My car get totaled. Do i get downpay back

Some people just aren’t good with money. Maybe if they don’t put that 5K towards the car they will end up spending it on something else and then can’t afford the extra 150 a month. Really though, what probably happens is people see monthly payment and think lower is better. Ultimately it’s the same thing in the end and most leasers don’t think about the situation above.

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This is debatable, particularly in a case of a high mf. There is an actual net cost savings with a cap cost reduction. There’s a balance to be had between cost savings, actual risk of loss, and opportunity cost of what one could do with the money otherwise.

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And couple all of that with the almost zero chance of actually totaling the car during any 2- or 3-year lease term.

Not every risk is worth spending extra money to insure, especially when the maximum possible loss isn’t catastrophic.

If a $5k loss is catastrophic, you are in over your head with how much car you decided to get.

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For me, this is the bigger reason to not recommend large DAS amounts. A lot of people are happy to mentally write off an extra $1500 up front but cringe at an extra $50/mo on the payment.

I’m curious . What happens with Sales tax in this situation ? The way I’ve understood it , New York charges sales tax in advance , and usually I pay it at lease signing . What happens in the car gets totaled the next day ? I see that OP is in New York , I don’t know what’s included in his $5000 “down”, but not surprised if this is in part sales tax .

People just don’t go thinking their car is going to get totalled 3 months in

We really need to start teaching actuarial science in schools.

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If only almost zero was actually 0

We are about to see more of these types posts, but point taken.

I’ll play.

What kind of an idiot buys car insurance with a $1,000 collision deductible?

Everyone knows that if you have a $250 deductible instead, you’ll save $750 every single time you have an accident that’s your fault.

Should the title be changed to “BMW Shamelessly Stole My Equity - The Sequel”

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TFS does provide GAP insurance. I got it on my 2019 Taco.

TFS sells gap insurance, everyone else gives it for free.
(Well unless you got it from Cody, then Cody gives TFS Gap for free too)

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TFS will sell you GAP insurance as an additional upcharge.

Not sure what region you are in, but Southeast Toyota (which is a different bank) includes it in their leases I believe. I am not sure if there are more Toyota regions or what their policies are. They also offer 10 MSDs and I think TFS is only 9 max.

TFS sold me GAP insurance on my last lease (NY), actually negtiated it in upfront. What is worse, when I was considering extending the lease due to current shortages they told me that GAP insurance would not continue even though I would still be paying the extra $5 a month

With teenage drivers I always consider the cost of totaling the car and hope everyone walks away. I was caught in the same floods last week with a car that was 20 days old and I was worried although I put nothing down except I got money for my old lease so I would not be able to repeat the deal.

As for NY taxes, Geico told me many years ago that as long as they were broken out or I had a separate payment for them (needed to prove they were paid and not rolled in) I would eventually get the unusued portion of the NY taxes back but this was in 1998 so I have no idea if that is still true or if I was even given accurate information at the time so ask your insurance company before paying the taxes upfront. I thought I may have spoken to their salvage after a bunch of phone calls. Was about to do a new lease.

As for paying upfront due to MF, if your MF is so high that you need to put money down, you may be better off buying the car. To understand the interest rate, multiply whatever they tell you the MF is by 2400. Also remember the MF is on the upaid of the entire car, not only your payments. MFs are creeping up lately, may often be better to do .9% financing

It’s not about need, it’s about performing a realistic cost benefit analysis. As mf increases, the savings on a cap cost reduction increases, so your “cost” of “insurance” against the financial loss of totalling the vehicle goes up.

There are situations where even with a high MF, it’s better to lease, but the value of the insurance doesn’t justify the money savings.

The “proper” way to do this evaluation would be to look at the amount of money risked multiplied by the likelihood of the risk occurring to determine the effective cost of capital to keep the money liquid.

Granted, no one really goes through those calculations in great detail (except for maybe @trism), but it’s always good to keep in mind the real risks/costs.

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Sometimes there are other reasons to put up a downpayment. People do not want to show an $600 per month car payment. Either because their kids are on scholarship and they have to fill out forms (yes there is an inherent issue with someone on scholarship driving a $600 car but the truth is someone may be able to afford a car but not the 70K a year private or 50K a year public tuition.)

Or they are trying to maintain their credit for a mortgage. For example, someone is retired, they have a smaller income but lots of money in stocks and savings. They are moving soon and want to do a mortgage, maybe for the tax deduction, maybe because they do not want to invade principal. The $600 car may have an impact even though they have the assets to support it

That is why they call them accidents, you can do the calculations all you want, ultimately it is whichever risk v cost you are willing to live with, because there is no guarantee. I am never willing to beyond a certain amount and if the MF becomes higher than the cost of financing, I will buy. I almost did that on my last lease, the cost to lease a highlander was ridiculous, I realized I was better off buying but could not find one as my area was out

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Really depends on how your premium swings with changing deductibles.

Maybe you’re in a lower risk group and the swings are small. In a higher risk group the swings are substantial

And unlike flooding or other total loss events beyond anyone’s control, a driver has some control over being at fault. A safe driver has a lower chance of filing an at-fault collision claim. Why would they pay higher premiums throughout their lifetimes to insure against such a small upside?

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It’s one thing to gamble $750 if the savings are high enough from premium, but when people do down payments they typically gamble far higher sums, like $5k in this case. I don’t know many people that have $5k auto deductibles (I’ve never even seen one as a choice, typically $2500 is the highest).

Also, typically, the lease MF is subvented, so the interest savings are fairly low, while the savings moving to a higher deductible are usually more significant. But personally, I always do a cost/benefit analysis for each deductible level. which is why I’m at $250 deductible across comp for all 3 of my vehicles and $250 or $500 for collision. For example, if it end up paying an extra $250 in a 1.5 yr period for the $250 deductible vs the $500, to me it wouldn’t make sense.

2 out of last 10 of my cars got totaled (not at fault). I wish almost zero applied to me.

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