In that scenario, CarMax isn’t paying the full amount to BMW FS and BMW FS cutting you a check for the difference. CarMax is taking the extra step of sending BMW FS only what they are owed for the payoff and giving you the difference. In your scenario, the insurance company gave the full amount to BMW FS and BMW FS wants to keep the profit. It’s their car, they can do that if they want.
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The extra equity is so that the lessee can get back into a similar car in this current market, that is part of the insurance policy for the leasee.
Yes BMW owns the car, but the payout from the insurance isn’t only for the payoff of the car, it’s also for other losses.
The insurance company should have written two different checks.
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No because your lease has GAP insurance.
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I don’t have a BMW lease in front of me, but I do have a Hyundai lease from my Palisade.
It says:
“We are entitled to all insurance proceeds for physical damage to or loss of the Vehicle, even if the amount of the proceeds exceeds the Adjusted Lease Balance or other amounts you under this Lease. You also assign to us any other insurance proceeds related to this Lease or our interest in the Vehicle.”
Obviously different leases have different language.
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Yes, be grateful that you are safe and no one else was hurt.
It is a bummer you’re “losing” the equity but the car was never yours.
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I also would love an answer to this!
Can we please close the thread now? I find these threads more tiresome than the “I don’t know what I’m doing, what car btw $0-$50K should I lease?”
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I guess call BMW to payoff before you call insurance.
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This has been discussed before by @nyclife in a thread: Customer Car Totaled.... Insurance Claim higher than payoff
I think he was able to get some of the equity back for his client!
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Made me go look at my bmw lease agreements… IANAL, but I couldn’t find any specific language regarding settlement overpayments like the example you had. Probably coz BMW’s never had equity like this before and were always upside down.
Bear in mind the agreements could very well vary by state. 
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I had similar case with KIA 2 years ago when my car was totaled. Kia finance sent me a check for the difference between payoff and insurance payment they got. So I got like 1.5K from them.
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And then you have no GAP and don’t know how much your insurance will pay. Good luck! 
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Worst poster and thread ever?
If there’s nothing in the lease contract that speaks to this scenario then talk to a lawyer and get their opinion.
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Why calling to close this, this is perfectly normal question. When my i3 was totaled, GEICO sent check to BWW and there was also some equity, so that went to me directly. So I think it more about how insurance company handles this. If they they sent full amount to BMWFS, then seems you are screwed up…
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Meme please.
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This does raise an interesting question. If OP is not entitled to the proceeds if his totalled car is worth more than the payoff but the insurance company is still paying this money out, I’d say he was overinsured. The payoff # is a known amount. If this were me, I would want to be insured for that # and not a cent more. An insurance company should be able to write a cheaper policy if they knew that in the event the car is worth more than the payoff, they don’t need to pay that money out.
Of course this type of policy doesn’t exist but the answer here, based on the contract language (which is only sometimes enforced) is that you want to save money on the front end by getting a cheaper insurance policy that will never send the bank proceeds in excess of the pay off #.
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I agree. Although this has been beat around a million times and everyone has their opinions, clearly there have been different outcomes on this. If I was the OP, I would follow through with my insurance company and BMW FS and see what happens.
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That last sentence is pure greed. But what choice does a lessee have.
This is an interesting topic. The lease on my Camaro specifically calls out that any extra money they receive IS given back to me.
(b) Total Loss of Vehicle. If the Vehicle is damaged or destroyed beyond repair, stolen, or lost during the Lease Term, we may at our option agree in writing with you to continue this lease and provide you with a substitute vehicle. Otherwise, if the Vehicle is damaged or destroyed beyond repair, stolen, lost, or a total loss due to confiscation (“Total Loss”) during the Lease Term, we will end the Lease early as described in Item 22 Early Termination Liability and you will only owe the amount described in the following paragraphs of this Item 23(b).
If we receive a settlement under an insurance policy that complies with the requirements of this Lease (see Items 18 and 23(a)), you have gap protection, which means:
Monthly Payment Lease. We will deduct the amount of any refunds we receive from cancelling optional insurance, maintenance, service, or other contracts included in this Lease from the Adjusted Lease Balance (see Item 22) to compute a net lease balance (the “Net Lease Balance”). If the Net Lease Balance is greater than the insurance settlement we receive, you will only owe the excess up to the amount of your insurance deductible.
If the insurance settlement we receive is greater than the Net Lease Balance, you will receive a credit for any excess.
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