Lease Car Totaled /// Assessing Settlement Value

Hi there,

About a month ago my wife was driving her leased Highlander SE. Driver behind her was distracted and rear -ended her, resulting in her car being totaled by the insurance company. The car was in mint condition, with only 27,xxx miles and the buyout is $29,xxx. Initially the insurance company only wanted to offer $31,xxx despite the car being worth significantly more. They said it wouldn’t matter because Toyota would keep all the entire amount, including the overage, or equity if you will. We checked with Toyota and they said we would be getting a check back from them for the overage. After going back and forth, the insurance company finally conceded that “we may be getting the difference.” At this point, I can’t help but thinking this is a dishonest tactic employed by the insurer to reduce their outlay (even though they will be fully compensated by the other driver’s insurance).

We reviewed the comps provided to develop their settlement value. Mysteriously, almost every one was unable to be found. Being the skeptic that I am, I ran all of the VINs and it turns out, that 9 of the 12 comps were for lower trim levels. 1 other was 7,500 miles over the allowable threshold (NJ only allows a 4k mile differential unless the insured provides consent) and had significant accident history. Needless to say, I refused to consent to this addition. This left only 2 acceptable comps with a median value of $37,799.

The insurer agreed with the comp value, but dinged us on the condition of the vehicle, stating dings, scratches, worn interior, tears, etc. As the car was in almost perfect shape (no dings or paint damage, no interior wear), I asked for photos to back up these claims. They countered by increasing the valuation, but is still withholding a little over $1,300 by stating the below.

“The only things that were not moved was the tires since they were worn down to 6/32nd half the life is gone on them, the Engine was very dusty that would not be found on dealer ready car. The transmission was left at private owner as well this is due to the unit being sealed and always goes with the motor condition. That is no fault of your own since its driven everyday its going to have some signs of wear and dirt there. Whereas the dealers are sitting on lot and are cleaned inside and out. The interior dash has some dirt on it I can see dust on the gauge cluster that should have been accounted for and I did notice the pet hair in the back but I did not take off for it when I should have done so as well just trying to get you where you want but have to be reasonable here there is a difference between your vehicle and one on a dealer lot and I cannot disregard everything on there.”

Am I wrong in thinking that we should not be dinged by the tires? I don’t think any dealership would be replacing tires with 6/32" left, and the comps provided would not have brand new tires installed. Further, I’d like some feedback in regards to the engine bay. Does the lack of steam cleaning really affect the value? Regarding the interior, it would’ve taken 30 minutes to vacuum and wipe down the dash. Am I wrong in thinking this is petty to even be brought up? Anyway, appreciate the community’s feedback. Thanks.

What’s the outcome you are looking for?

Rather than going back and forth with the adjuster, would it be better to just give them a number, how you came to the number, and be done with it?

They do this all day and see this more often than you do. They want to close the claim ASAP, and if it’s a reasonable, justified number, no reason for them not to settle quickly.

Edit: but yes, it does seem to be nit picky and throwing stuff on the wall to see what sticks.

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Thanks for the feedback. I told him the number we would accept is the median of the comps, which he is still under by around $1,300. I understand that they do this all day, but it’s their fiduciary duty to negotiate the lowest settlement value. Separately to the above, he conceded that he couldn’t find flaw with the car, other than the dirty engine bay and interior that needs to be vacuumed. If that rightfully impacts their valuation, I would concede that point, but I’m not sure it would.

As far as tires, I can’t imagine a dealership changes them out with that much life left. Accordingly, I would imagine the comps, at similar mileage, has similarly used tires.

Unless the car is being CPO’d and there are requirements to meet, most dealers won’t replace the tires at that tread depth. Also, I challenge that adjuster to find a Toyota dealer with every single car’s engine bay dust free. Most “detail” departments can barely clean the outside of a car, so that is an absolutely ridiculous claim.

Just because two cars have the same miles, does not mean the tires are similarly used. Maybe they rotated their tires every 5000 miles, did burnouts at every light, drove with underinflated tires, or a full load.

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Agreed, but the point is, the comps (having ~ 27k miles) most likely have used tires. To penalize us for not having 100% new tires (against comps that also do not have 100% tires) isn’t fair. It’s comparing apples to oranges.

Thanks again for the reply.

One thing that appears to be common here is if the Insurance company pays the Leasing company the full value and it’s got equity the Leasing companies tend to keep it.

So see if they can split the check if there is equity.

Toyota already said they wouldn’t keep it per the first post.

Which isn’t surprising since they don’t pay for gap either.

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This would be the end of my rope, honestly. “Dirt and dog hair” would be met with the words “Pay me the full median comp balance within 7 days or I will hire a public insurance adjuster”.


The insurer just reached out to say that Toyota requested the equity be sent directly to us.


Now if BMW can be convinced this is a good idea.

To them, it’s a good idea to pocket the money.

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