Total loss on X7 Lease and difference between Cash Value and Pay off

midavi68 · 01-19-2022, 04:16 PM

My insurance company has deemed my leased 2019 X7 as a total loss from an accident. The payoff on the vehicle is $54K. Actual Cash Value (ACV) is $84K. I was told by a couple of different people (unrelated to BMW) that typically insurance pays the leasing company and I get paid the difference between ACV and pay off which is $30K.

I spoke to BMW Financial Services this morning and they indicated that they keep the entire amount, so they would be profiting from the accident and I would not receive the overpayment to put it towards a new car. When I said I am willing to pay the payoff amount to purchase the car, they said it can't be done now that insurance contacted them about it being a total loss. Seems quite unfair.

Does anyone have experience with this and can provide guidance on how to resolve it?

Thanks...

calbears · 01-19-2022, 05:51 PM

My 2018 M3 was totaled. It was valued above the payoff amount. Insurance paid the payoff amount and I received the difference.

midavi68 · 01-19-2022, 06:25 PM

Quote:

Originally Posted by calbears

My 2018 M3 was totaled. It was valued above the payoff amount. Insurance paid the payoff amount and I received the difference.

Was yours a lease?

DSTJ99 · 01-19-2022, 06:30 PM

For $30k I would hire an attorney to review your lease document and write a letter to BMWFS.

760Lifan · 01-19-2022, 06:33 PM

If that's BMW Financial's POV, I would get a lawyer.

I'd LOVE to know what would legally entitle them to pocket in more money than what you would pay to obtain full ownership of the vehicle.

dmanb2b · 01-19-2022, 07:20 PM

Leasing does not equal ownership. BMWFS owns the vehicle as of the date of the accident, which you have insured and are renting from BMWFS. The contract, per your state law, should be clear if any of your lease down payment amounts are refundable in this unfortunate situation, but it is unlikely you will realize an insurance gain of $30K on an asset you do not own at the time of the incident.

Penguino · 01-19-2022, 07:26 PM

Until you have purchased the vehicle via a buy out, the vehicle remains under BMW. That's the way I understand it. However, it'd review if an insurance claim prevents you from executing your lease buy it out option. You are still paying for the lease I'm assuming? So the lease contract should be active.

I call BS on BMW and I'd encourage you to spend a few hours on a good attorney to review this for you.

I have sued BMW before and won.

If your lease payoff is $30K, you either pay a huge down payment or your lease had a brutal residual?

gatordent2007 · 01-19-2022, 07:27 PM

I’d go on bmw financial and pay the thing off lol.

midavi68 · 01-19-2022, 07:31 PM

Quote:

Originally Posted by Penguino

Until you have purchased the vehicle via a buy out, the vehicle remains under BMW. That's the way I understand it.

But, I'd encourage you to spend a few hours on a gold attorney to review this for you.

I have sued BMW before and won.

If your lease payoff is $30K, you either pay a huge down payment or your least what's a brutal residual. How is your payoff so low?

My lease payoff is $54k. That's what I would owe BMW if I wanted to buy the car right now. The insurance estimated the value of the vehicle to be $84K and that's what they are paying for a replacement.

I need to replace the car with a new one and it seems to me that as long as I pay what I owe to BMW the balance of $30k can be used for a new X7 rather than BMW profiting from an accident.

Penguino · 01-19-2022, 07:43 PM

Quote:

Originally Posted by midavi68

Quote:

Originally Posted by Penguino

Until you have purchased the vehicle via a buy out, the vehicle remains under BMW. That's the way I understand it.

But, I'd encourage you to spend a few hours on a gold attorney to review this for you.

I have sued BMW before and won.

If your lease payoff is $30K, you either pay a huge down payment or your least what's a brutal residual. How is your payoff so low?

My lease payoff is $54k. That's what I would owe BMW if I wanted to buy the car right now. The insurance estimated the value of the vehicle to be $84K and that's what they are paying for a replacement.

I need to replace the car with a new one and it seems to me that as long as I pay what I owe to BMW the balance of $30k can be used for a new X7 rather than BMW profiting from an accident.

Have the insurance send the check to you. It's an option. And you can do as you wish.

You should start the vehicle buy out process with BMW. They should not be refusing a purchase just because the vehicle was involved in an accident.

sbt007 · 01-19-2022, 07:44 PM

Unfortunately I believe this is how BMW finance operates (I have read of similar cases). As soon as the total loss is reported, the lease contract is terminated from their end. So there is no "buyout value" any more. They own the car, and take the proceeds of the insurance payout. Your obligations are to pay any missing amounts from the lease termination (normally leases are upside down, so gap insurance will cover it but in this used car market it is totally the opposite). If you made a down-payment on the lease, they will offer to return a prorated amount. But they will not agree to return the "equity". If you can get around this it will be great but I suspect they have a scenario covered in their lease agreement. Try logging into your account to see if you have a buyout amount any more. If they terminated the lease it is gone. Makes me wonder if I should by out my lease now because I also have a positive equity in my leased vehicle.

midavi68 · 01-19-2022, 07:56 PM

Quote:

Originally Posted by Penguino

Quote:

Originally Posted by midavi68

Quote:

Originally Posted by Penguino

Until you have purchased the vehicle via a buy out, the vehicle remains under BMW. That's the way I understand it.

But, I'd encourage you to spend a few hours on a gold attorney to review this for you.

I have sued BMW before and won.

If your lease payoff is $30K, you either pay a huge down payment or your least what's a brutal residual. How is your payoff so low?

My lease payoff is $54k. That's what I would owe BMW if I wanted to buy the car right now. The insurance estimated the value of the vehicle to be $84K and that's what they are paying for a replacement.

I need to replace the car with a new one and it seems to me that as long as I pay what I owe to BMW the balance of $30k can be used for a new X7 rather than BMW profiting from an accident.

Have the insurance send the check to you. It's an option. And you can do as you wish.

You should start the vehicle buy out process with BMW. They should not be refusing a purchase just because the vehicle was involved in an accident.

I spoke to the insurance company and they have to pay out to the 'owner' of the vehicle which in this case is BMW FS. I asked if they can just pay the pay off amount and the rest to me, they said no because of the BMW FS contract.

midavi68 · 01-19-2022, 07:59 PM

Quote:

Originally Posted by sbt007

Unfortunately I believe this is how BMW finance operates (I have read of similar cases). As soon as the total loss is reported, the lease contract is terminated from their end. So there is no "buyout value" any more. They own the car, and take the proceeds of the insurance payout. Your obligations are to pay any missing amounts from the lease termination (normally leases are upside down, so gap insurance will cover it but in this used car market it is totally the opposite). If you made a down-payment on the lease, they will offer to return a prorated amount. But they will not agree to return the "equity". If you can get around this it will be great but I suspect they have a scenario covered in their lease agreement. Try logging into your account to see if you have a buyout amount any more. If they terminated the lease it is gone. Makes me wonder if I should by out my lease now because I also have a positive equity in my leased vehicle.

I believe you're right. It's what they indicated. Once it is reported by insurance the car cannot be bought out. I don't know if that's for liability purposes or ??

Still doesn't make sense that they would want to profit from the situation rather than provide the difference to buy a new car.

Penguino · 01-19-2022, 08:15 PM

Quote:

Originally Posted by midavi68

Quote:

Originally Posted by sbt007

Unfortunately I believe this is how BMW finance operates (I have read of similar cases). As soon as the total loss is reported, the lease contract is terminated from their end. So there is no "buyout value" any more. They own the car, and take the proceeds of the insurance payout. Your obligations are to pay any missing amounts from the lease termination (normally leases are upside down, so gap insurance will cover it but in this used car market it is totally the opposite). If you made a down-payment on the lease, they will offer to return a prorated amount. But they will not agree to return the "equity". If you can get around this it will be great but I suspect they have a scenario covered in their lease agreement. Try logging into your account to see if you have a buyout amount any more. If they terminated the lease it is gone. Makes me wonder if I should by out my lease now because I also have a positive equity in my leased vehicle.

I believe you're right. It's what they indicated. Once it is reported by insurance the car cannot be bought out. I don't know if that's for liability purposes or ??

Still doesn't make sense that they would want to profit from the situation rather than provide the difference to buy a new car.

Attorney.

stockguru · 01-19-2022, 08:39 PM

The insurance company will only pay out the title holder. In a lease, that's the financing company. You have no chance of getting paid unless you can clear title.
You should review lease agreement to see if there is anything in there that covers this situation to allow or prohibit you from buying out. You'll need to work this out with bmw financial and get your title cleared which could take a couple of weeks. Not sure if that works timing wise for you.

midavi68 · 01-19-2022, 08:58 PM

Quote:

Originally Posted by stockguru

The insurance company will only pay out the title holder. In a lease, that's the financing company. You have no chance of getting paid unless you can clear title.
You should review lease agreement to see if there is anything in there that covers this situation to allow or prohibit you from buying out. You'll need to work this out with bmw financial and get your title cleared which could take a couple of weeks. Not sure if that works timing wise for you.

When I called them they said that once the car is reported as a total loss by insurance then a buyout is off the table. Still doesn't make sense as to why they would want to keep more than what they are owed.

Kivilig · 01-20-2022, 01:43 AM

That sucks,
A bit off topic, but I am curious how bad the accident was that they deemed the car total

CarMan77 · 01-20-2022, 04:58 AM

This is disappointing. My parents had a leased Volvo totaled and Volvo was paid off and my parents received the difference.I guess this is why they say do not put any money down on a lease

midavi68 · 01-20-2022, 08:07 AM

Quote:

Originally Posted by Kivilig

That sucks,
A bit off topic, but I am curious how bad the accident was that they deemed the car total

Total repair costs were over 65% of the car's value.

davecraze · 01-20-2022, 08:40 AM

Quote:

Originally Posted by midavi68

Total repair costs were over 65% of the car's value.

Jeez - a 50k+ repair? Wow - I hope the passengers were ok and not injured. If they weren't, that seems to say a lot for the safety of the vehicle even in a horrific crash.

Jakerx · 01-20-2022, 09:11 AM

Quote:

Originally Posted by davecraze

Jeez - a 50k+ repair? Wow - I hope the passengers were ok and not injured. If they weren't, that seems to say a lot for the safety of the vehicle even in a horrific crash.

If you add the value of each individual part of a car purchased separately, it’s three if not five times more than the sticker value of the car.

Combine that with labor and a $50K+ repair on a luxury vehicle with Gucci electronics and safety features everywhere…you begin to see how $50K isn’t all that much.

640ibimmerguy · 01-20-2022, 09:47 AM

Ok so what if the car were only worth 30k and the lease payoff were $50k, would BMW eat that? I don't think so. Also, if you were to have traded the car in, you would've been able to keep the difference, that's not BMW's money. I'd hire an attorney.

01-19-2022, 04:16 PM	#1
midavi68 Enlisted Member 7 Rep 35 Posts Drives: x7 Join Date: Nov 2019 Location: CA iTrader: (0)	Total loss on X7 Lease and difference between Cash Value and Pay off My insurance company has deemed my leased 2019 X7 as a total loss from an accident. The payoff on the vehicle is $54K. Actual Cash Value (ACV) is $84K. I was told by a couple of different people (unrelated to BMW) that typically insurance pays the leasing company and I get paid the difference between ACV and pay off which is $30K. I spoke to BMW Financial Services this morning and they indicated that they keep the entire amount, so they would be profiting from the accident and I would not receive the overpayment to put it towards a new car. When I said I am willing to pay the payoff amount to purchase the car, they said it can't be done now that insurance contacted them about it being a total loss. Seems quite unfair. Does anyone have experience with this and can provide guidance on how to resolve it? Thanks...
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01-19-2022, 05:51 PM	#2
calbears Colonel 4241 Rep 2,484 Posts Drives: 2018 F80 M3 CS,2017 F87 LBB M2 Join Date: Jan 2017 Location: Bay Area iTrader: (0) Garage List 2011 M3 [10.00] 2017 M2 [10.00] 2018 M3 CS [10.00]	My 2018 M3 was totaled. It was valued above the payoff amount. Insurance paid the payoff amount and I received the difference. __________________ 2018 F80 M3 CS 2017 M2, LBB, DCT, exec, car play, MPE, diffuser 2011 E90 M3 ZCP Past: E90 328i, F10 535i, F80 M3 (murdered)
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01-19-2022, 06:30 PM	#4
DSTJ99 Second Lieutenant 77 Rep 205 Posts Drives: '20 X7 40i - Tanzanite/Coffee Join Date: Dec 2012 Location: Philly Burbs, PA iTrader: (0)	For $30k I would hire an attorney to review your lease document and write a letter to BMWFS.
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01-19-2022, 06:33 PM	#5
760Lifan Major 451 Rep 1,115 Posts Drives: 2022 4xe Summit R & Trailhawk Join Date: Apr 2013 Location: Land O Lakes, FL iTrader: (0)	If that's BMW Financial's POV, I would get a lawyer. I'd LOVE to know what would legally entitle them to pocket in more money than what you would pay to obtain full ownership of the vehicle. __________________ Gone: 2020 X7 M50i, Mineral White, Ivory White Full Merino, Piano Black Trim, Cold Weather, Dynamic Handling, Driving Assistance, Luxury Seating, Executive, 22" Y-Spoke Orbit Grey Wheels Style 758i, Space Saver Spare, Trailer Hitch, Leather Dash, Ambient Air, Bowers & Wilkins, Rear Entertainment, Night Vision, Extended Shadowline, Alcantara Headliner in Upholstery Color.
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01-19-2022, 07:20 PM	#6
dmanb2b Banned 2123 Rep 3,368 Posts Drives: G07, F97, F30, E90, E46, E30 Join Date: Jul 2016 Location: NY iTrader: (5)	Leasing does not equal ownership. BMWFS owns the vehicle as of the date of the accident, which you have insured and are renting from BMWFS. The contract, per your state law, should be clear if any of your lease down payment amounts are refundable in this unfortunate situation, but it is unlikely you will realize an insurance gain of $30K on an asset you do not own at the time of the incident.
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01-19-2022, 07:26 PM	#7
Penguino Lieutenant Colonel 1604 Rep 1,605 Posts Drives: A car. Join Date: Dec 2009 Location: Here iTrader: (5)	Until you have purchased the vehicle via a buy out, the vehicle remains under BMW. That's the way I understand it. However, it'd review if an insurance claim prevents you from executing your lease buy it out option. You are still paying for the lease I'm assuming? So the lease contract should be active. I call BS on BMW and I'd encourage you to spend a few hours on a good attorney to review this for you. I have sued BMW before and won. If your lease payoff is $30K, you either pay a huge down payment or your lease had a brutal residual? __________________ "Beware of false knowledge; it is more dangerous than ignorance."
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01-19-2022, 07:27 PM	#8
gatordent2007 Lieutenant 174 Rep 431 Posts Drives: 2020 x7 M50i Join Date: Aug 2012 Location: Clearwater, Fl iTrader: (1) Garage List 2016 BMW 750xi [0.00]	I’d go on bmw financial and pay the thing off lol.
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01-19-2022, 07:44 PM	#11
sbt007 Major 625 Rep 1,093 Posts Drives: 2021 X3 M40i Join Date: Feb 2012 Location: CA iTrader: (0) Garage List 2021 BMW X3 M40i [10.00]	Unfortunately I believe this is how BMW finance operates (I have read of similar cases). As soon as the total loss is reported, the lease contract is terminated from their end. So there is no "buyout value" any more. They own the car, and take the proceeds of the insurance payout. Your obligations are to pay any missing amounts from the lease termination (normally leases are upside down, so gap insurance will cover it but in this used car market it is totally the opposite). If you made a down-payment on the lease, they will offer to return a prorated amount. But they will not agree to return the "equity". If you can get around this it will be great but I suspect they have a scenario covered in their lease agreement. Try logging into your account to see if you have a buyout amount any more. If they terminated the lease it is gone. Makes me wonder if I should by out my lease now because I also have a positive equity in my leased vehicle.
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01-19-2022, 08:39 PM	#15
stockguru Second Lieutenant 87 Rep 217 Posts Drives: BMW X7 Join Date: May 2020 Location: NYC iTrader: (0)	The insurance company will only pay out the title holder. In a lease, that's the financing company. You have no chance of getting paid unless you can clear title. You should review lease agreement to see if there is anything in there that covers this situation to allow or prohibit you from buying out. You'll need to work this out with bmw financial and get your title cleared which could take a couple of weeks. Not sure if that works timing wise for you.
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01-20-2022, 01:43 AM	#17
Kivilig Private 59 Rep 87 Posts Drives: X7 M50i Join Date: Sep 2021 Location: New Jersey iTrader: (0)	That sucks, A bit off topic, but I am curious how bad the accident was that they deemed the car total
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01-20-2022, 04:58 AM	#18
CarMan77 First Lieutenant 425 Rep 378 Posts Drives: 2021 X7 M50i, 2021 Porsche Cay Join Date: Apr 2012 Location: Maryland iTrader: (0) Garage List 2022 Porsche Cayenn ... [0.00] 2023 BMW X5M [0.00]	This is disappointing. My parents had a leased Volvo totaled and Volvo was paid off and my parents received the difference.I guess this is why they say do not put any money down on a lease
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01-20-2022, 09:47 AM	#22
640ibimmerguy Private 23 Rep 76 Posts Drives: 2016 BMW 640i GC Join Date: Mar 2019 Location: Memphis iTrader: (0)	Ok so what if the car were only worth 30k and the lease payoff were $50k, would BMW eat that? I don't think so. Also, if you were to have traded the car in, you would've been able to keep the difference, that's not BMW's money. I'd hire an attorney.
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