Ally lease and totaled vehicle

I had a total loss with Allstate as my insurer. I called Ally and they said my payoff is $34,400 good through December 9th. State Farm valued the truck at $42,000. So I thought I had some equity, thought wrong! State Farm mailed Ally a check for 42k, Ally told me it is their policy to keep the whole check! I made the down payment, the payments, the insurance, the higher premium for a lower deductible… All for them to keep the proceeds from that!! Doesn’t seem right.

What does your lease contract say?

Many specify that the owner of the vehicle keeps the equity… after all, their asset was destroyed. Makes sense they would get paid market value for their asset.

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What if there was negative equity, they should eat the loss of market value? No, I would have to pay. They have a payoff for a reason, that’s my option to buy it out… Not their choice at the end of the lease, so what difference if the lease ends because of lease maturity or total loss?

That’s how GAP works when you have negative equity.


And ally includes gap in their leases. It does suck but this is why we tell people not to put money down on leases. I saw someone last week lose like $10k they put down.

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No you wouldn’t. They do eat tge loss of market value due to the gap waiver.

Correct, that’s your option, not anyone else’s.

One involves you exercising your contractually obligated buyout option. The other does not.

It’s always a good idea to read the contractual terms of your lease before signing. You agreed to what would happen with insurance payments in the event of a total loss.

Wow I always thought if money is owed to the customer, they had to send difference back. Ally seems greedy! lol

Fixed that for you. If OP had crashed an Enterprise Rent A Car, then OP should not expect to get a check for any ‘difference’. Remember a lease is a glorified Rental, and hence the lessee doesn’t have any ownership.

Now there have been some lucky cases where the insurance company did pay the insured, but in most of the cases the insurance company pays the owner of the car, not the guy who bought the insurance. (Though it usually is the same person)

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Yeah cause when I totaled my wife’s Volvo, I got a check back from Volvo for like $2900 or something. Sucks regardless for OP

What insurance company btw? That is what makes the difference

Geico at that time. This was in 2018

Nah, what really makes the difference is the lease contract terms. Some specify the bank keeps the insurance overage. Some specify the leasee does.

If you could share the ones who do as my quick peruse of the common ones , only certain insurance companies do, not certain brands.