[Kayorlando]

Does gap insurance included in leases? If not where is the best place to get it?

[Graaf_Autowerks]

Originally Posted by Kayorlando

Does gap insurance included in leases? If not where is the best place to get it?

Gap insurance exists because of the differential between value of what you own versus value of what you still owe.

Early on that ratio is way off due to interest compiling and not paying down principle etc.

When you lease, you own nothing. Therefor, you have no need to hold gap insurance. The owner of the vehicle (BMW financial) assumes this risk and probably has insurance themselves.

I should have prefaced this with, this is my understanding... I have never heard of anyone using or needing gap insurance on a leased vehicle.

[F1 Pilot]

Originally Posted by Kayorlando

Does gap insurance included in leases? If not where is the best place to get it?

In NY a lease through BMWFS includes gap insurance. 99% certain.

[Merami fan]

Gap insurance is included with BMWFS. Not every lender includes it, though.

[xlover]

Originally Posted by F1 Pilot

In NY a lease through BMWFS includes gap insurance. 99% certain.

100%! it's in the bmwfs lease contract

[Mdog97]

I agree, I think it's in the base BMWFS lease, but I'd guess that these contracts may be slightly different from state to state now, especially given that they are no longer preprinted physical forms but now customized documents printed directly in the F&I office at each dealership. Worth reading the lease contract carefully, and talking to your insurance company/broker.

On my most recent BMWFS lease (from a few weeks ago), paragraph 25. "Gap Amount" Waiver reads, in part:

If I am in compliance with my insurance obligations under this Lease and the Vehicle is damaged, stolen or destroyed and considered a total loss under my insurance coverage, I will not be obligated to pay you the gap amount (the difference between the Adjusted Lease Balance and the actual cash value of the Vehicle as of the date of loss) if the claim for total loss is actually paid to you by my insurance company.

My MA leases all seem to have the gap waiver provision, but then my Traveler's auto policy also charges me a small (~$23/year) amount for lease gap coverage. I guess I have to dig in to the fine print to figure out what's actually going on.

I do know that when I did a 1-pay lease on my X3 back in 2018 that the dealership salespeople tried to steer me away based on risk of the vehicle being totaled and the resulting loss of the "equity" that I would be putting into the lease.

[TurtleBoy]

Originally Posted by Mdog97

I do know that when I did a 1-pay lease on my X3 back in 2018 that the dealership salespeople tried to steer me away based on risk of the vehicle being totaled and the resulting loss of the "equity" that I would be putting into the lease.

They were wrong in their advice/knowledge. One pay leases are handled differently than down payments on traditional leases in that the money you pay is put into escrow and withdrawn as payments are due. Should the vehicle get totaled you would get all of the remaining money back.

[xlover]

Originally Posted by Mdog97

I agree, I think it's in the base BMWFS lease, but I'd guess that these contracts may be slightly different from state to state now, especially given that they are no longer preprinted physical forms but now customized documents printed directly in the F&I office at each dealership. Worth reading the lease contract carefully, and talking to your insurance company/broker.

On my most recent BMWFS lease (from a few weeks ago), paragraph 25. "Gap Amount" Waiver reads, in part:

If I am in compliance with my insurance obligations under this Lease and the Vehicle is damaged, stolen or destroyed and considered a total loss under my insurance coverage, I will not be obligated to pay you the gap amount (the difference between the Adjusted Lease Balance and the actual cash value of the Vehicle as of the date of loss) if the claim for total loss is actually paid to you by my insurance company.

My MA leases all seem to have the gap waiver provision, but then my Traveler's auto policy also charges me a small (~$23/year) amount for lease gap coverage. I guess I have to dig in to the fine print to figure out what's actually going on.

I do know that when I did a 1-pay lease on my X3 back in 2018 that the dealership salespeople tried to steer me away based on risk of the vehicle being totaled and the resulting loss of the "equity" that I would be putting into the lease.

1) travelers is double dipping with a redundant coverage

2) gap insurance only covers the difference between the market value of the vehicle and lease residual plus what is remaining on your lease account balance. In a 1 pay lease the account balance is 0 so there is no "gap" for them to cover. This is why most who know how leases work put 0 down, any cash you put down to lower your payment is gone in the event of vehicle being a total loss. A one pay lease is the extreme.

[Mdog97]

[bit of thread drift - apologies]

Thanks TurtleBoy and xlover. Like most things I hear at the dealership, I figured the one-pay "advice" was BS. The explanations make sense, and conform to the way the payment emails have been coming from BMWFS. Just to satisfy my curiosity, I will go back and look at that one-pay lease to see if it says anything about gap waiver.

The bigger / biggest concern I had at the time was that BMW FS wouldn't do a pull-forward near lease end if you did the one pay lease. I ended up biting my lip and taking the deal, for other reasons. That lease is ending in about 2 months now, though, so it will end up having been a non-issue in retrospect.

The double-dip from Travelers is an interesting point. I'm going to pull my policy documents and see what they're providing for that coverage.