How to Manage/Mitigate Risk in a Lease -

[jeisensc]

@southpole12

I seem to be getting varying info on whether gap would cover a total loss.

Best Current EV lease

In a total loss, irrespective of lease or buy, gap pays off any shortfall, I’ve never seen one that pay overage (ACV - settlement). So if the loan/lease still has a balance after insurance pays-off, it covers the difference. It depends in the bank. For some, a new car loan has to originate at the dealer, some offer a loan with new car rates based on MY and mileage — e.g. Navy Federal has a “New Car Refinance” loan at the same rates as “New-new” if car is a 2023 or newer with up-to 30k miles

If you search and spend a half hour reading, all these gap and one pay questions have been answered many times. There are posts from people that experienced total loss who describe exactly how it played out (“stolen equity” is a great search phrase here).

tl;dr

• if a 1 pay or MSDs significantly reduce the rent charge, and you can, do it. Don’t worry about losing your 1P or MSDs in a total loss if you have gap
• don’t put money down on a lease simply to lower the payment (to minimize the rent charge, maybe). Anything you pay toward a cap cost reduction is more likely to evaporate in a total loss.
• gap insurance or waiver will cover any shortfall in a total loss, not “equity” (it’s not your “equity” on a lease, it’s the bank’s). Toyota and Mazda don’t include gap so you need to buy it separately, your car insurance is the first stop to see if they offer it, and how much - last I checked a few years ago mine offered it for about $1/mo, many carriers don’t offer it. Plenty of threads on that too.