toyotatom

I don't agree 100% that this will happen this way. If you do a one pay lease on $50,000 car for example and say the you pay $18,000 to pay the lease off up front. The cap cost is somewhere around $ 32,000 give or take. If the car gets totaled a month later the insurance should pay the cash value of the car which for example purposes is $46,000 or so. I understand the lessor would get the check for the $46,000. Now they get that check and the $18,000 you paid on the lease which totals $64,000 for a car that only cost $50,000 to start. You don't think as a minimum the would put at least some of the excess toward a new lease or rebate the rest back to you. I believe they would

SW17LS

I think thats a huge risk to take because you have faith that LFS would do the right thing. I don't have faith in entities like LFS.

4TehNguyen

iTrader: (1)

check with your insurance agency also. But if you do get the gap from lexus you can cancel it pro rated if you read the terms on the back, so just in case you find it much cheaper elsewhere. I have the feeling its a lot cheaper with the car insurance company as dealer stuff is usually overpriced.

I bought gap insurance from the dealer, if i find its cheaper elsewhere I can cancel it get the pro rated difference. I put nothing down on my 3IS because of 1.9% @ 60 months. I've made a lot more in the stock market instead of dumping it in a down payment

FastTags

this should answer some of your questions. You can put $ down and with GAP you good to go.

Cash Value versus Replacement Value

Many auto insurance policies use cash value as the payout factor for repairs or replacement. Cash value is not the same as replacement value and it is important to understand the difference.

Cash value is based upon the actual value of the car at the time of the repair or replacement. In order to determine this amount, car insurance companies have databases of information on all of the various cars available on the road today. The database has information about the make and model of the car, original purchase price, average mileage and wear and tear. All of these factors determine the depreciated value of the car. This is what the actual cash value of the car is for the insurance company and what they will base any payouts on.

Depreciation is something that begins the moment you drive the car off the lot. Even if you were to decide to return the car the week following your purchase of the car, you would find that the car has depreciated in value simply because you bought it. Actual cash value insurance policy provisions take this into account.

Replacement value, on the other hand, is the actual cost to purchase another similar car. Often, this amount is based on what it would cost to purchase a brand new car. For example, if you drive a car that is 2 years old and get in an accident that totals the car, if you have replacement value coverage, then you would be reimbursed to go and purchase a new car.

Unfortunately, for many drivers, the actual cash value of the car is much less than what they owe on their car. If their car is totaled, the insurance company will pay off the cash value, but the car owner will be left with the balance between the cash value and the actual car loan to pay off on their own. Having car insurance that provides replacement value avoids this problem. However, replacement value coverage is also more expensive, so many car owners choose forego it.

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Gap Coverage

For individuals who are leasing a car, gap insurance coverage is also an option to make sure that they are fully covered for the entire value of the car. Very often, auto insurance for leased cars only covers the amount of the lease and not the total value of the car. If the car is totaled, however, the finance company will expect the person who leased the car to pay off the entire value of the car. Gap insurance provides coverage for this gap between the lease value and the purchase value of the car. Some lease finance companies require gap insurance as part of lease terms.

FastTags

I believe this is correct. I would advise to have Collision insurance for at least $50,000 just in case.

Lessor would send $18,000 back tot he lessee though ( I think). Unless, you agree to keep the car as is, or sell it as is, in that case the car is no longer owned by the BANK and you can collect the CASH $46,000. I think buying the car would be the best option as you guaranteed to get $46,000.

I had a similar situation with another car which I was leasing, the insurance owed me $1800 for collision, but they told me that they would have to send the money to the BANK and not to me since I did not own the car. The BANK told me they would not give me the money if they would receive $1800. The insurance told me that if I keep the car or even sell the car to which I have 2 years to do it, they will send the $1800 to me.

I sold the car, and sent them a transfer papers and got my $1800 in two days.

now that I think about it, GAP only covers the gap b/n the Insurance and what you owe to the BANK, so in the Example where the Insurance would pay $46,000 to the BANK, GAP is not even going to be used.