[PNWM3]

This is why you put as little down on a lease as possible. It’s got built in gap coverage and you can always make more money with the capital working for you somewhere else.

[PNWM3]

Originally Posted by hksr

Yes, NEVER put money down on a lease. It's foolish as you're just basically pre-paying lease payments.

But what if I want a lower monthly payment?

Confusing monthly cash flow management with good financial strategies is what holds back so many people from building wealth.

[midavi68]

Originally Posted by PNWM3

This is why you put as little down on a lease as possible. It’s got built in gap coverage and you can always make more money with the capital working for you somewhere else.

Good point. I like to have low monthly payments. I think the challenge here is a matter of principle and contract. BMW FS is revoking a right for purchasing the vehicle which is not stated in the contract That's all that's at play here from my view.

[Splatt115]

Originally Posted by midavi68

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...

That is inaccurate. The lease company gets the residual amount owed and you get what's left. Some people pay more per month and even place large down payments, that goes back to the buyer. I totaled a leased Ford and they cut me a check. The equation was they calculated the amount of my remaining payments and added the payoff amount after the lease ends per the contract. The lease company can not keep what's not owed, doesn't matter who the lease company is.

[rich5741]

I think OP is doing the right thing talking to an attorney. It may vary by state, and will be nuanced. As I put in a prior post, there is language in the lease agreement that addresses this - my non-lawyer interpretation is that BMW has the right to terminate the lease at the moment of the total loss (or notification of total loss). Although nothing that says how BMW must make this notification to you that they are electing to terminate the lease, or what happens if you buyout before notifying BMW that there is a total loss.

You = BMW, Me/I = Lessee

“ 25. Vehicle Loss or Damage. I agree to immediately notify you if the Vehicle is damaged or destroyed in an accident, stolen, abandoned, or taken by a police or other governmental agency. If the Vehicle is damaged and you do not terminate this Lease because the Vehicle is reasonably repairable, I agree to make the repairs in accordance with Section 20 above at my expense. If one of these events occur and there is a total loss of the Vehicle, you reserve the right to terminate this Lease and my liability will be for the following: (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. The actual cash value shall have the same meaning as under my insurance policy. If the insurance coverage on the Vehicle required by this Lease is not in effect as of the date of loss, the actual cash value shall be the Vehicle’s average retail value as quoted in the then current edition of NADA’s USED CAR GUIDE for the geographical region in which the Vehicle is located, plus applicable taxes. If the vehicle is stolen or destroyed, another vehicle may be substituted in its place only if you agree to the substitution. You have no obligation to provide a substitution vehicle.”

[Al Pinã]

Originally Posted by PNWM3

But what if I want a lower monthly payment?

Confusing monthly cash flow management with good financial strategies is what holds back so many people from building wealth.

If you put $10K down on a lease and total the car that money is gone forever.

[xlover]

Originally Posted by Al Pin　

If you put $10K down on a lease and total the car that money is gone forever.

+1 on this, it is an unusual market we are in today. 99/100 times the car will be worth less than the remainder on the lease and that down payment disappears or even in a situation like this where the lessee cannot access the equity, the down payment is lost

OP I would dig into the contract in detail but I believe the terms do call for upon total loss the lease terminated… obviously there to protect the buyer from the reverse situation, where the car is totaled and bmw wants to keep collecting payments

[midavi68]

Originally Posted by xlover

+1 on this, it is an unusual market we are in today. 99/100 times the car will be worth less than the remainder on the lease and that down payment disappears or even in a situation like this where the lessee cannot access the equity, the down payment is lost

OP I would dig into the contract in detail but I believe the terms do call for upon total loss the lease terminated… obviously there to protect the buyer from the reverse situation, where the car is totaled and bmw wants to keep collecting payments

I called and escalated the problem to the boss's boss. You are correct. They terminate the lease upon total loss which revokes the right to purchase the vehicle at that point and the account is flagged as such.

[Brendan///M]

Originally Posted by midavi68

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.

How did this end up working out for you? Were you issued a $30k credit towards the lease account on the next car? I’ve heard they credit 50% but I called yesterday and was told they credit 100% of the overage.