Selling a car before or during a military deployment

What trips people up is timing. Orders land, the car stops running, and suddenly the title, the lender and the state's sale notice all need attention before you ship out.

First, work out what kind of car you have

The steps split three ways, and the right one depends on who holds the title.

• You own it outright. You sign the title over, file your state's sale notice if it has one, and deal with the plates.
• You're still paying a loan. No buyer can take the title until the lender signs off on its lien. The loan payoff guide walks through the payoff letter and any gap.
• It's leased. You don't own it, so you can't sell it. But the SCRA may let you end the lease early with no cancellation fee.

Leased car: ending the lease under the SCRA

Federal law, 50 U.S.C. 3955, lets you end a covered vehicle lease in two situations:

1. You signed the lease before entering service and then entered under a call or order of at least 180 days.
2. You get orders to deploy with a military unit, or as an individual supporting a military operation, for at least 180 days.

To use it, put the request in writing, attach a copy of your orders, and get both to the lessor or its agent. The CFPB lists the ways that notice can go: by hand, by private carrier, by certified mail with a return receipt, or by an electronic method the lessor names.

Then return the car within 15 days after the notice is delivered. The termination takes effect on the day both the notice and the return are done.

What it costs you, per the CFPB:

• No early cancellation fee. The lessor can't charge one for an SCRA termination.
• Some charges still apply. Unpaid taxes, title and registration fees, tickets, other outstanding fees, and excess wear or mileage charges due at the end of the lease.
• Prepaid money comes back. Lease payments made in advance must be refunded within 30 days of termination.

A leased car that has broken down is still the lessor's car. Return it; don't sell it.

Financed car: the loan comes first

The SCRA can make the loan cheaper while it's open. Under 50 U.S.C. 3937, debt you took on before entering service with interest above "6 percent" is capped at 6 percent, and interest above that is forgiven. For a car loan, the cap runs for the period of military service. It applies to debt from before service, not to a loan you signed while already serving.

If the car is dead and the loan is still running, compare the payoff figure with the offer for the car in its current state. If the offer covers the payoff, the sale closes the loan. If it doesn't, you cover the gap before the lien comes off.

Signing while you're away: a military power of attorney

You don't have to be stateside to sell. Someone you trust can sign the title for you if you give them a power of attorney before you leave.

Federal law makes a military power of attorney unusually portable. Under 10 U.S.C. 1044b:

• It is exempt from any state requirement of form, substance, formality or recording.
• It gets the "same legal effect" as a power of attorney made under the state's own law.
• It can be general or special, as long as it was notarized under section 1044a or other state or federal law.

Section 1044a extends military notary powers to judge advocates. That includes reserve judge advocates who are not in a duty status.

A special power of attorney limited to this one car, identified by year, make and VIN, that says your agent may sign the title and any sale paperwork, keeps the job narrow and clear. Leave the original title with the same person.

Registration and tax while you're stationed away

Some states have rules for service members that matter if the car sits for months before it's sold. Two examples from the agencies:

• Florida. If a registration will expire while you're deployed or stationed outside Florida, FLHSMV encourages renewing before you go. Residents may renew up to three months early. Florida residents deployed out of state may also insure a car that is kept out of state, by following the military insurance exemption steps in its Military Forms Packet. Non-resident members stationed in Florida may keep a current home-state plate (FLHSMV).
• Virginia. Active-duty members stationed in Virginia may drive on a valid license from their home state or country. Active-duty members domiciled in another state don't pay Virginia personal property tax, thanks to the SCRA (Virginia DMV).

File the sale notice before you leave

The sale notice is your record with the state that ownership has moved on. A notice you can file online from anywhere is the easiest one to finish before you go, or for your agent to file after the sale.

Which form you file, and how fast, depends on your state. The after you sell guide lists each state's sale notice and plate rules.

Fix it, store it or sell it

A deployment changes the math on a broken car.

Fixing makes sense when the repair is modest, the car is otherwise sound, and someone will drive it while you're gone or you'll want it the day you're back.

Storing makes sense less often than people think. A car that already doesn't run tends to get worse sitting, and the registration, insurance and any loan payments keep coming. If you do store it, check your state's rules on registration and insurance for a parked car first, as Florida's example above shows.

Selling makes sense if a repair bill would top the car's resale value, the loan payoff is close to what it will bring, or nobody at home wants to look after it. Selling before you leave also means you sign everything yourself and nobody needs a power of attorney.

A short checklist before you ship out

1. Find the title, or confirm the lender holds it.
2. If leased, send the SCRA notice with your orders and book the return.
3. If financed, get a payoff figure and an offer for the car, and compare them.
4. If you can't finish the sale yourself, get a military power of attorney and leave it with the title.
5. Sell, then file your state's sale notice and deal with the plates.

We buy whole non-running and junk cars, and you can sell the whole car as it sits, with free pickup anywhere in the US. If there's a loan, or someone will sign for you under a power of attorney, mention it in your offer request.

Questions before orders come through? Call (877) 421-6008.