Timeline for Suppose leased car is totalled: what are financial implications?
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| Jun 11, 2019 at 16:01 | history | edited | Harper - Reinstate Monica | CC BY-SA 4.0 |
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| Jun 11, 2019 at 14:28 | comment | added | BrianH | "you can't just walk away" - err, I am concerned someone reading this might actually think they can be forced to roll-forward into another purchase, and that they don't actually have a choice. Of course they can just walk away - they will likely still owe the debt and could take a hit to their credit score in the mean time, but most times a payment plan can be worked out to avoid a hit, and at-worst a hit to credit while paying off an old debt is usually vastly better than acquiring an even bigger debt for the future. Would be nice to clarify they aren't actually forced, otherwise good answer! | |
| Jun 10, 2019 at 20:49 | comment | added | JimmyJames | @Will Yes, the property in question is the vehicle. The lease payoff amount is not property, it's a liability. You could sell the vehicle and use the proceeds to pay off the lease. Likely a dealership will help you do this as part of getting a new lease. | |
| Jun 10, 2019 at 17:22 | comment | added | Will | @AnthonyGrist if the lessor has legal ownership then isn't it the insurer's responsibility to compensate them directly for loss of their property? | |
| Jun 10, 2019 at 12:34 | comment | added | Anthony Grist | @Will I assume the main reason they care is that it's not the vehicle they actually leased you, and they had no part in determining whether it actually has the same value. Your insurance company may say the original car was worth 10k, and you may buy another car that's the exact same make and model for 10k, but the company you took the lease out with may not agree that this new car is worth 10k. There's probably also legal issues around ownership involved, too; when you lease a car you don't own it, but if you buy a new car to replace a written off lease, you do own the new one. | |
| Jun 10, 2019 at 9:27 | comment | added | Will | Why does the insurance write-off affect the equity balance though? The insurer has just replaced one car that was worth less than the outstanding balance of the lease with a lump of cash which can buy a car of the same value outright. However the lease eventually gets settled, does the lessor really care if the asset used is the one originally leased if it has the same value? | |
| Jun 9, 2019 at 18:58 | history | answered | Harper - Reinstate Monica | CC BY-SA 4.0 |