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Prices Paid: Buying & Leasing Experiences Infiniti G35 G37 Lease Questions
3408 messages, Last post on Jul 24, 2008 at 4:09 AM
You are in the Prices Paid: Buying & Leasing Experiences Forum. Your Hosts are car_man & kyfdx
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Replying to: qbrozen (May 15, 2008 12:12 pm) Everyone on BimmerFest says you get them back... but, they are only using common sense (rare commodity in insurance circles...) I've yet to hear a real-world example from anyone over there.. |
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Replying to: skmiller22 (May 15, 2008 12:16 pm) I don't know your local stuff, but a quick call to your local clerk or DMV should get the answer - or see if they have a web page showing title and tag fees. The dealers almost never mark this stuff up so you are fairly safe letting the dealer's figure them. The only thing I have seen is some dealers charge a "notary fee" or "title processing fee" which is just an additional dealer "doc" fee with another name. One out of state dealer had the nerve to stick that on my paperwork one time. I reminded them they *I* would be going to the clerk's office in my state and paying the tax and doing the title work, so no way was I going to pay them for not doing it. The idea is to deal on price first, then plug it into a lease calc and see how it looks. Dealing from payments is a position of weakness for the lessee (you). Dennis |
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Wow! This is a daunting task, sifting through thousands of posts on this forum alone ;< Where ought I to begin? I want to lease a G35XS with navigation, which I test drove last Saturday. Hoffman Estates Infiniti pushed a "sweet spot" 39-month lease, 12K/yr, 1st month + plates up front, sales tax rolled into lease, and $627/month payments. Yes, I have leased before; great business write-off. But, everytime I do this, I have to relearn all of these calculations. Please, help me. Their numbers are WAY HIGH compared to what I see others across the country are paying for same car. What do you think?
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Having had some experience with property damage recovery, i can tell you first hand that the insurance company doesn't just pay the bank off what is owed to them or what they state is owed to them; nor do they run the numbers based on what the bank has as a deposit. They have an appraiser value the vehicle or run a valuation report and IF within reason pay off the loan amount. The only risk comes in when the appraisal of the vehicle is below the payoff amount. From my experience, this risk comes in 1 in 5 times, and it always happens when someone finances the vehicle at a very high rate of interest and the principal doesn't build quickly enough in the vehicle to satisfy the payoff amount which remains high. With IFS leases the risk only comes into play is when you have a high residual, and if by chance your vehicle is either stolen or a declared a total loss, the appraisal comes in below the actual payoff. This can happen in the early stages of the lease as the vehicle loses a lot of value immediately after you leave the lot. There are two ways to address this issue. First you can purchase gap insurance which i believe will insure one for the difference between what one would owe on a vehicle and what an insurance company says it's worth. Second, when you buy insurance coverage you need to check with your insurance carrier if the gap coverage is built into your premium. Good insurance companies will usually provide this coverage as part of their quote, but again you need to check with them specifically on this issue. Furthermore, i'm inclined to believe that IFS itself should provide this gap coverage on every lease or finance deal as they are exposed to this same deficit in capital if in fact one of their vehicles is involved in a collision where the car is totalled or stolen. I also don't believe that because you don't have a deposit in place you are less exposed to the same risk. Whether IFS has a deposit or not, if they are owed money they will come after your via legal avenues. So if you leased a car and your car is stolen 3 days later, why do you believe the person that doesn't have a deposit is any less responsible for the full value of the vehicle as the one who does? Just my 2 cents. |
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Replying to: dwynne (May 15, 2008 9:34 am) The example your brought up about ownership vs. rental is only half accurate. If you rent an apartment and paid $1,000 per month for the apartment and initially you had put up 2 security rent deposits to the landlord and then your apartment burns down would you also lose your security deposit? I don't believe so, because as long as you paid the rent timely, your deposit should be refunded if the apatment is not livable in and the landlord asks you to vacate.
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Replying to: brodway (May 15, 2008 6:34 pm)  . I agree with you - that is the way MSDs should work, but someone posted that they spent hours on the phone with IFS and was not it did not work that way, so they passed on an MSD lease. As I said before, if you can't get something in writing from IFS about how the MSDs are used, kept, and refunded I would not recommend that anyone do an MSD lease. Dennis |
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Replying to: helices (May 15, 2008 4:43 pm)
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Replying to: kyfdx (May 15, 2008 9:00 am) Lease car for $40K... making $4K in MSDs One month later, car is totaled. Insurance company values car at $35K. IFS says payoff is $35,500... ($39,500 - $4000 security deposit) IFS's payoff is not 35,500, it is 40,000 minus your first month payment. Shortage of $500 covered by GAP insurance. The purpose of GAP insurance is to cover the difference between the value of the vehicle and the payoff amount. $500 is an arbitrary number and is not an actual number, so i'm not sure where you received this information from. Insurance companies are regulated by the Department of Insurance, they can not reneg on a policy unless you are in violation of policy rules. $4000 in MSDs gone. Again, assumption. Call your insurance agent: "We paid fair market value for the car, what you owe on it is not our concern". (no diffferent than if you had a loan) This is true. They have to do an actual appraisal report. But they also have to keep you as a customer. They do their best to come up to the most reasonable fair market value with comparables. Call GAP insurance carrier: "We cover the difference between what the insurance company pays and what IFS says you owe." What you owe is the payoff amount, this doesnt involve the security deposit. If you put 10k in the bank and the bank burns down, does the bank give you a call and say sorry your money burned down and you no longer have any balances here? IFS like any other bank is regulated by the Banking authorities. They can't just take your money because they feel like it, what you are suggesting is flat out fraud as it is unsubstaniated by facts. Call IFS: "Your security deposits are security to make sure we get paid. That's what we used them for." No, what they use them for is to ensure that you don't bring the car back in horrible shape and do not pay them for the repairs. And it is also to give them assurance that in the event that you default on your loan, they have some added security that they won't lose as much on the vehicle. But lets compare an alternative scenario. You buy a car, you put up $2000 for upfront fees which involves first month payment, acquisition fee, motor vehicle fees, doc fees, etc. Car has a price tag of 40k and a payoff amount of 39,500. You crash into a tree the day after your picked it up off the lot. Now your insurance company pays off $35,000. IFS says hey brother, you still owe us $4,500 and if you don't pay us within 5 business days we take you to court. You wind up not paying and they put a lien on your house, your boat, your wife and your kids. Then they file a summons at the local court house and you find yourself scrambling to find an attorney that charges $1,500 just to show up to court. After you show up to court, the judge postpones the hearing because she had the runs from the chinese dinner she had the night before. So now the hearing is rescheduled for 2 months. The lawyer now wants another $500 to show up because time is money. So you make an appearance in front of the judge and the judge says why are we here today? IFS attorney says Mr. HOSTMAN owes us $4,500 for his lease. Judge says does defense have anything to add? So the rinky dink attorney you hired says no 'mam i think we are all clear here. So the judge rules in plaintiffs favor and you wind up paying $4500 back to IFS. So lets analyze this scenario. You put up $2k in initial cost that you lost. You paid $2k to the attorney who showed up in his fancy suit and did nothing, and you are now out another $4500 to IFS because in all fairness you still owe them their money. So you are out the same $4k that you would have in Multiple Security Deposits except you now lost countless hours of sleep, exhausted your vacation and sick days at work and you still dont have a car. My point is simple, just because you don't have a secrurity deposit in place doesn't mean you cant be sued or are off the hook for what you owe.
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Closing the Gap—With Gap Insurance Just when you thought you knew everything about insurance — along comes gap insurance. Though it may sound trivial, gap insurance is a must for leasing. And if you made a small down payment when buying a car, a gap policy can be lifesaver as well. But first, let's look at why it exists. As the name implies, gap insurance covers what traditional auto insurance doesn't. In other words, it closes the gap between what your insurance company pays if your car is stolen or totaled and what you owe the finance company. Let's take a test case. Say you bought your car two months ago for $25,000. You begin making payments at about $500 a month based on a 6 percent interest rate. Then, disaster strikes: a tree falls on your car and flattens it. You call the insurance company and it looks into its crystal ball and decides at the time of the accident your car was worth only $20,000. The car may only be a couple of months old, but it has already lost 20 percent of its value. Unfortunately, the finance company still wants the full amount you owe them. With interest, tax and license fees, they figure that to be $27,000. Yikes! There's a gap of $7,000 between the $20,000 that the insurance company is willing to pay you and the $27,000 the finance company is demanding. Most folks are going to be eating Spam dinners for the next two years, but if you have gap insurance you can safely order steak. Apply the same scenario to someone who bought their car. If they left the dealer lot without putting several thousand dollars down, they likely owe more than the insurance company will pay if the vehicle gets totaled or stolen in the first few years. Once again, gap coverage can save the day. And that's why gap insurance is a must for many drivers. In fact, gap insurance is usually mandated by lease contracts or included within them. If a gap policy is required but not included in your contract, you should shop around for this coverage (insurance companies sell it). If gap coverage is included in the lease, check to see how much is offered and how much you're going to be paying for it. (In some cases, lease contracts may include what is known as a gap waiver, which protects you from gap charges in the event that the leased vehicle is declared a total loss — eliminating the need for a gap policy.) Is gap insurance necessary for people who finance their cars? Well, it depends on your coverage. If your regular insurance policy is written to pay off the fully financed amount, then you don't need gap insurance. A few things to keep in mind when buying gap insurance: Although most people purchase it when a lease is initiated, some insurance companies will sell you a gap policy anytime during the lease term. You must be in compliance with all terms of the lease. Your gap insurance policy may not be honored if you don't have collision and comprehensive insurance coverage. Further, lease contracts generally require that you carry collision and comprehensive at all times. If your car is totaled, or stolen, carefully follow all requirements made by your insurance company. For example, some companies require you to continue making loan payments on your totaled car until the money from the gap insurance is paid out. So when initiating a car loan or lease, always remember to ask your insurance agent or loan officer about gap insurance. If you have an accident you'll be glad you planned ahead. |
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Replying to: ghstudio (May 15, 2008 6:53 pm) How do I learn to run the numbers myself? What are the required parameters? Residual? Interest rate? Invoice? What do I need to know? What need I do with that information, so that I am best prepared to negotiate the best possible deal? Thank you. |
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