Lease Payoff Total Loss Question
Lexus Fanatic
Joined: May 2012
Posts: 68,764
Likes: 4,083
From: Maryland
Odd indeed. Ins policy is an issue. Not your question, but can co consider depreciation of auto so new...maybe so, prob not. Fact is, one sold and yours, it cash value is decreased.
Assuming ins co agrees it owes full cost amt (65K) it most sensible for carrier to pay off debt, and pay you difference. The ticky part is the ins co will want title cert signed both by you, and release of lien by lender.
PERHAPS...idea is for ins co, to release lien, then send title to you to sign to the ins com. and then you get paid.
What you need to understand is: the you, the insurance company and the lender do not all have your offices in the same building, much less the same town or state. Call and talk to both the ins co and the dealer...and when you have clear understanding, email all and be sure to write to proper person, give auto vin, the ins policy number...everyone involved need to be on the same page.
Assuming ins co agrees it owes full cost amt (65K) it most sensible for carrier to pay off debt, and pay you difference. The ticky part is the ins co will want title cert signed both by you, and release of lien by lender.
PERHAPS...idea is for ins co, to release lien, then send title to you to sign to the ins com. and then you get paid.
What you need to understand is: the you, the insurance company and the lender do not all have your offices in the same building, much less the same town or state. Call and talk to both the ins co and the dealer...and when you have clear understanding, email all and be sure to write to proper person, give auto vin, the ins policy number...everyone involved need to be on the same page.
This is a lease, not a loan. The OP does not own the car and thus does not have to sign the title.
Lexus Connoisseur
Joined: Mar 2001
Posts: 19,886
Likes: 604
From: USA
The cost of the vehicle right now is still $65k. It's not the residual $35k, which is the car after I assume 3 years. Thus, Lexus wants $65k for the vehicle not the $35k residual. Unfortunately, the $25k down payment that you paid is to essentially "rent" the vehicle. From my understanding you lose that money, and that's why it's not good to make a large down payment.
Driver School Candidate
Joined: Mar 2021
Posts: 48
Likes: 20
From: Ohio
There is a large amount of misleading information in this thread. If one were to read the lease contract, it clearly will spell out what happens when the vehicle is totaled or if the lessee wants to pay off the lease before term. One thing will not be to pay the lease company the MSRP of the vehicle which is more than the amount the vehicle was capitalized for to begin with. In addition, the lessee owns the insurance policy...not the lease company. The lessee should be fully aware before the settlement is finalized.
The lessor is entitled to the residual value in the lease. The lessor has charged the lessee interest on the residual value for the term of the lease and it was collected in the single payment. They also calculated interest on the declining balance between the residual and the capitalized cost of the vehicle on the lease. The lessee is entitled to a refund on this interest and a percentage of the unused funds already paid. Again, the methodology is clearly stipulated in the lease contract by law.
I have a degree in leasing, have leased thousands of cars, and owned lease companies. Take your lease contract to your accountant and have him do the calculations contained in the contract to find where you actually stand financially before agreeing to any settlements. In actuality, your insurance company should have the capacity to do these calculations before they pay anything as well.
The lessor is entitled to the residual value in the lease. The lessor has charged the lessee interest on the residual value for the term of the lease and it was collected in the single payment. They also calculated interest on the declining balance between the residual and the capitalized cost of the vehicle on the lease. The lessee is entitled to a refund on this interest and a percentage of the unused funds already paid. Again, the methodology is clearly stipulated in the lease contract by law.
I have a degree in leasing, have leased thousands of cars, and owned lease companies. Take your lease contract to your accountant and have him do the calculations contained in the contract to find where you actually stand financially before agreeing to any settlements. In actuality, your insurance company should have the capacity to do these calculations before they pay anything as well.
Lexus Connoisseur
Joined: Mar 2001
Posts: 19,886
Likes: 604
From: USA
There is a large amount of misleading information in this thread. If one were to read the lease contract, it clearly will spell out what happens when the vehicle is totaled or if the lessee wants to pay off the lease before term. One thing will not be to pay the lease company the MSRP of the vehicle which is more than the amount the vehicle was capitalized for to begin with. In addition, the lessee owns the insurance policy...not the lease company. The lessee should be fully aware before the settlement is finalized.
The lessor is entitled to the residual value in the lease. The lessor has charged the lessee interest on the residual value for the term of the lease and it was collected in the single payment. They also calculated interest on the declining balance between the residual and the capitalized cost of the vehicle on the lease. The lessee is entitled to a refund on this interest and a percentage of the unused funds already paid. Again, the methodology is clearly stipulated in the lease contract by law.
I have a degree in leasing, have leased thousands of cars, and owned lease companies. Take your lease contract to your accountant and have him do the calculations contained in the contract to find where you actually stand financially before agreeing to any settlements. In actuality, your insurance company should have the capacity to do these calculations before they pay anything as well.
The lessor is entitled to the residual value in the lease. The lessor has charged the lessee interest on the residual value for the term of the lease and it was collected in the single payment. They also calculated interest on the declining balance between the residual and the capitalized cost of the vehicle on the lease. The lessee is entitled to a refund on this interest and a percentage of the unused funds already paid. Again, the methodology is clearly stipulated in the lease contract by law.
I have a degree in leasing, have leased thousands of cars, and owned lease companies. Take your lease contract to your accountant and have him do the calculations contained in the contract to find where you actually stand financially before agreeing to any settlements. In actuality, your insurance company should have the capacity to do these calculations before they pay anything as well.
I looked up the terms on my old Lexus lease.
Section 23 states that Toyota Lease Trust is the Loss Payee, not the lessee or the insurance policy holder.
Section 26 lays out refunds of fees to the lessee.
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