Posted on 06/16/2021 6:16:22 PM PDT by know.your.why
Used car prices have apparently been on the rise.
Your leased car may have been worth more than the residual value on the lease before it got wrecked.
Sounds like the Insurance co. doesn’t have the value right.
Get the Ins. Co. to cough up the current market value, pay the last two lease payments, “buy” the car at the previously agreed upon residual value. PROFIT!
If you didn’t have gap insurance on the vehicle you may be liable for the difference your insurance company pays and what the vehicle worth was prior to the accident.
I used to lease a ton for the low monthly payments. I’ll never lease again. Buy your vehicle outright, drive a beater until you can pay cash for the vehicle you want. We did and then put the total of monthly payments to into investments. Best advice a friend ever gave me.
I'm not a lawyer but I suspect that just because there is a buyout option at the end of the lease doesn't mean that your lease payments are building equity in the car.
Have an attorney look over the lease contract. I suspect you don't have a claim. The vast majority of people who lease cars relinquish the vehicle at the end of the contract.
I gave up. I am fixing up my beater, I like older cars anyway...
Just found this doing a quick search. It’s short but may help with some of your questions.
https://www.ghandm.com/your-leased-car-is-totaled/
By the way, what makes you think the buyout is $14K? This is a lease, not a purchase, right?
Even after the car was totaled?
You expected to quit making the lease payments, right?
I am confused the reason we carry car insurance is for this reason WHY in the hell is the insurance company not paying the car off???
Best advice is have the dealer work it out with the insurance company; it's what you've been paying them for. You shouldn't be on the hook for anything buyout since that is not an option now.
They get the value of the car, which you say is $20k.
Your lease with them is a different matter. In a lease, you are paying basically the depreciation value you intended to use. You’ve got $14k left, and have paid some amount to date as well. Your lease may specify that they owe you a car to finish the remaining $14k of use. It may also state that in the case of a totaled vehicle that the lease terminates. This assumes a linear depreciation. Most leases I have had followed a linear depreciation schedule.
Oh, and every state has laws that govern auto lease contracts; I suggest you carefully review your lease agreement and compare its provisions with state law to find anything illegal.
When someone has hit my car, and I've had to get body work done, my insurance company authorizes the repairs, and then goes after the other insurance company to get their money back.
Back in 2011, my sister died. She'd been leasing a Toyota for about a year. While she was in hospice care, she told me to call the Toyota dealer, and get them to pick up the car since she wouldn't be using it anymore. When she had originally leased the car, she told the dealer that she had been diagnosed with cancer, was in remission, but that the cancer could return at any time...and asked him if there would be a problem if she had to return the car before the lease was up. Of course the dealer said it wouldn't be a problem.
I called the dealer about bringing the car back, and was told to call Toyota's financing department, which I did. They hemmed and hawed, and gave me a hard time. When I told my sister, she got pissed, and told me not to make any more payments on it. I ended up having to call Toyota several times, finally telling them that if they didn't come to get the car from her parking lot, that I would simply leave it somewhere, and they could look for it. A few days before the end of August, they sent a tow truck to take the car. My sister died September 2nd, her 69th birthday. Because I had her mail forwarded to my address, Toyota kept sending statements claiming she owed a few thousand dollars because she'd turned the car in before the lease was completed. I gave them the address where she was buried, and told them they could reach her there. They eventually stopped writing and calling, and because of the way they conducted themselves, I would never own a Toyota.
The leasing company owns the car. You were just paying to use it. In order to replace the vehicle they need $ equal to what a similar car in the same condition will (theoretically) cost them.
“I am confused the reason we carry car insurance is for this reason WHY in the hell is the insurance company not paying the car off???”
Insurance companies pay one of two things depending on what policy you buy: Either the value of the car at the time of the accident or the replacement cost to provide another one of similar features and condition regardless of cost. This is where gap insurance comes into play in the first case. You may owe more than the car is worth, and gap insurance covers that amount.
Gap insurance is highly recommended for vehicles that will depreciate fast or for long term loans or leases where the paydown is slower than the depreciation.
Then, in hindsight, you should have never told them it was totaled.
In a similar vein, never tell an insurance adjuster that you are uninjured before you get the settlement on the vehicle.
Always tell them your neck hurts until you have the check in your hands.
The insurance company should cover the book value of the car if it is totaled. What is the book value? Where did the $20,000 number from the lease company come from? Is that the book value of the car?
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