FORT LEE, Va. (Feb. 23, 2012) -- There are many headaches military members have to deal with when purchasing or leasing a vehicle. High interest rates and pushy salesman often make for a miserable experience. There is, however, another issue many Soldiers do not even contemplate until it is too late. What happens when you receive PCS orders for an overseas assignment and your lender prohibits you from shipping your new vehicle?
The problem is not often discussed but is fairly common. After making monthly payments on a new vehicle, military members about to PCS overseas discover they need permission from their lender to ship their vehicle. When military members ask permission, they receive an emphatic no. This leaves them with the choice between selling the car fast (and likely cheap) or continuing to make payments on a vehicle sitting on the other side of the Atlantic.
Military members may only discover this problem when they take the car to a local shipping port but cannot ship the vehicle without a letter from their lender stating they have permission to do so.
Lenders are often uncomfortable with allowing a vehicle that is not fully paid for to go overseas. Once the car leaves the United States, the lender has fewer options to repossess the vehicle. Many lenders anticipate this issue by placing a clause somewhere in the small print of an auto loan contract prohibiting the vehicle from being shipped overseas regardless of the situation.
Although military members are offered a lot of protections through acts of legislation like the Service Member's Civil Relief Act, there are no protections in this situation. Before taking out your next auto loan, please consider ahead of time what you will do if you are stationed overseas while still owing money on a vehicle. Lenders may be understanding of the potential for military members to move overseas, but this should be worked out before taking out the loan and not when it comes time to ship your POV.