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BMW X7 (G07) Forums General BMW X7 Forum Total loss on X7 Lease and difference between Cash Value and Pay off

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      01-20-2022, 09:54 AM   #23
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I think the key detail here as noted above is that when leasing the lessee is not the owner of the vehicle.. they are just borrowing it for a fee
The insurance you purchase is technically not even your insurance you are doing it on behalf of the owner of the vehicle (as it is required in your lease contract that you purchase insurance for them)
This concept of the buyout tends to optically push ppl to think they have more of a "right" to the car than they actually do. For example bmw could just do leases without a buyout at all if they wanted to (in this market they could probably get away with it)

Another way to put it… if the car in question was a rental from hertz not a "lease" from bmw would the expectations be the same?
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      01-20-2022, 09:56 AM   #24
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Quote:
Originally Posted by midavi68 View Post
Was yours a lease?
Yes
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      01-20-2022, 09:59 AM   #25
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Quote:
Originally Posted by xlover View Post
I think the key detail here as noted above is that when leasing the lessee is not the owner of the vehicle.. they are just borrowing it for a fee
The insurance you purchase is technically not even your insurance you are doing it on behalf of the owner of the vehicle (as it is required in your lease contract that you purchase insurance for them)
This concept of the buyout tends to optically push ppl to think they have more of a "right" to the car than they actually do. For example bmw could just do leases without a buyout at all if they wanted to (in this market they could probably get away with it)

Another way to put it… if the car in question was a rental from hertz not a "lease" from bmw would the expectations be the same?
Good point but the main difference from my perspective is that a lease has a buyout whereas a rental doesn't.
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      01-20-2022, 10:03 AM   #26
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Quote:
Originally Posted by midavi68 View Post
Quote:
Originally Posted by xlover View Post
I think the key detail here as noted above is that when leasing the lessee is not the owner of the vehicle.. they are just borrowing it for a fee
The insurance you purchase is technically not even your insurance you are doing it on behalf of the owner of the vehicle (as it is required in your lease contract that you purchase insurance for them)
This concept of the buyout tends to optically push ppl to think they have more of a "right" to the car than they actually do. For example bmw could just do leases without a buyout at all if they wanted to (in this market they could probably get away with it)

Another way to put it… if the car in question was a rental from hertz not a "lease" from bmw would the expectations be the same?
Good point but the main difference from my perspective is that a lease has a buyout whereas a rental doesn't.
Ya you basically would have needed to send them the buyout check before they knew the car was totaled. The event is a contractual trigger to end the lease. Normally this would be a good thing, I doubt you would want to keep owing payments on a destroyed car.

The part here I don't get is your insurance company. They should only have to pay bmw the minimum unless in this market bmw is being more aggressive about collecting full value. Probably for simplicity of processing their policy is not to split payments.
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      01-20-2022, 11:33 AM   #27
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Quote:
Originally Posted by 640ibimmerguy View Post
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.
Effectively that is what happens, although BMW buys gap insurance to protect itself from that happening (or rather you buy it since its all part of the cost of the lease).

Additionally in NY, a lessee is not legally liable for the gap between cash value and lease termination value:

Quote:
26. New York Total Loss Notice. In the event of a total loss occasioned by theft or physical damage, I am not liable for an additional early termination charge nor am I liable for the difference between the Adjusted Lease Balance and the actual cash value of the Vehicle (the “GAP amount”). The actual cash value shall have the same meaning as under my insurance policy.
Remember this is a lease and not a financed purchase.

In the end it depends on the lease terms. If I look at my lease, it does clearly state in section 25 that if the car is a total loss then I owe

Quote:
(1) the actual cash value of the Vehicle as of the date of loss; plus (2) any amounts (including any Monthly Payments) that have accrued prior to the date of loss; plus (3) the deductible under my insurance policy
Since the lease also requires that I insure the car for "actual value (payable in cash and not by a replacement vehicle", residual value becomes irrelevant, since the insurance pays for condition #1 in the above. Without regard for residual being below or above that actual cash value.
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      01-20-2022, 12:39 PM   #28
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It would be nice if they would at least allow you to roll the $30k into a new car as a cap cost reduction vs. you taking a check and walking away from BMW/FS.
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      01-20-2022, 12:42 PM   #29
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Call your insurance company, they only owe for the amount of pay off on the lease to BMW Financial. They are no longer indemnifying them as a company but putting them in a better position than required. They should only pay to full pay off, if nothing else, it will keep BMSFS from profiting off you.
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      01-20-2022, 12:56 PM   #30
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BMW is probably desperate to recoup all the money they've lost over the years with their inflated lease residual values.

Sure, it kept their lease payments lower than the German competition, but good lord they were getting brutalized for decades at these lease turn-ins.
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      01-20-2022, 01:33 PM   #31
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Quote:
Originally Posted by dmanb2b View Post
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.
That's for sure.

It makes you wonder though why you are able to pocket in the equity if you surrender your lease early. In that scenario, it's still a lease, BMWFS owns the vehicle at the time you return it to the dealer, I was indeed renting it from BMWFS and yet, I still got a check.
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      01-20-2022, 03:30 PM   #32
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Quote:
Originally Posted by midavi68 View Post
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...
PAY ATTENTION PLEASE!!!!
This just happened to me from the IDA flood. Payoff was 92K, Geico was telling me 114k on the settlement. BMW said I could not purchase the car as I had notified them the car was flooded.
I Imediately logged onto my BMW app, printed out the odometer statement, cut a certified check to BMW, and had the title the next week. Geico was then legally obligated to deal with me only. Bmwfs WILL KEEP YOUR MONEY. They retain all equity in any leased vehicle. Do not hesitate, print out the odometer statement and cut a certified check at 9 AM tomorrow when the bank opens. Overnight it to them for Monday. You will have your title in seven days. Do not listen to anybody else who has not been through this.
PM me if any questions.
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      01-20-2022, 05:41 PM   #33
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Quote:
Originally Posted by billybarr View Post
PAY ATTENTION PLEASE!!!!
This just happened to me from the IDA flood. Payoff was 92K, Geico was telling me 114k on the settlement. BMW said I could not purchase the car as I had notified them the car was flooded.
I Imediately logged onto my BMW app, printed out the odometer statement, cut a certified check to BMW, and had the title the next week. Geico was then legally obligated to deal with me only. Bmwfs WILL KEEP YOUR MONEY. They retain all equity in any leased vehicle. Do not hesitate, print out the odometer statement and cut a certified check at 9 AM tomorrow when the bank opens. Overnight it to them for Monday. You will have your title in seven days. Do not listen to anybody else who has not been through this.
PM me if any questions.
Instead of a certified check, can't he just login to his online account and payoff via bank transfer? Might be quicker to settle the payment.
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      01-20-2022, 06:15 PM   #34
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Quote:
Originally Posted by X7NJ View Post
Instead of a certified check, can't he just login to his online account and payoff via bank transfer? Might be quicker to settle the payment.
I'm not sure the website allows a payment exceeding the total of the remaining lease payments. After all, in order to own and receive the title, it requires payment of those PLUS the residual.
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      01-20-2022, 06:29 PM   #35
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Quote:
Originally Posted by 760Lifan View Post
That's for sure.

It makes you wonder though why you are able to pocket in the equity if you surrender your lease early. In that scenario, it's still a lease, BMWFS owns the vehicle at the time you return it to the dealer, I was indeed renting it from BMWFS and yet, I still got a check.
It's because you are actually allowing the dealer to buy it into their inventory at trade-in value, which is higher than buy-out price. In OP's case, the insurance company has no reason to buy the car from OP unless they can take title.

Hopefully for OP's sake the buyout mentioned above is a way to benefit.
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      01-20-2022, 06:46 PM   #36
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Quote:
Originally Posted by dmanb2b View Post
Quote:
Originally Posted by 760Lifan View Post
That's for sure.

It makes you wonder though why you are able to pocket in the equity if you surrender your lease early. In that scenario, it's still a lease, BMWFS owns the vehicle at the time you return it to the dealer, I was indeed renting it from BMWFS and yet, I still got a check.
It's because you are actually allowing the dealer to buy it into their inventory at trade-in value, which is higher than buy-out price. In OP's case, the insurance company has no reason to buy the car from OP unless they can take title.

Hopefully for OP's sake the buyout mentioned above is a way to benefit.
+1 on this,

if the point above on just activating the buyout ASAP is accurate might be able to get the buyout processed before the right hand talks to the left
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      01-20-2022, 07:13 PM   #37
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Quote:
Originally Posted by dmanb2b View Post
It's because you are actually allowing the dealer to buy it into their inventory at trade-in value, which is higher than buy-out price. In OP's case, the insurance company has no reason to buy the car from OP unless they can take title.
Technically, the insurance company could do the exact same thing the dealer did. It's true though that they probably aren't interested in doing so.

I also hope the OP can pull that off. I would be frustrated as hell if I would lose that much money that way.
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      01-20-2022, 11:23 PM   #38
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Quote:
Originally Posted by billybarr View Post
PAY ATTENTION PLEASE!!!!
This just happened to me from the IDA flood. Payoff was 92K, Geico was telling me 114k on the settlement. BMW said I could not purchase the car as I had notified them the car was flooded.
I Imediately logged onto my BMW app, printed out the odometer statement, cut a certified check to BMW, and had the title the next week. Geico was then legally obligated to deal with me only. Bmwfs WILL KEEP YOUR MONEY. They retain all equity in any leased vehicle. Do not hesitate, print out the odometer statement and cut a certified check at 9 AM tomorrow when the bank opens. Overnight it to them for Monday. You will have your title in seven days. Do not listen to anybody else who has not been through this.
PM me if any questions.
I told them to log in and pay it yesterday! Should’ve listened to me and gotten the head start.
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      01-21-2022, 02:09 PM   #39
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Quote:
Originally Posted by CarMan77 View Post
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
Yes, NEVER put money down on a lease. It's foolish as you're just basically pre-paying lease payments.
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      01-21-2022, 02:41 PM   #40
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I agree, login NOW and start the process of paying it off.

BMWFS won't take a bank account payment for payoff. It has to be a certified check. I bet you could slip this in still.

Worst case, call the insurance company and tell them what's owed on the car so BMW can't profit from this (but don't do that until there is no way to pay off the car). They start cutting all this shit out from builds due to "supply issues" and now people can't get 1 percent off new cars from them? All while they post record profits…and now they want to basically make $30k off your insurance company? Make no mistake….you will pay in insurance premium increases for them ultimately paying $84k and not $54k…..yeah fuck these guys (BMW).
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      01-22-2022, 09:52 AM   #41
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Advice offered may vary dependent on your insurance company and state you are in.

I asked an insurance buddy of mine in California and he said that his company pays the equity to the customer and only pays the leasing company the balance owed and not the entire check.

If your insurance will only pay the whole amount to title holder and not split it, You might be able to get your insurance company to hold off on making payment by telling them you paid out the vehicle and are working to clear title. I don't think bmw can prevent you from paying off the vehicle as that's a right on your lease agreement.
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      01-22-2022, 09:55 AM   #42
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Quote:
Originally Posted by stockguru View Post
Advice offered may vary dependent on your insurance company and state you are in.

I asked an insurance buddy of mine in California and he said that his company pays the equity to the customer and only pays the leasing company the balance owed and not the entire check.

If your insurance will only pay the whole amount to title holder and not split it, You might be able to get your insurance company to hold off on making payment by telling them you paid out the vehicle and are working to clear title. I don't think bmw can prevent you from paying off the vehicle as that's a right on your lease agreement.
Agreed. I hired an attorney to read the contract and it doesn't say anything about exceptions for purchasing the car including total loss, however the agents for BMW FS say otherwise.
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      01-22-2022, 11:39 AM   #43
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Eager to hear how this all plays out in the end. Good luck!
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      01-22-2022, 11:52 AM   #44
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Eager to hear how this all plays out in the end. Good luck!
Thanks!
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