Why did I got a refund when I totaled my leased car?

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I couple of years ago I hit a deer and totaled my Seltos less than a year after I leased it. When I did the lease I traded in a previous lease that had some equity in it, around $5K I think. So in essence I put $5K down on the Seltos lease. After the car was totaled I got a check from Kia Financial for the overage my insurance paid them for the value of the totaled Seltos.

From all the stuff I read online, it seems a down payment on a lease is a bad idea for just this situation where I totaled my car. Everything I read says if that happens the money you put down upfront is lost since any insurance money goes to the bank and not the person owning the lease. If that is the case, why did I get a refund check from the bank?

Is this only because the bank values the car more than what the lease buyout price was? The lease buyout though takes into account the down payment from the trade though. So if this was a regular purchase it seems I would of got the same outcome. The only difference is the large insurance check would have come to be directly and not the bank. I still would have had the overage that I go from Kia Financial.

It seems I am missing something and I can’t figure it out.

2

The market value exceeded your adjusted lease balance and the bank, at that point in time, returned the excess.

With inflated used values, many banks (hyundai financial being one of them if memory serves) have changednl their contracts so that any insurance overages between adjusted lease balance and market value go to them. It is, after all, their asset that is being lost, so the owner gets paid market value to be made whole.

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I once got a refund for a non totaled lease I returned early. I gave it back with two months left expecting to get a bill for the two months and disposition fees and instead I got a check for $1200. It was a Mazda CX-5. They auction the car and depending on what they get you can earthier owe more or get a refund. I was very surprised to say the least.

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People make broad, sweeping generalizations all the time. In reality your situation was specific to you and your contract and/or your specific circumstances, such as which bank, which insurer, which state, etc.

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In a vast majority cases that is true.