Degradation caused by formation of hillocks is a problem when traditional aluminum thin film acts as the reflector of the novel automobile lamp in which light emitted diode (LED) serves as the light source. This degradation in lamp performance is attributed to the annealing effect caused by cyclic change of temperature. Thin Al–0.19–0.53 wt.% Sc alloy films prepared by magnetron sputtering are potential candidates for substituting pure aluminum films as the reflector due to their excellent optical reflectivity and corrosion resistance. The annealing effect on the morphology of Al–Sc thin films arisen from thermal cycle during the service of auto lamps is of interest. The films were heated from room temperature to 450 °C and cooled down to examine their surface morphology. Hillocks on the pure Al film could be dramatically reduced in Al–0.19–0.48 wt.% Sc films and their formation was completely inhibited in Al–0.53 wt.% Sc. Examination through scanning electron micrographs (FE-SEM) reveals that Al–0.53 wt.% Sc comprises nano grains that are much finer than those in other films. According to stress analysis on the film, we proposed a mechanism for interpreting the formation of hillocks on the Al film and their inhibition on Al-Sc films. Al–0.53 wt.% Sc thin film is suggested to be a candidate for reflectors in a LED auto lamp.