echelone

Thanks for all your opinions.

It was a horrible accident in a highway. It was my fault because I didn't step on the brake in time when the other car was braking and I was changing lane to that vehicle. I'm still in shock of what have happened. My car spunned a few times and the other car flipped over. Everyone in my car got out safely though, fortunately and the lady in the other car suffered only minor injuries. Thank God for that.

I know downpayment has always been a bad idea for leasing, but I had to because of my credit history.

I actually put down $6000 to reduce my cap cost with $3800 MSDs (those should come back).

I've talked with Lexus financial, and they said my downpayments are pretty much going to be lost. I still haven't talked to my insurance company yet regarding the lease issue since I'm still waiting for them to send an adjuster to the towing lot. The capitalized cost of the car is $35k, so Im hoping in the worst case scenario AAA will be able to give me a check more than that, should the car be considered total. This car is less than 2 weeks old and gross cap cost was $41k.

Here is a picture of the car's front right, which suffered the most damage. I am not too sure if the rear part of the vehicle is damaged but I noticed the wheel gap on the right rear wheel has decreased significantly.



Do you guys think this is considered as a total loss?

echelone

Regarding GAP insurance, when I signed my lease the finance manager told me that all leases through Lexus Financial has GAP coverage.

I have confirmed this again with Lexus Financial today, hopefully that's something new to some ppl.

tqlla3k

iTrader: (1)

no, that is wrong. A lease calculates interest owed over the time you own the car. If you pay it off early... you dont owe that interest.

A lease is just another way of buying. So you will never owe more than the purchase price of the car(except for the first month... where you owe interest+the cost of the car)

About the car damage. Its doesnt look like 40K worth of damage to me. Make sure you get it repaired at the place the dealer recommends so that you dont owe depreciation on the car when you turn it in.

O. L. T.

iTrader: (17)

This may seem bad, but you know what's worse? .........if they decided to fix it and give it back to you. That car'd likely never drive solid again.

ff_

Would the security deposits come back? I'm not sure how the MSD's work.

Also, that doesn't look like much damage at all. Maybe some subframe damage, suspension, a few fenders and hood, bumper assembly, front airbags, and perhaps a few simple engine bay components. Looks like a fairly minor collision (from your perspective), although still not terribly cheap to fix. Are you sure the car's going to be totalled?

SolaraToIS

One very positive thing I have noticed from all the pictures of crashed ISs
is that the car is designed to be very safe for those inside.

DASHOCKER

iTrader: (2)

Another vehicle can be substituted in the place of the vehicle if it is a total loss, only if you agree to a substitution by the dealer. There is no additional cost to you if you recieve a replacement as this was a leased vehicle. Contact your salesperson and he or she will fill you in..

doug_999

I agree - I think they want something crazy like 80% damage before they total it. I don't see $32K in damage there. I'm betting they fix it - which to you is probably the best outcome you could get (least money out of pocket and you don't have to worry about selling it down the road and Lexus will just take it back).

I agree and disagree with OLT's comment. I don't think the car will drive the same again, but I don't think it will be unsafe or not solid. A lot of it depends on the body shop. A guy here in the office did about the same damage to his RX-8 and it is PERFECT since being fixed(one year and counting now).

LeslieRC

While I admit that I don't understand leasing, I have reviewed lease agreements. In this connection, I'm certain that it's not, as you state, another way of buying a car. A lease is a rental.

I have read elsewhere on this forum about people who wished to get out of their leases and wanting to know their options. Generally, the first instructions given were that they are obligated to pay-off the lease, based on the terms of the contract. In other words, using the hypothetical example of a 24 month lease at payment of $500/month, they must pay $12,000 AND return the vehicle in reasonably good condition (or be liable for paying for wear and tear).

My point under the circumstances here is that this unfortunate (and lucky to be unharmed) individual can quickly ascertain what their liability is under their lease agreement by calculating their lease payments (number of months leased times monthly lease payment) and then add that amount to the determined residual value of the car (which should also be set forth in the lease agreement). Of course, under normal circumstances the car is returned at the end of the lease and all that is owed under the contract are the lease payments.

LeslieRC

Get Out of Car Lease? Break a Lease? End a Lease? Terminate a Lease? Exit a Lease Early? It's All the Same Thing

As you probably already know, getting out of a car lease is not as easy as getting in. Quitting a lease means backing out of an original agreement that provided for low payments over a fixed number of years. Those low payments are only possible if the lease is completed as agreed.


There are a number of ways
In order to end your lease ("early termination"), you can pay the lease company what you still owe and return their car. At least, that's one way to do it but not necessarily the best way.

The reason that this might not be the best way to get out of your lease is that the amount you owe on your lease can be much more than you might have anticipated, due to the way in which the lease company calculates your early termination charges. Most people are very surprised when they learn just how much they owe.

Actually, you have a number of possible options for getting out of your lease, some of which will be better for you than the others. You're looking for the option that will save you the most money and trouble, and protect your credit rating.

Lease transfer is one way
One your best options may be to transfer your lease to someone would like to pick it up and take it off your hands — a lease assumption. The advantages of this method is low cost (no penalties, no payoffs), and easy exit.

There's a whole set of potential buyers out there who are looking for short-term leases without going through dealers and the associated extra costs.

However, you need to follow the correct process and check to see if your lease company allows it. You can't simply let someone assume your lease without the lease company's knowledge and involvement.

The good news is that help is available.

There are a number of specialized lease transfer companies on the Internet who will list your car and help with the lease assumption process for a small fee -- a fee that is much smaller than a lease company's early termination fees. Since these companies work directly with the lease company and handle all the paperwork, the process is easy and painless.

Although there are a number of good companies out there, the lease transfer company that we recommend is Swapalease . They are very reputable, have been in business for years, and have helped thousands of people out of their leases.

Get an instant free quote on the cost of listing your car so that interested "buyers" might see it. You'll also be told immediately if your lease company or bank allows transfers so that you'll know right away if this is going to work for you.

Also get a "buyers" viewpoint on this topic by reading our article, Short Term Leasing.

There are other ways too
Since the lease transfer solution is only one way to end a lease and it doesn't work out for everyone, we have provided a comprehensive how-to article, "Lease Termination Guide" in our popular Lease Kit that contains a detailed explanation of all the other ways to end a lease, with examples, and instructions on how to determine the best option for your particular lease situation.

tqlla3k

iTrader: (1)

Hmmm, you dont understand leases. My old IS350 was a lease, then I bought it out. The cost of my buy out was not all the payments+residual. The cost of the buyout was.... the cost of the car + interest.

What I described earlier is correct. What you have described is incorrect.

To get out of a lease early, you pay the amount owed on the car-the Trade in value. Thats the penalty. Normally the trade in value is less than the amount owed on the car.

Or you can buy the car outright, in which you pay the amount owed on the car(Price of car+fees+ Interest-payments).

What you have talked about in the above post is Turning in the car early to break a lease. What the OP is talking about is buying himself out of the lease. Obviously he is not turning in a wrecked IS350.

LeslieRC

This issue fascinates me, so please forgive me for continuing to engage this point.

I did some research on the Federal Reserve Board's website - they actually have a lot of good information about car leasing! Here's what I found out:

Early termination charges if your vehicle is stolen or totaled. When your vehicle is stolen or totaled, your deficiency or surplus will be determined by comparing your lease payoff amount with the settlement proceeds from your insurance company. If there is a surplus, you may receive a refund. Check your lease agreement to determine the refund policy. However, in most cases there will be a deficiency.

Many lessors offer gap coverage to reduce or eliminate your early termination deficiency when the early termination is caused by your vehicle's being stolen or totaled. There are two types of gap coverage. One is a waiver by the lessor of the gap amount after an insurance casualty loss. The other is a contract with a third party, which may be an insurance company, to cover the gap amount. With either type of gap coverage, you are usually responsible for your insurance deductible and any other amounts deducted from the insured amount of the vehicle by your insurance company. Gap coverage typically applies only in the event of a total vehicle loss through casualty or theft covered by your insurance policy and a determination that the vehicle is a total loss.

Gap coverage does not usually apply to the past-due payments owed for periods preceding the loss or to any fees or costs owed on the lease, such as late fees or parking fines. Also, gap coverage may not apply if you have breached the terms of the insurance policy or the lease. The lessor's waiver typically will not apply in the event of a loss through forfeiture or confiscation by a government agency. You may be responsible for continuing your monthly payments until the lessor receives the insurance proceeds.

This is from "MSN Money":

Without gap insurance, you'll have a 'total' nightmare
Many lease contracts include gap insurance -- coverage that will pay the difference between what you owe on your car lease and what the insurer pays in case your car is "totaled." Your insurer has the option of either "totaling" your vehicle -- paying you or the lienholder the actual cash value of the car -- or repairing the vehicle after a bad accident. (Insurers generally will total the car after damages surpass 70% of the vehicle's worth.) If your insurance company totals your leased car, whether or not you receive the insurance proceeds directly is of little consequence. Chances are good that you'll have to turn all of that money over to the lienholder, but that's no guarantee you've satisfied your lease contract.

It's not uncommon to still owe money to your lienholder after turning over the "total" insurance proceeds. That's where gap insurance comes in to play. It will pay the remaining lease bill so you can start fresh with a new lease or a new financing deal. If your lease contract does not include gap insurance, it's a good idea to shop around for the best price. Gap insurance premiums run the gamut, but without it, you could be stuck with hefty payments on a car you no longer drive, plus the payments for your replacement car. Ouch!

Per the FRB:

Gap amount
In the event a leased vehicle is stolen or totaled, the difference between the early termination payoff amount, not including any past-due amounts, and the amount for which the vehicle is insured before the insurance deductible and any other policy deductions are subtracted. The definition of gap amount may vary in different states or in different lease agreements.

In conclusion:

I am not saying that your points are incorrect, or that mine are correct, but based on what I've researched, it would appear that for situations where a leased car is "totaled", the lessee (the person who signed the lease agreement) is still obligated to make good on the lease payments under the lease and that those payments are factored into the amount that is owed to satisfy the lessor's claim.

RON430

Without trying to enflame anybody, I do think there are some misconceptions here. A lease is a lease, not a purchase. There is almost always a price named in the original lease that allows you to purchase the car at the end of the lease but it has no effect on the lease. This is a business transaction. The lease company owns the car. They always own the car. They look at the amount of time you want to drive the car, they estimate the vehicles value at the end of the lease with normal wear and tear and the agreed upon miles and they then price out your lease payments building in various factors including your creditworthiness and their profit, and the agreement is struck. Ideally you are only paying for the portion of the life of the car that you use and their reasonable profit, that is what you agreed to when you signed the lease. The reason they don't want to let you out of the lease is because their profit is based on the time value of the money. In a roundabout way this is why most people are recommending that you never put down a lot down on a lease, it defeats the whole purpose of the lease and generally makes just a sweeter deal for the lease company. The lease company make this deal to get money from you over the life of the lease. When you come back early, they still want the profit that you agreed to pay them at lease inception.

At the end of the lease they have gotten your payments and they get the car back with no more miles than you agreed to put on it (because this impacts resale value) and with no more than normal wear and tear (which also impacts resale value) because it is their car. You can avoid making payments on above usual wear and tear by buying the car at the previously agreed to price or you can pay for whatever they may assess. The three leases I have done describe everything down to the minimum tread depth left on the tires.

Car insurance typically does not make any provisions for excess financial burden you may have agreed to in a financial transaction, whether lease or financed purchase. If you have a loan on the car, the lender is named as the vehicle owner as they are. In a lease, you name the lease company as the vehicle owner because they are. If the car is totalled, the insurance company should make the check out to the vehicle owner which will be the lease company. The lease company will look at the size of the check and the lease terms and determine if you get anything back or owe them anything. The lease agreeements I have seen that are written by a bucket full of attorneys normally have provisions for most possibility so rather than getting chat board guesses, you should make a thorough read of the agreement. I doubt you will find any wiggle room to negotiate, the terms as presented to you and understood by you will just be enforced. I find that most people can understand these documents very well without being lawyers. When they need a lawyer is when they are trying to make an argument to get around the contractually agreed upon terms, and yep, that's what lawyers do.

Information is your friend in this deal so you want to see if your bank can get you a value on the vehicle as it was on the day of the accident because that is the most you would get from the insurance company if it is totalled. But all of this is really putting the cart before the horse. When I have had accidents, adjustors make very quick decisions whether to total the vehicle or cut you a check to get it repaired. If they are going to repair it, just keep making the lease payments, which you agreed to do, get the car fixed, and motor on. If they are going to total it, get the value, read the lease and figure out what your obligation is going to be. The lease company would like something, whether anyone thinks it is justified or not, by setting this all up and getting you the car. They weren't driving it when the accident occured. If you have supplemental insurance and they total it, make sure you know what you may be entitled to and once again, I would recommend not determining that in any chat room. All that we are doing here is voicing opinions from our experiences and they may have absolutely no bearing on your situation. States have different laws to enforce leases and that can make a difference and I never totalled a leased car of kept it at the end of the lease, you tend to want to get the heck away from bimmers after three years.

AsianGirl007

iTrader: (1)

echelone, sorry to hear about the accident and glad to hear you're okay.

You can get part of, if not all of the down payment, back to lease a new one. I forget what it's called but I had a customer tell me he did it when he had experience similar to yours. I remember because I was surprised to hear of it. He told me as he was leasing another car from me 2 months after the last one. He negotitated with Lexus Financial and the insurance company. It's not money they just want to hand over so you will have to make some phone calls.

Good luck and you might even be able to negotiate a slightly better deal from dealer as it's your second car from them!

tqlla3k

iTrader: (1)

In a lease you dont buy the car, you do rent it. But it is very similar to a purchase, which is why I said its another way to buy a car.

Think of it as a way of buying a car, except you trade it in at the end. No hassles and few surprises. So lets say you buy a 40K car. This is only with LFS as a reference, because they are the only ones I know.

So you Lease a 40K car. And you owe 2K in taxes+500 in lease aquisition, and 200 in Dealer proc. You roll everything into the lease. So you owe 42.7K. Your payments are $675/36 per month and at the end you can buy out the car for 25K.

After day 1, you owe Lexus 42.700K+$284(8% interestfor one month) = $42984 Thats it. You do not owe 49,800. After you make the first payment, you owe 42984-675=$42315

At this point you can buy out your lease for $42315. You do not have to pay 49,175

The only time you get penalized for teminating your lease early is when you want them to take the car. After 1 month you owe $42315... but the car is worth 37K trade in. So your early terminiation fee is $5300... and probably they will punish you even more.

You can buy out the car without penalty, at least from Lexus financial. You just have to pay the buy out price. LFS also has auto gap insurance included