Total Loss of Vehicle. If the Vehicle is damaged beyond repair
or stolen and deemed a total loss under your insurance coverage (“Total
Loss”) you will owe us the following and nothing more under the Lease once we receive the full insurance proceeds under the insurance policy:
(a) the deductible amount under your insurance policy; plus
(b) all amounts due and owing under the Lease as of the date of the Total
Loss, including past due Monthly Payments, late fees, official fees
and taxes or other amounts assessed under the Lease; plus
(c) any amounts (including Monthly Payments) that become due after
the date of the Total Loss and before our receipt of the full insurance
proceeds; plus
(d) any Excess Mileage due under the Lease determined as of the date of
the Total Loss; plus
(e) any Excessive Wear due under the Lease determined just prior to the
Total Loss, unless your insurance company deducted an amount from
the actual cash value of the Vehicle for excess wear (excluding excess
mileage), then you will pay the amount of the insurance company’s
excess wear deduction; plus
(f) any amount of the Adjusted Lease Balance owing on the Lease as of
the date of the Total Loss for a prior credit or lease balance; plus
(g) any amount of the Adjusted Lease Balance owing upon our receipt of
the full insurance proceeds that is the remaining balance of the
premiums or costs for Ancillary Products to the extent you are entitled
to, and a refund is received, from the product provider; plus
(h) any amounts your insurance company deducted from the actual cash
value of the Vehicle not attributed to excess wear or use of the Vehicle.
In all of my experience with BMW I have never seen that pamphlet, and it is dated in 2021, at a time when it seems there was no question over whether or not leases included GAP. At first glance, it looks like that is an “enhanced” GAP coverage that covers your deductible and possibly other things that standard GAP might not cover.
But then I went and looked at a lease contract from just a few months ago, and I notice it doesn’t say anything about GAP. Then I looked further at a contract from 2017 and that mentioned something but it specifically said for New York residents.
It seems to have been considered common knowledge that BMW leases have GAP included, but now, I obviously must question this given the language in my own contract. I am working with some contacts at BMW try to get a solid answer on this.
Embarrassingly, I’ve personally leased and transferred out of so many BMW’s over the last 3 years that I have a collection of contracts to look thru for pretty much every quarter of each year. What I’ve noticed is the specific language regarding a “Gap Amount” Waiver is included in contracts up until about June 2022. All the contracts before that month have the attached section below, and all the contracts after that month do not contain this section. Coincidentally, it’s around the same time BMW FS changed its disposition fee from $350 to $495 (no connection, but interesting).
My dealers are also all under the impression that GAP is included in all new BMW leases, at least in California. I’ve asked several reps to confirm this and will advise what I learn.
Clauses (a)-(e),(g)-(h) make sense to me, but I’m not sure what clause (f) means.
any amount of the Adjusted Lease Balance owing on the Lease as of
the date of the Total Loss for a prior credit or lease balance; plus
What is a “prior credit or lease balance”? Is that referring to a balance/credit leftover from a previous lease? Kind of like how you might rollover negative equity into a new car loan? I’m not sure exactly how that would work with leases though.
Anyway, unless clause (f) somehow includes the gap, I would think that Section 27 means that we don’t have to pay it. BMW gets the insurance payout, whatever it is, plus the amounts from (a)-(h), which shouldn’t include the gap.
That’s how I read it too. If the amount owing on the lease as of the date of a loss includes, e.g., negative trade equity added to the cap cost or excess wear and tear charges rolled in from a prior lease, then you are still on the hook for the portion of the balance attributable to those items to the extent not covered by your insurance payoff.
When I spoke with BMW-FS yesterday they said the newer contracts do not have any Gap waiver built in. If I wanted Gap in event of a total loss, I’d have to pay for it separately.
Did you point them to your new lease contract? Or were you just asking in general terms?
I asked them to review my 2023 i4 lease (California) and tell me if I had a Gap waiver. They said I had no Gap waiver and that the specific situation of having an insurance payout less than my payoff balance on a total loss would result in me owing money unless I paid for their GAP thing.
