When it comes to car loans or any auto financing option, there might be a few steps you need to take if you relocate before paying off the vehicle or your lease is up. For military members, since there’s a higher likelihood that you’ll move at some point, it’s especially important to be informed about its effect on car loans.
Here are some key points to research if you’re car shopping or financing your car, and you think deployment or relocation is in your immediate future.
Know Your Benefits
In most cases, it’s somewhat of a challenge to get out of a lease without paying penalties. However, military members have a bit more flexibility. The Servicemembers Civil Relief Act (SCRA) allows active duty service members to end their auto lease without early termination charges or a penalty, according to Consumer Financial Protection Bureau. Provide a copy of your military orders and return your vehicle, and you may be responsible for other outstanding fees.
Check With Your State DMV
If you find out you have to move during your military service, you’ll have some research to do since the rules vary by state. According to Military.com, some states don’t require you to change your vehicle registration if you’re on military orders. For others, military members might be exempt from registration and license plate fees or discounts, but they still have to make those changes. Find out what the rules and requirements are in your new location so you can plan accordingly.
Plan to Make a Car Insurance Switch
When relocating, you’ll have to find a new car insurance company. Contact your current insurer to see if they provide coverage in your new location. If not, take the time to shop around. Just know, for any car loans or leases you have, inform the companies of any changes made to your policy.
Learning how to handle your car loans is just one of the many things you’ll need to do if you’re a military member who relocates frequently. Speak with your lenders directly, research your new state DMV rules, and take advantage of the military resources and benefits you have to make sure there aren’t bumps in the road ahead.