I had a car crash and freaking out regarding the next steps

[Daniel in SD]

Into a previously collapsed attenuator, you mean...

Well yeah, there's concrete behind the attenuator!
Every accident post on this forum seems to exaggerate the severity. I'm not sure why it bugs me though. I guess I don't want people thinking they can run into a concrete wall at 70mph in their Tesla and live.

 

[cerealzealot]

Suppose Person A leased the same car with $16K down and the monthly payment x remaining lease term = $5000.
If the car was totaled and the person is entitled to the down payment of $16K, Tesla insurance will give Tesla $5000 and totaled car.

Suppose Person B leased the same car with $100 down and the monthly payment x remaining lease term = $20000.
If the person is entitled to $100, Tesla insurance will give Tesla $20000 and the totaled car.

If what you are saying is what should happen, what Tesla receives in case of totaled accident will depend on the amount of down payment.
And I would put the entire amount in down payment just in case I total the car, which I will make sure I total it before the lease ends because I will get all the money back.

That's not how it works.

Leasing will cost Person A and Person B the same amount over the lease term.
If you put a large down payment, it will only decrease the monthly payment.

But. I don't even want the down payment back in cash (because in this case it would indeed be a problem), I just want a new car from Tesla. Tesla will get $40K back (whatever the car is worth), my question is why wouldn't they give me a new car?

Are you telling me that my down payment vanished (Tesla forced me to put the maximum by the way, $12K) AND I need to pay the lease until the end (which is still 21 monthly payments since I just got the car)? For an accident I absolutely couldn't do anything about? (I won't show the video but again, I wasn't speeding, had an above average security distance, and both lanes left and right were busy so I had no choice).

 

[1100MCM]

The math works something like this: let’s assume the car’s cost is $38K. Assume the lease payments would be $500 per month which over 36 months would total $18K. Let’s assume you put $9K down because you wanted the payments to be $250 a month. Let’s say Tesla deems the residual (I think that’s what it’s called) or the amount to buy off the car at the end of the lease to be $20K (assuming they let you buy it). You crash it on day 1 and let’s say the insurance deems the car to be worth $31K as a total loss.

So if they offer $31K as the replacement value then that means the $31K would pay off the $20K residual, the $9K left of lease payments, and you would have $2K left over. Sadly you would be out of luck on initial $9K down payment (a net loss of $7K if you don’t push back and negotiate a better payoff from insurance) and there would be no “replacement car”: you would simply start over and get another car or another lease.

Lesson learned would be to always get gap insurance on leases and never put a down payment on a lease. It’s much better to put it in a CD or high yield savings where you can’t touch it for 36 months or whatever other option is best for you.

 

[SlimJim]

The math works something like this: let’s assume the car’s cost is $38K. Assume the lease payments would be $500 per month which over 36 months would total $18K. Let’s assume you put $9K down because you wanted the payments to be $250 a month. Let’s say Tesla deems the residual (I think that’s what it’s called) or the amount to buy off the car at the end of the lease to be $20K (assuming they let you buy it). You crash it on day 1 and let’s say the insurance deems the car to be worth $31K as a total loss.

So if they offer $31K as the replacement value then that means the $31K would pay off the $20K residual, the $9K left of lease payments, and you would have $2K left over. Sadly you would be out of luck on initial $9K down payment (a net loss of $7K if you don’t push back and negotiate a better payoff from insurance) and there would be no “replacement car”: you would simply start over and get another car or another lease.

Lesson learned would be to always get gap insurance on leases and never put a down payment on a lease. It’s much better to put it in a CD or high yield savings where you can’t touch it for 36 months or whatever other option is best for you.

Gap insurance is included in tesla lease

 

[cerealzealot]

Gap insurance is included in tesla lease

It says "declined" on my insurance page, but I know for sure I didn't decline it and probably wouldn't have been able to anyway (and the Tesla website it says it's included indeed).

The math works something like this: let’s assume the car’s cost is $38K. Assume the lease payments would be $500 per month which over 36 months would total $18K. Let’s assume you put $9K down because you wanted the payments to be $250 a month. Let’s say Tesla deems the residual (I think that’s what it’s called) or the amount to buy off the car at the end of the lease to be $20K (assuming they let you buy it). You crash it on day 1 and let’s say the insurance deems the car to be worth $31K as a total loss.

So if they offer $31K as the replacement value then that means the $31K would pay off the $20K residual, the $9K left of lease payments, and you would have $2K left over. Sadly you would be out of luck on initial $9K down payment (a net loss of $7K if you don’t push back and negotiate a better payoff from insurance) and there would be no “replacement car”: you would simply start over and get another car or another lease.

Lesson learned would be to always get gap insurance on leases and never put a down payment on a lease. It’s much better to put it in a CD or high yield savings where you can’t touch it for 36 months or whatever other option is best for you.

The maths is this: It's a 24 months lease, without an option to buy because you can't buy Model 3 at the end of leases.

I put $12K down, monthly payment of $176 (which represents $4200 total). The Tesla had 1200 miles on it, 3 months old, I can't believe the value isn't almost its full price. But from all of you are saying I can't ****ing sit on my $12K, right. The $12K Tesla forced me to put because my credit history was too new (I'm not American).

 

[MP3Mike]

But. I don't even want the down payment back in cash (because in this case it would indeed be a problem), I just want a new car from Tesla. Tesla will get $40K back (whatever the car is worth), my question is why wouldn't they give me a new car?

Because that isn't how it works. Most leases are through a third-party bank, and they don't allow collateral substitutions.

 

[captanzuelo]

For an accident I absolutely couldn't do anything about? (I won't show the video but again, I wasn't speeding, had an above average security distance, and both lanes left and right were busy so I had no choice).

Each white line is about 10 feet long. Space between them 30 feet long. Model Y does 70MPH to 0 in 161 feet, meaning anything less than 4 white lines gave you no chance of stopping in time.

Sucks about the lease down payment. It sound like you got hosed $12k for not having a credit history.

 

[MP3Mike]

The maths is this: It's a 24 months lease, without an option to buy because you can't buy Model 3 at the end of leases.

I put $12K down, monthly payment of $176 (which represents $4200 total). The Tesla had 1200 miles on it, 3 months old, I can't believe the value isn't almost its full price. But from all of you are saying I can't ****ing sit on my $12K, right. The $12K Tesla forced me to put because my credit history was too new (I'm not American).

You will probably get a significant part of your down payment back, minus deductible. But it depends on the trim, options you had, and your lease/insurance details.

But if you want another car you will have to buy/lease it. (And who knows maybe having had three months of leasing history under your belt now will have improved your credit enough to require less of a down payment on the next one.)

 

[cerealzealot]

You will probably get a significant part of your down payment back, minus deductible. But it depends on the trim, options you had, and your lease/insurance details.

But if you want another car you will have to buy/lease it. (And who knows maybe having had three months of leasing history under your belt now will have improved your credit enough to require less of a down payment on the next one.)

Thank you for giving me a bit of hope man, I'm on the verge of depression right now. Insurance did ask for the lease contract to see the options (it was just a SR+ blue with white interiors that's it, full price $41K I believe?).

But then sorry I don't understand, why would they give me back a portion of the down payment then? All the messages on this thread told me I could sit on it, why giving you the maths made you say I'll get money back?

 

[Ludalicious]

Sounds like the old swoop and squat insurance scam.... Well swoop and squat was too easy to spot.... Now people are doing the swoop and stopped....Happy to hear you are ok

 

[Daniel in SD]

Thank you for giving me a bit of hope man, I'm on the verge of depression right now. Insurance did ask for the lease contract to see the options (it was just a SR+ blue with white interiors that's it, full price $41K I believe?).

But then sorry I don't understand, why would they give me back a portion of the down payment then? All the messages on this thread told me I could sit on it, why giving you the maths made you say I'll get money back?

The insurance company will pay the value of the car to the owner of the car, the leasing company. Unfortunately the value of the car drops the second you drive it off the lot.
You owe the leasing company payments for next ~20 months plus a 24 month old car.
The leasing company will return to you the extra money, or send you a bill if they are still owed money.

 

[MSPFL]

What a mess this is...

The insurance company covers the present value of the car at the time it was totaled, as determined by...the insurance company. Most cars depreciate significantly during the first year of ownership. So figure your 3 month old 40k Tesla is now worth in the ballpark of 35k for insurance purposes.

The leasing company will demand from you the current buyout value of the lease. This is equal to the purchase price of the car plus interest to that point minus lease payments (including down payment) already made. This is equivalent to the residual value of the car at the end of lease, plus unpaid lease minus remaining interest.

In short, none of us can tell you what the buyout number will be. However, it will likely be closer to the hypothetical 40k than the current value of 35k. So the 35k insurance settlement would be split like this: 27.5k to the lienholder (40k purchase + nominal amount of interest over 3 months - 12k down - 500 in monthly payments), 7.5k to you.

In this case you've lost the part of your down payment equal to the depreciation of the car over 3 months as determined by your lease contract buyout and insurance settlement. GAP insurance would have done nothing for you here since you actually had equity in the lease contract because of the down payment. Also, you're going to lose any sales tax that you paid when you purchased the car, which I believe would have been based on your 12k down payment. So this would further reduce the amount of money you'd get back from the insurance company through a proportionately higher buyout number.

I don't know what CA law is like, but in many states if you were not at fault you may have additional options to make yourself whole. You'd need to talk to a lawyer about your specific case though.

Borrowed a little from here, it's a good discussion:
Suppose leased car is totalled: what are financial implications?

Best of luck!

*edit*
Looks like in CA the insurer has to include taxes and fees for a comparable vehicle in their settlement. Uncertain how this would apply in a lease situation with an unusually high down payment...
Total loss settlements: States requiring insurers to pay your sales tax after a totaled car

 

[Huskyfan]

Hi everyone,

So the last few days have been hard for me because I'm looking for answers and the people from Tesla are not helping me at all.

On Sept 17th I had a car accident on the freeway (I hit a car in the rear, and not because I wasn't paying attention or speeding or not maintaining distance). Airbags went off, car started catching on fire. Me I'm fine. But the car is most probably totaled.

It was a Model 3 on a lease that I just got in June. I have the Tesla Insurance (as they force you to take it, full coverage). I called them as soon as I could, and they are on the case (but extremely unresponsive to my emails or questions, and they never pick up the phone).

Can anyone reassures me and tell me how does it work when you total a car you have on a lease? Tesla insurance is gonna give back money to Tesla directly? Will I get back my down payment or will Tesla just give me a new car directly? Or for whatever reason is there a case where I'm not going to get back anything, neither my down payment or a new car? (I'm freaking out thinking of this possibility).

This is my first car accident and I'm lost, please if someone can help me and reassures me a little bit.

Out of curiosity, if you were paying attention, not speeding or driving too closely, what caused accident? Sounds to me like you did nothing wrong, so it must come down to some defect in the Tesla. I’d be talking to an attorney

 

[cerealzealot]

I called Tesla Insurance and I do NOT have gap insurance. I told the guy I had no choice when taking the insurance, he told me "yeah you can't do it online you have to call, because we don't know if Tesla gave you a new lease or not etc.".

So why the hell tesla.com shows this?

 

[MP3Mike]

I called Tesla Insurance and I do NOT have gap insurance. I told the guy I had no choice when taking the insurance, he told me "yeah you can't do it online you have to call, because we don't know if Tesla gave you a new lease or not etc.".

So why the hell tesla.com shows this?

View attachment 593176

Your lease came with GAP insurance built-in so you didn't have to pay for it with your car insurance.

 

[cerealzealot]

Your lease came with GAP insurance built-in so you didn't have to pay for it with your car insurance.

Are you sure? Because the guy told me I don't have it (but again he didn't seem very informed of how Tesla lease works).

 

[MP3Mike]

Are you sure? Because the guy told me I don't have it (but again he didn't seem very informed of how Tesla lease works).

Were you talking to Tesla, or Tesla insurance? (They are really two separate companies.)

 

[cerealzealot]

Were you talking to Tesla, or Tesla insurance? (They are really two separate companies.)

I called Tesla Insurance, give the guy my policy number and he told me I don't have it.

 

[MP3Mike]

I called Tesla Insurance, give the guy my policy number and he told me I don't have it.

Right, you don't have gap insurance through Tesla insurance, you have gap insurance from your leasing company.

 

[MSPFL]

I called Tesla Insurance and I do NOT have gap insurance. I told the guy I had no choice when taking the insurance, he told me "yeah you can't do it online you have to call, because we don't know if Tesla gave you a new lease or not etc.".

So why the hell tesla.com shows this?

View attachment 593176

Again, GAP coverage isn't going to matter in your case. The capitalized cost reduction (aka down payment) on the lease is specifically excluded. GAP only covers you if you still owe the leasing company money to fulfill the contract after the insurance settlement. In your case, you will likely get money back since your cap cost reduction up front was so high and the actual lease was so short.

A good summary of how GAP works:
FRB: Vehicle Leasing: Leasing vs. Buying: Gap Coverage