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Gap coverage on a lease...

Discussion in 'Off Topic' started by ellisina4, Oct 15, 2019.

  1. ellisina4

    ellisina4 Member

    Joined:
    Jul 1, 2016
    Messages:
    74
    Location:
    Chicago
    Hello,
    Just picked up a Raven MX LR for my wife... car is leased.
    I was trying to find out from Tesla Finance if Gap coverage is included with the lease but have not received any response after multiple emails.

    The following is the info from the lease documents in reference to the Gap insurance:

    28. Early End Liability. If the lease ends early, you will pay the amount of any excess of the “adjusted lease balance” over the “realized value” (see below). However, if such excess is greater than the sum of the following, you will pay such sum instead: (i) all monthly lease payments not yet due plus (ii) any excess mileage charge (see item 9) plus (iii) any excess wear charge (see item 25). Either way, you will also owe us any amounts due under item 30.

    a. Adjusted Lease Balance: The adjusted lease balance on any date is the adjusted capitalized cost (see item 8.C) less all depreciation/ amortization through that date. We calculate the split between (i) depreciation/amortization and (ii) rent in each monthly payment using the “constant yield method,” a written explanation of which will be provided to you upon request. Our calculations assume that rent charges for each month are earned in advance, that your lease payments are received on their due dates and that the lease ends on the scheduled end date.

    b. Realized Value: If: (i) we keep the vehicle, the vehicle’s wholesale fair market value; or (ii) we dispose of the vehicle, the price we receive (including any insurance settlement we receive where “gap protection” under item 29 does not apply). Appraisal Right: However, you may pay for an independent third party agreeable to us to conduct a professional appraisal of the wholesale value of the vehicle that could be realized at sale, which case the “realized value” will instead be such appraised value.



    29. Gap Protection. If your vehicle is a total loss, you will owe the early end liability under item 28, which includes the “gap amount” (the difference between the adjusted lease balance (see item 28) at the time of the loss and the actual cash value we are paid for the vehicle loss). But such early end liability will not apply if we get a settlement under your insurance policy that complies with this lease. Instead, if such settlement is less than the adjusted lease balance (see item 28), you will owe the difference (up to your insurance deductible) plus any amounts due under item 30. We will credit you for any excess of the insurance settlement over the adjusted lease balance.



    This does not sound to me that Gap Insurance is include in the lease.

    At the same time, it stated in the following link that Tesla leases come with Gap insurance.
    Tesla Leasing

    Are there insurance requirements?
    Yes. There are minimum coverage requirements unless you’re subject to state-specific terms:

    • $50,000 for property damage
    • $100,000 for bodily injuries to any one person
    • $300,000 for any one accident
    • Physical damage insurance for full value of vehicle
    • Maximum deductible: $2,500

    Your lease comes with gap insurance
    .

    Please let me know your thoughts as I am not sure if I should get GAP coverage through my own auto insurance policy
    Thanks
     
  2. garrett3d

    garrett3d New Member

    Joined:
    Sep 21, 2020
    Messages:
    1
    Location:
    Los Angeles
    Hi, I have this question now as well. Did you ever get clarity on this?
     
  3. ellisina4

    ellisina4 Member

    Joined:
    Jul 1, 2016
    Messages:
    74
    Location:
    Chicago
    No clarity from Tesla at all... no one could confirm... since gap insurance was so cheap from most of the providers... I decided to purchase one just in case
     

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