shortfall on a lease

ZiM · 02-28-2007, 05:07 AM

how do

went in to sign the final papers for the car this morning and they offered me shortfall insurance for £399 (3 years)

do you think this is worth it bearing in mind my car is on a lease?

discuss

Z4 Beemer · 02-28-2007, 09:55 AM

<whisper>I didn't bother with it... but I can appreciate it could be useful if you are worried about that sort of thing.</whisper>

ZiM · 02-28-2007, 10:31 AM

<whisper> i meant it in a purely lease-based sense... i can see why you would do it if it was your own bmw, but is it really worth it on a lease? </whisper>

imolazhp_ci · 02-28-2007, 10:43 AM

in the US its included on BMW leases... make sure they aren't pulling a fast one on you.

Z4 Beemer · 02-28-2007, 11:22 AM

Quote:

Originally Posted by ZiM

<whisper> i meant it in a purely lease-based sense... i can see why you would do it if it was your own bmw, but is it really worth it on a lease? </whisper>

<whisper> Good point. Mine is lease based as well with option to buy at end. </whisper>

NFS · 02-28-2007, 11:34 AM

Quote:

Originally Posted by ZiM

how do

went in to sign the final papers for the car this morning and they offered me shortfall insurance for £399 (3 years)

do you think this is worth it bearing in mind my car is on a lease?

discuss

Is your car really 'leased' or is it 'lease purchase' or 'pcp'?

If the car is leased then you will never own it or have financial responsibility for it's 'value'. This would be the same for PCP.

If you have lease purchase like I do then you really just have 2 lots of HP. So in that instance there is a benefit / risk to gap insurance.

Having said that I decided not to bother.

ZiM · 02-28-2007, 05:29 PM

i get mixed up with all the mumbo jumbo... basically i pay a monthly fee of which i can get half the vat back and at the end of the period i must give the keys back, no baloon no nothing...

as far as i knew this is a proper "lease"... no? - you saying there is no reason to have shortfall on this kind of scheme?

mjh93sa · 02-28-2007, 06:06 PM

Depends on what you would have to pay to get out of the agreement in the case of the car being a total loss.

If the car is still 6-12 months old your insurance will replace with new (depending on insurer) so no problem. However, if you're just outside this and just get market value for the car you could end up out of pocket to settle with the finance company, let alone to replace the car.

For the peace of mind of not being left in this situation, and given the structure of the finance I took it on the E46. The irony is that the car would now be worth more to me written off than to trade in, as the shortfall would cover the gap from the insurance settlement to the original purchase price (+ inflation).

ZiM · 03-01-2007, 02:59 AM

so you can end up (serously) in pocket by doing it?

NFS · 03-01-2007, 04:34 AM

Quote:

Originally Posted by ZiM

i get mixed up with all the mumbo jumbo... basically i pay a monthly fee of which i can get half the vat back and at the end of the period i must give the keys back, no baloon no nothing...

as far as i knew this is a proper "lease"... no? - you saying there is no reason to have shortfall on this kind of scheme?

I think this is a 'proper lease' since you have no opportunity or obligation to buy the car outright at the end of the term.

So you need to find out what happens if the car is written of. If you are obliged to provide your own insurance are you also obliged to replace the car?

If so, what are the terms of replacement? Would you need to provide a brand new car, or a used one and what if the specification were slightly altered?

In effect you are just hiring a car, so the most equitable situation would be that they would give you a replacement and sort it out direct with your insurers.

However, I would want to know more if there is a suggestion that you would have some sort of shortfall liability.

NFS · 03-01-2007, 04:37 AM

Quote:

Originally Posted by ZiM

so you can end up (serously) in pocket by doing it?

You can if you have 'return to invoice' cover.

However, I'm spending a 'car allowance' and I don't really think of it as my cash - it's more like I am procuring my own company car. So I'm not expecting an asset at the end of my finance term.

- Paul - · 03-01-2007, 04:45 AM

Happy Birthday ZIM

NFS · 03-01-2007, 04:55 AM

Quote:

Originally Posted by 1stnewcar

Happy Birthday ZIM

What ... ZIM's younger than me - he's getting a nice new car this weekend AND it's his birthday !

booforty · 03-01-2007, 04:55 AM

Yeah happy birthday!!

Z4 Beemer · 03-01-2007, 06:45 AM

Happy birthday ZiM mate!

02-28-2007, 05:07 AM	#1
ZiM First Lieutenant 22 Rep 304 Posts Drives: E90 330d Join Date: Feb 2007 Location: Staffordshire, UK iTrader: (0)	shortfall on a lease how do went in to sign the final papers for the car this morning and they offered me shortfall insurance for £399 (3 years) do you think this is worth it bearing in mind my car is on a lease? discuss
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02-28-2007, 09:55 AM	#2
Z4 Beemer Colonel 85 Rep 2,353 Posts Drives: 2009 Z4 sDrive 23i Join Date: Oct 2005 Location: Glasgow, Scotland, UK iTrader: (0) Garage List 2006 E92 [0.00] 2004 Z4 2.2i [8.00]	<whisper>I didn't bother with it... but I can appreciate it could be useful if you are worried about that sort of thing.</whisper> __________________ E89 Z4 sDrive 23i... for the more discerning driver
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02-28-2007, 10:31 AM	#3
ZiM First Lieutenant 22 Rep 304 Posts Drives: E90 330d Join Date: Feb 2007 Location: Staffordshire, UK iTrader: (0)	<whisper> i meant it in a purely lease-based sense... i can see why you would do it if it was your own bmw, but is it really worth it on a lease? </whisper>
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02-28-2007, 10:43 AM	#4
imolazhp_ci Major 29 Rep 1,002 Posts Drives: Z4 M Coupe Join Date: Jan 2007 Location: orange county iTrader: (0)	in the US its included on BMW leases... make sure they aren't pulling a fast one on you.
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02-28-2007, 05:29 PM	#7
ZiM First Lieutenant 22 Rep 304 Posts Drives: E90 330d Join Date: Feb 2007 Location: Staffordshire, UK iTrader: (0)	i get mixed up with all the mumbo jumbo... basically i pay a monthly fee of which i can get half the vat back and at the end of the period i must give the keys back, no baloon no nothing... as far as i knew this is a proper "lease"... no? - you saying there is no reason to have shortfall on this kind of scheme?
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02-28-2007, 06:06 PM	#8
mjh93sa Major General 148 Rep 5,080 Posts Drives: 530d Join Date: Dec 2005 Location: Gloucestershire iTrader: (0) Garage List 2012 BMW M135i [10.00] 2011 Mini Countryma ... [5.50]	Depends on what you would have to pay to get out of the agreement in the case of the car being a total loss. If the car is still 6-12 months old your insurance will replace with new (depending on insurer) so no problem. However, if you're just outside this and just get market value for the car you could end up out of pocket to settle with the finance company, let alone to replace the car. For the peace of mind of not being left in this situation, and given the structure of the finance I took it on the E46. The irony is that the car would now be worth more to me written off than to trade in, as the shortfall would cover the gap from the insurance settlement to the original purchase price (+ inflation). __________________ Gone: Fiesta - Focus - E46 320dSE - E91 330dMSport - E82 135iMSport - R55 JCW Clubman - M135i Now: 530d
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03-01-2007, 02:59 AM	#9
ZiM First Lieutenant 22 Rep 304 Posts Drives: E90 330d Join Date: Feb 2007 Location: Staffordshire, UK iTrader: (0)	so you can end up (serously) in pocket by doing it?
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03-01-2007, 04:45 AM	#12
- Paul - Major General 752 Rep 7,308 Posts Drives: see above. Join Date: Apr 2005 Location: Yorkshire, UK iTrader: (5) Garage List 2005 320D SE [10.00] 2005 645 [9.00]	Happy Birthday ZIM __________________ My Photos
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03-01-2007, 04:55 AM	#14
booforty Major General 345 Rep 8,809 Posts Drives: E92 M3 Join Date: Mar 2005 Location: London, UK iTrader: (0) Garage List 2008 E92 M3 [0.00]	Yeah happy birthday!!
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03-01-2007, 06:45 AM	#15
Z4 Beemer Colonel 85 Rep 2,353 Posts Drives: 2009 Z4 sDrive 23i Join Date: Oct 2005 Location: Glasgow, Scotland, UK iTrader: (0) Garage List 2006 E92 [0.00] 2004 Z4 2.2i [8.00]	Happy birthday ZiM mate! __________________ E89 Z4 sDrive 23i... for the more discerning driver
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