their lease under circumstances such as active deployment for over 180 days or a permanent change of station outside of the US.

However, a fee may still be due in the form of paying early termination charges- these must not exceed an amount equal to one hundred and fifty percent (150%) of the total amount remaining on the lease. Military personnel should take advantage of this SCRA benefit when necessary.

Does it Apply to Active Duty Service Members?

Yes, the SCRA covers active duty service members and their dependents. Dependents may include their spouse and their children. The SCRA applies to members of the Army, Marine Corps, Navy, Air Force, Coast Guard, and commissioned officers of the Public Health Service or the National Oceanic and Atmospheric Administration.

Active military reservists and National Guardsmen who have been called into a military operation, as well as service members who are on active military duty in the continental United States, may terminate their existing leases if they were entered into before the military operations began and continue for at least 180 days.

The military code provides these protections so that military personnel can answer their call of duty without worrying about personal obligations or penalties due to financial situations. So, if you’re a military service member whose lease was written prior to the commencement of your active service, be sure to take advantage of this benefit to take care of your military obligations.

How Can a Service Member Rendering Military Service Terminate a Motor Vehicle Lease?

If you are a member of the military or a military unit called to active duty military service, you need to take prompt action regarding your vehicle lease. Just like military orders are binding on military units, so is the military servicemember’s lease agreement with their leasing company.

Fortunately, military members can get help in this area—the military can provide relief from personal financial obligations through written notification to their leasing company.

For example, the service member must have a letter hand-delivered, US mail (return receipt requested), or a private carrier like FedEx that states their termination of the lease and includes a copy of military orders and other necessary documentation such as an odometer statement.

When dealing with this detail, take time to read over all of your rights as a military serviceperson. Additionally, you may need to ready forms such as:

• Letter of Intent to Transfer Ownership and Terminate Lease
• Statement of Odometer Disclosure
• Notice to the Lessor of Termination
• Auto Lease Registration Fees
• Notification of Replacement Vehicle or Sale by Lessee
• Servicemembers Civil Relief Act (SCRA) Eligibility Statement

In short, if you are a military serviceperson, take the time to review your rights and obligations under the Servicemembers Civil Relief Act.

How to File A Claim

First, the service member must return the vehicle within 15 days of the leasing company receiving the envelope.

The lease is terminated once the leasing company has the notice and the car. The leasing company may not ask for an early termination fee. However, all amounts due on the lease through the termination date must be paid. Again, that may include taxes, vehicle registration fees, and any damages to the vehicle. The leasing company also must refund any lease prepayments made within 30 days of the termination.

A leasing company can challenge the termination by going to court to try to prove that the servicemember’s orders did not permit a termination, that military service did not affect the servicemember’s ability to pay the lease payments (if, for example, the servicemember was wealthy or receiving money from other sources) or that the dependent does not qualify for SCRA protections.

A leasing company may not repossess a vehicle or terminate a lease of an active servicemember without a court order if the servicemember signed the lease before active duty began. Violations of this rule can result in fines and imprisonment.

Under most circumstances, a vehicle lease cancellation under SCRA is straightforward and easy. However, the servicemember must supply the proper documentation.

Be cautious when repossessing any vehicles. Always check the lessee’s military status first. Depend on the Servicemembers Civil Relief Act Centralized Verification Service to help you get the necessary documentation.

Final Note

Serving your country is an honorable and noble pursuit. That’s why the Servicemembers Civil Relief Act exists: to provide military members with special protections from a variety of civil obligations, including motor vehicle leases. Knowing your rights and understanding what you need to do to terminate your lease will ensure that you can fulfill your military obligations without worrying about the financial consequences. It is important to remember that you have rights, and you should take advantage of them whenever necessary. Good luck!

FAQs

Is there a termination fee for SCRA?

No, there is no termination fee under the SCRA.

Does the SCRA apply to vehicle leases?

Yes, the SCRA applies to vehicle leases.

Can the military cancel a car lease?

Yes, the SCRA stipulates that a service member is allowed to cancel a lease without paying termination fees.