vraa

iTrader: (2)

Guys, I'm in a very confusing situation

I had a 2021 RX450h that was a total loss even before I got the plates

I did a one time lease pay of ~25k$. Car was 65k$. Residual is around 35k$

LFS wants the full 65k$ from my insurance company, and then over payment will be sent to me after two weeks

Insurance company says this is a little odd

Why wouldn't LFS just take the 35k$ residual value? They said if all I send is the payoff/residual value - they won't release the title

SW17LS

Yep, this is how it works. This is why putting money down on leases and one pay leases aren't a great idea...

vraa

iTrader: (2)

Thank you for your input @SW17LS

Damn that sucks though

I don't think I'll lease or buy another Lexus after this

SW17LS

Has nothing to do with Lexus, that’s how leasing works, every carmaker is the same. The leasing company owns the car, so when there is a total loss they get paid. When you pay a bunch of money down or pay the lease in one shot, you are beholden to them to get whatever scraps are left over after they get paid by the insurance company.

The solution to this is not to put anything down and pay monthly. If a car is totaled the lease is ended, so your liability to them is only whatever payment you just made that month.

vraa

iTrader: (2)

I think that makes sense to me, but I don't get why the one time lease doesn't count towards the full settlement of the car? If at the end of the lease term I can just pay the residual / payoff amount to receive the title why can't I do it in a total loss scenario?

Och

iTrader: (3)

I had a 335i coupe that was flooded by hurricane Sandy with one month remaining on the least. The flood happened on October 30, the car was due for return on December 1st. I called BMW, they advised me to just make that last payment, and then my insurance directly paid them the buyout price, and I also got about $5k from the insurance as the blue book value of the car was 5k higher than the buyout price. I would talk to the insurance company first.

vraa

iTrader: (2)

My insurance company finds it very odd that LFS wants the full settlement amount, not the payoff / residual amount. I thought it'd be a similar situation as yours @Och - especially considering with a one time lease payment I have no more payments to do

Och

iTrader: (3)

Makes no sense at all, especially that if you wanted to buy the car out right now you would only have to pay the payoff. Maybe LFS misunderstands your situation? That being said, I don't think LFS will try and scam you out of your money, they are not some shady used car lot.

4TehNguyen

iTrader: (1)

no GAP insurance?

vraa

iTrader: (2)

GAP doesn't apply here because insurance is paying out more than the car was worth, I got the car down to about 58k$, agreed value was 58k$ with insurance and insurance said they will do market value or agreed value - whichever is higher and market value came back at 64k$, so insurance is willing to cut me a check of 64k$

My hang up is why LFS wants the full price of the car (65k$) instead of the residual / pay off amount (35k$), since I already paid for the one time lease up front (25k$)

Seems like it would've been better for me to just ignore the total-loss part, tell lexus I'm going to do the payoff, and then deal with the insurance company solo

I understand LFS will send me the overpayment (full price minus payoff) but that'll take weeks, and honestly I don't trust them, they do feel like a shady car lot.

I am not going to lease another Lexus after this and I don't think I'll be buying another Lexus at all

Och

iTrader: (3)

Maybe you should speak to someone higher up at LFS, sounds like the person who was assisting you is not competent. They are a huge financial institution, I don't think they are out to scam people.

What happened with the car, accident?

Och

iTrader: (3)

If I were you I would just take the check from insurance now. You have the 35k buyout price from Lexus on your contract, and your lease is prepaid, so you owe them nothing at this point. You can pay them the buyout price when your lease comes to the end.

vraa

iTrader: (2)

https://www.clublexus.com/forums/rx-...-tree-1-a.html

I tried multiple reps from LFS, same story

The only problem with keeping the money and waiting for the end of the lease is Copart / insurance company needs the title

My insurance company even said they are willing to send the payoff to LFS and the rest to me, LFS said they would not release the title if they did not get the full settlement

Och

iTrader: (3)

That's pretty insane, I guess you have no choice then. At the very least, get the details of your refund from LFS prior to them getting your insurance settlement. Are they only keeping the buyout amount and sending you the difference? Or are they trying something shady to get overpaid?

mmarshall

I admit I'm not an expert at leasing, but vraa has an interesting point. If the vehicle was 65K new, and got totalled with a 35K residual, why wouldn't the leasing company get the 35K? I don't see where they would be entitled to the full 65K, just because that was the sticker-price. All vehicles depreciate. Seems to me the LFS wants to have its cake and eat it, too...more than the lease-contract (or leasing laws) would dictate under the circumstances.

And if they DO get the full 65K, as I see it, they would owe vraa a refund for the the difference between what he paid (the full two or three-year lease) and what he would have paid up to that point with normal monthly payments. Vraa cannot be expected to eat the full 2 or 3-year lease amount and then not have use of the vehicle for those 2 or three years....he paid for that 2 or 3-year use.

Am I missing something? That just seems like simple math.