Using SCRA To Break A Vehicle Lease

Using SCRA to break a vehicle lease.

The Servicemember’s Civil Relief Act (SCRA) is a great law that provides protections so that military members do not suffer extraordinary financial hardship as a result of their military service.  While SCRA is often discussed when talking about terminating leases for houses and apartments, the SCRA also has provisions for the termination of vehicle leases.  As always, there are rules and right ways for using SCRA to break a vehicle lease.

Under the SCRA, active duty military members and certain activated reservists and National Guardsmen may terminate vehicle leases if they meet the criteria listed in the law.  As always, the SCRA lays out the provisions for how the termination has to occur in order to qualify under the law.

Who Is Eligible?

Military service members or their dependents who lease a vehicle for personal or business purposes are eligible to terminate the lease using the provisions of the SCRA if:

a)  the lessee enters the military, or, if a reservist or National Guardsman, is called to active duty for a period of time of 180 days or more, or

b)  the lessee service member who leases a vehicle within the Continental United States (CONUS) then receives orders for a Permanent Change of Station (PCS) move to a location Outside the Continental United States (OCONUS), or receives orders to deploy for a period of 180 days or more.

What Do I Need To Do?

In writing, notify the lessor (the person who is leasing you the vehicle) of your intent to terminate your lease under the provisions of the SCRA, and attach a copy of the orders that give you the right to terminate the lease.  The notice may be delivered in person, through a delivery service, or through the United States Postal Service.  The law does not require, but I suggest, that you obtain a signed receipt for the delivery of the notice.

Within 15 days of the notice, return the vehicle to the lessor.  The lease is terminated on the day that you turn in the vehicle. Once again, the law does not require a signed receipt, but it would make sense to get some sort of verification that you’ve turned in the car.

The SCRA does not specify any concessions for excess mileage or excess wear on the vehicle.  Generally speaking, you would want to return the vehicle in good condition and within the mileage specifications of your lease, pro-rated for the term that you actually had the car.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.