A quick search will bring up all you need to know about one-pay and its possible risks.
The consensus is it’s low risk and you will receive a prorated amount back in the event of the vehicle being totaled.
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There’s no clear cut answer for this as it varies. This has been discussed on this forum at length with nobody ever chiming in who went through a total loss on a 1-pay lease. The best suggestion i can give you is to ask your insurance company if they will pay off the lease or if they pay off what the car is worth at the time of the accident and get that in writing.
I doubt the insurance company cares if you are doing 1 pay vs monthly. They will pay what the car is worth (some companies advertise they will pay full in the first year or so). Then gap insurance will kick in.
Problem is nobody knows how gap is calculated with one pay.
The ideal scenario: your one pay payment is prorated into monthly payments, financing company refunds you the unused portion, and then gap insurance kicks in as per normal.
The bad scenario: the gap is taken out of your onepay payment first, and then if there’s any shortfall left over gap insurance kicks in. If not, you get a refund for the reminder of your payment.
This isn’t true with gm financial. The lease agreement is very clear that it’s treated exactly like a regular lease would be, or prorated by number of months.
Mercedes Benz Financial is just like this.
They hold all your payments in escrow and then refund you the remaining balance if the car is totaled out.
Any information how BMWFS operates? I seriously couldn’t find any consistent info. via searching LH…
Whenever these “totaled” scenarios come I always ask myself how many people on here have actually totaled cars? I never have in 30 years but my girlfriend did with a three month old car. It was a purchase and AAA ended up paying us 4000$ more than we paid for the car. I don’t get why the totaled thing gets thrown around so much. What am I missing?
People wanna know what happens to their money in any given scenario, especially using it in unconventional ways like this, not sure what’s not to get.
I think if you didn’t ask it would be way more suspicious
It is an unlikely scenario, but it is still a scenario that CAN happen and that people want to understand the outcome.
At least with Mercedes-Benz and Audi, you are pro-rated back unearned depreciation and rent charge (basically, the monthly payment exclusive of taxes).
You lose any prepaid taxes and fees.
Since both Audi and mb have gap insurance written into the lease contract, it doesn’t matter if you have gap coverage thru your insurer.
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Because a total loss (either via accident or theft) is the only way to lose money on a prepaid/one pay lease that wouldn’t be lost with a monthly payment lease. Plus, you’d have to read the fine print on a lease contract pretty closely to understand it. It’s a valid question, and my experience is that even those in the dealership finance department don’t have the answer.
BMWFS also adds gap insurance in the contract: https://f80.bimmerpost.com/forums/showthread.php?t=1084623
GMF lists what happens with a one pay lease in this event. just read it or if really concerned, ask a lawyer to translate it for you.
Bumping this topic back up with a new question that some others may have…
If you take over someone’s one-pay lease and the car is then totaled or significantly damaged, what happens? You didn’t pay the finance arm of the manufacturer or a bank–you paid an 3rd party. Would part of the risk you are assuming include losing all of the downpayment or the unrealized portion of the lease? Is there any pro-rated portion that you could expect to be returned?
Appreciate anyone’s insight on this subject
You should be taking over every aspect of the lease, so you should get back the prorated payments, just as if you initiated the one pay.
As long as return of a prorated one-pay was guaranteed in the original contract.
The new lessee gains all the rights of the original lease so be sure what those are.
According to GM Finance, assuming someone’s “one pay” lease has zero protection for potential loss of use or the car being totaled. Their lease assumption department told me that their standard lease agreement does not allow for a pro-rated reimbursement, even for the original lessee. If that’s the truth, why on earth would anyone do a one pay. It just seems crazy risky. Maybe other manufacturers are different but this is what GM said.
Odd, GM 1 pay is a giant 35 payment MSD, I don’t think that’s correct.
How so? You don’t get your money back at the end of the lease.
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