Termination of Auto Leases under the SCRA

The Servicemembers Civil Relief Act (SCRA) gives servicemembers the right to terminate motor vehicle leases under some circumstances:

    • Anytime after entry into active duty service, or anytime after the servicemember receives call to duty orders for 180 days or more, or anytime after entry onto active duty for a period of less than 180 days and where that period of duty is later extended to 180 days or more;
    • In the event of a permanent change of station (“PCS”) from a location in the continental United States to a location outside the continental United States, or from a location in a State outside the continental United States to any location outside that State; and/or
    • In the event of deployment with a military unit or as an individual in support of a military operation for a period of 180 days or more.

These protections also cover joint auto leases and termination by the servicemember also terminates the lease obligation for dependents under the lease.

If the servicemember wishes to terminate the auto lease under the SCRA, he or she must deliver written notice of intent to terminate and a copy of the military orders to the dealership or the dealership’s agent.  The military orders can be the official orders or any form of notification from the servicemember’s commanding officer.  The copy of the orders does not have to be delivered with the notice, but must be delivered prior to termination.  It’s best to deliver the notice in a way that can later be verified.  For example, if delivery is by hand, obtain a signed copy indicating the date it was accepted.  If delivery is by mail, use certified mail return receipt requested to verify that the notice was in fact received.  The vehicle has to be surrendered to the dealership no later than 15 days after the delivery of the notice.  The effective date of termination is the date on which the notice, orders and vehicle have been delivered to the dealership or its agent.

Note that termination of the lease under the SCRA is not “early termination,” but is instead a contract modification under federal law changing the termination date.  The SCRA does not allow the dealership to charge an early termination fee.  But keep in mind that the servicemember is still responsible for other costs under the contract, such as charges for any damage to the vehicle, taxes, and excess mileage.  If the dealership violates this provision of the SCRA, the servicemember has the right to file a civil lawsuit for damages and the court can order the dealership to pay costs and attorney fees related to the suit.

Contact the lawyers at Teske Katz Kitzer & Rochel to discuss any potential claim you may have.  Under the SCRA, you can recover monetary damages, costs and attorney fees, and possibly obtain other relief if you bring an action to enforce your rights.  Also, claims that are small individually, may be possible to bring as a class action.  This gives the servicemember the opportunity to not only vindicate his or her rights under the SCRA, but also to vindicate the rights of other military members that had the same thing happen to them.  Teske Katz Kitzer & Rochel offers confidential telephone consultations regarding potential SCRA claims.

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