Key facts
| Fact | Detail |
|---|---|
| SCRA interest cap on pre-service car loans | 6% a year, during active duty |
| Time to ask a lender for the cap after leaving service | Up to 180 days |
| Orders needed to end a car lease under the SCRA | Service or deployment of 180 days or more, or certain moves overseas |
| Time to return a leased car after giving notice | 15 days |
| Storage and towing liens | Cannot be enforced during service or for 90 days after without a court order |
| Car insurance premiums | Set under state law; the SCRA summaries we reviewed do not cover them |
Who the SCRA covers
According to the Consumer Financial Protection Bureau (CFPB) and the Justice Department, the SCRA protects:
- active-duty members of the Army, Navy, Air Force, Marine Corps, Coast Guard and Space Force;
- Reserve and National Guard members on federal active duty;
- National Guard members called up under federal orders for more than 30 consecutive days;
- commissioned officers of the Public Health Service and NOAA on active duty;
- in some cases, dependents and co-signers on a servicemember's loan.
Most protections begin on the day active duty starts. For reservists, some begin when certain orders are received.
SCRA protections that apply to your car
| Protection | What it does | How to use it |
|---|---|---|
| Interest rate cap | Interest and most fees on loans taken out before active duty, including car loans, are capped at 6% a year while you serve; the lender must forgive the excess, not defer it | Send the lender a written request with a copy of your orders, during service or up to 180 days after |
| Car lease termination | Lets you end a car lease early without an early-termination charge if your orders qualify | Give the leasing company written notice and a copy of your orders, then return the car within 15 days |
| Repossession | A creditor needs a court order to repossess a car during service if you paid a deposit or at least one installment before entering service | Tell the lender you are on active duty; contact a legal assistance office if they act anyway |
| Storage and towing liens | A storage or towing company cannot enforce a lien during service or for 90 days after without a court order | Show your orders to the company |
| Default judgments | A court must appoint a lawyer for you before entering a default judgment, and the case can usually be paused | Relevant if you are sued, for example after a crash, while you cannot respond |
Which car leases qualify
Under the federal statute (50 U.S.C. 3955), you can end a car lease used by you or your dependents if:
- you signed it before entering service and then received orders for 180 days or more of service; or
- you signed it while in service and then received orders for a permanent change of station from the continental US to a location outside it (or from a state outside the continental US to anywhere outside that state), or for a deployment of 180 days or more.
The CFPB points out that a move between two locations inside the continental US does not qualify. The leasing company must refund lease payments you made in advance for the time after the termination within 30 days, but you still owe taxes, title and registration fees and reasonable charges for excess wear and mileage.
What the SCRA does not do
The Justice Department and CFPB summaries of the SCRA do not list any rule on car insurance premiums, cancellations or coverage. Car insurance is regulated by the states, so your rights during a deployment come from your state's insurance laws and from your policy. If you think a lender, leasing company or insurer has ignored your rights, a base legal assistance office can help, and the Justice Department enforces the SCRA.
Storing a car during deployment
If no one will drive your car while you are deployed, you may be able to lower your premium without cancelling the policy. State insurance departments in Texas, North Carolina and Maryland give similar guidance:
- Suspend rather than cancel. The Texas Department of Insurance (TDI) explains that suspending coverage keeps the policy in place, so you avoid a lapse. You cannot file claims for coverages that are suspended.
- Liability only if the car is truly off the road. TDI says you can suspend liability coverage only if the car is stored so no one else can drive it. North Carolina's insurance department notes that its law requires liability insurance while a car is registered and has tags, so drivers there turn in their tags first. Insurers call this arrangement "vehicle storage."
- Keep comprehensive. Maryland's insurance administration advises keeping comprehensive coverage active so the car is still protected from weather, natural disasters and damage by others. North Carolina's insurance commissioner also discourages suspending it. Comprehensive covers theft, fire, hail and flooding while the car sits.
- Check with your lender. If the car is financed or leased, the lender usually requires collision and comprehensive. Maryland warns not to suspend those without the lender's written agreement.
| Coverage | Stored car, no one driving | Why |
|---|---|---|
| Liability | Suspend only if the car is off the road and your state allows it | Some states, such as North Carolina, require liability while a car is registered |
| Comprehensive | Usually keep | Covers theft, fire, hail, flood and vandalism in storage |
| Collision | Often suspend, unless a lender requires it | The car is not being driven |
| Uninsured motorist, medical payments, PIP | Often suspend if allowed | These apply to driving and riding in the car |
| Rental reimbursement and roadside assistance | Usually suspend | Not needed while the car is stored |
Steps before you deploy
- Call your insurer and ask whether it offers a storage or deployment option, and which coverages you can suspend.
- Check with your state DMV whether you must keep liability while the car is registered, or whether to surrender plates.
- If the car is financed or leased, get the lender's agreement in writing before changing coverage.
- Arrange premium payments for the whole deployment, such as automatic payments, and note any renewal date that falls while you are away.
- Consider giving a trusted person a power of attorney so they can deal with the insurer for you.
- Store the car somewhere secure and keep the storage address on file with the insurer.
- Before you drive again, call the insurer to restore full coverage.
Coverage lapses and coming home
Letting a policy lapse can cost you later. TDI warns that insurers may charge more if you had a coverage gap longer than 30 days, and some insurers refuse drivers with gaps. That is why the Texas department points to suspending coverage, which keeps the policy in force, rather than cancelling.
Some states protect returning servicemembers. Maryland's insurance administration says insurers there cannot refuse to renew, cancel or raise premiums for military personnel returning from overseas active duty only because they did not keep continuous coverage, unless the gap began before the overseas assignment. Ask your state insurance department whether a similar rule applies where you live.
Stationed in another state
When you move on permanent change of station orders, your insurer needs to know where the car is now kept, because location affects the price. If you register the car in the new state, you will usually need a policy that meets that state's minimum limits. Compare requirements with our state minimums tool and read car insurance for new residents. If you keep the car registered in your home state, check with your insurer that the policy still covers it where you are stationed.
Car insurance overseas
Overseas postings have their own insurance rules, set by the host country and the US military command, and a US policy may not meet them. In Germany, for example, the US Army garrison in Wiesbaden explains that personally owned vehicles are registered with US Army Europe, and that you need proof of insurance meeting German minimum coverage before the car can be registered. Some US insurers have offices there or work with local companies, and German insurers also write policies.
Before you ship a car or buy one abroad:
- contact the vehicle registration office at your new installation for the list of accepted insurers and documents;
- ask your US insurer whether it can cover you in that country, and what happens to your US policy while you are away;
- keep, suspend or cancel US coverage only after checking your home state's registration rules.
Veterans
The SCRA's protections end with active service, apart from a few that run for a short time afterward, such as the 180-day window to request the interest cap and the 90-day protection from storage liens. After that, veterans buy car insurance like other drivers. The NAIC notes that some insurers give discounts for membership in certain organizations or for working for certain employers, so ask each company you compare whether military service or veteran status earns a discount. Our discounts guide and guide to shopping at renewal can help.
Frequently asked questions
Does the SCRA lower car insurance rates?
No. The Justice Department and CFPB summaries of the SCRA list no protections for car insurance premiums. The law caps interest on pre-service car loans at 6% and protects car leases and repossessions, but insurance pricing follows state law and each insurer's rules.
Can I cancel my car insurance while deployed?
You can, but suspending coverage avoids a lapse. Cancelling creates one, and insurers may charge more after a gap longer than 30 days. Some insurers let you suspend coverages on a stored car while keeping comprehensive. If the car stays registered, your state may require liability.
Can I break my car lease if I deploy?
Yes, if your orders qualify. The SCRA lets you end a car lease without an early-termination charge if you deploy for 180 days or more, receive certain permanent change of station orders outside the continental US, or signed the lease before entering service. Give written notice with a copy of your orders and return the car within 15 days.
Do I need insurance on a car in storage?
Insurance regulators in Maryland and North Carolina advise keeping at least comprehensive, which covers theft, fire and weather damage. Whether you can drop liability depends on your state: some require it as long as the car is registered. A lender will usually require collision and comprehensive on a financed car.
Does my US car insurance cover me overseas?
Generally you need coverage that meets the host country's rules. In Germany, for example, proof of insurance meeting German minimums is required before a car can be registered with US Army Europe. Ask your insurer and your installation's vehicle registration office before you go.
Can my insurer raise my rate because my coverage lapsed while I was deployed?
It depends on the state. Maryland, for example, bars insurers from cancelling, refusing to renew or raising premiums for military personnel returning from overseas active duty solely because of a gap in coverage, unless the gap started before the assignment. Ask your state insurance department about the rules where you live.
Sources
- CFPB, The Servicemembers Civil Relief Act (SCRA) who is covered, interest cap, auto lease termination, repossession, default judgments
- U.S. Department of Justice, Servicemembers: Financial and Housing Rights motor vehicle leases, repossession, interest cap, who is covered
- U.S. Department of Justice, Know Your Rights: A Guide to the SCRA storage and towing liens
- 50 U.S.C. 3955 (Cornell LII) qualifying car leases, notice, return and refunds
- Texas Department of Insurance, Military servicemembers: what to know about insurance suspending coverage, liability on stored cars, lapses
- North Carolina Department of Insurance, insurance tips for military members vehicle storage, tags and liability, keeping comprehensive
- Maryland Insurance Administration, Consumer Advisory for Military Personnel keeping comprehensive, lender consent, returning from overseas duty
- Delaware Department of Insurance, Insurance Issues for Military Personnel arranging payments and power of attorney before deployment
- NAIC, A Consumer's Guide to Auto Insurance membership and employer discounts
- Military OneSource, USAG Wiesbaden: Motor vehicles registering and insuring a car in Germany
Last reviewed by the StateCover Guide editorial team. See our editorial policy. Spotted an error? Tell us.