BMW Sent me 4 Grand for no reason!!!

[MoreCowbell]

So, as many of you know, I totaled my X5...

I just arrived home from a short vacation to find a check from BMW Financial Services for a little over $4300 dollars...

I called them to ask why and they told me that this was the difference between what GEICO sent BMW to pay off the car and the amount that BMWFS needed to settle the account.

She made it seem like this wasn't completely abnormal.

Can anybody shed any light on this???

[Kroy]

no light to shed, but um... good win? congrats?

[Tondtar]

I believe GEICO is entitled to that difference. They will eventually find out after BMW sends them a copy of settlement.

So play dumb, keep it for yourself for now but don't spend it on anything yet.

[kabalm18]

They probably want you to buy that ugly ass 1M coupe.

[ABQ325i]

Geico are not entitled to anything. Your payments go to principal as well as interest. This is just your equity being paid back to you.

[ToothDoc]

I guess you owed less on the car then the car was worth. For example, so you had perhaps only 30K left of payments but the car was worth 34K. So Geico paid BMW the 34K and so that remaining 4K is what BMW owed you. So yeah, Geico paid 34K for the totaled car and the car is theirs, but BMW already got paid from the original buyer. The payments the buyer and Geico made is 4K over the original price so buyer gets it back. That's how I'm looking at it. To OP, it's yours.

[Seminole]

Originally Posted by Tondtar

I believe GEICO is entitled to that difference. They will eventually find out after BMW sends them a copy of settlement.

So play dumb, keep it for yourself for now but don't spend it on anything yet.

Nope, pretty sure it's his. Geico sent the money to BMWFS because they had the title to the car. Geico pays out what it calculates as the market value of the car. That value happened to be more than he owed to BMWFS so he gets the rest. Think about it. Let's say you bought a 50k car and you paid 30k cash and financed the other 20k. If that car gets totaled a week later and the insurance company settles for 45k they'll send the check to the finance company because they hold the title to the car as collateral. After they take their 30k they'll send you a check for the remaining 15k you are entitled to.

[Tondtar]

Originally Posted by Seminole

Nope, pretty sure it's his. Geico sent the money to BMWFS because they had the title to the car. Geico pays out what it calculates as the market value of the car. That value happened to be more than he owed to BMWFS so he gets the rest. Think about it. Let's say you bought a 50k car and you paid 30k cash and financed the other 20k. If that car gets totaled a week later and the insurance company settles for 45k they'll send the check to the finance company because they hold the title to the car as collateral. After they take their 30k they'll send you a check for the remaining 15k you are entitled to.

You guys are correct. I was assuming he had no equity in the car i.e., a leased contract. However, if he had financed the car and had built some equity so that the balance on the loan was less than what the market price of the car was at the time he crashed it, then by all means, he can head to Vegas after he cashes that check

[MoreCowbell]

Originally Posted by ABQ325i

Geico are not entitled to anything. Your payments go to principal as well as interest. This is just your equity being paid back to you.

The car was LEASED!!!

[BTM]

Originally Posted by MoreCowbell

The car was LEASED!!!

Was it the difference between the lease buyout and fair market value? If so, pretty sure it's still yours, since that is the amount of money you could've bought it outright for...

[MoreCowbell]

Originally Posted by Tondtar

You guys are correct. I was assuming he had no equity in the car i.e., a leased contract. However, if he had financed the car and had built some equity so that the balance on the loan was less than what the market price of the car was at the time he crashed it, then by all means, he can head to Vegas after he cashes that check

I completely understand it from a finance standpoint...but I LEASED the car...I had no equity in it...

[MoreCowbell]

Originally Posted by BTM

Was it the difference between the lease buyout and fair market value? If so, pretty sure it's still yours, since that is the amount of money you could've bought it outright for...

Now THAT makes sense.

[molossus]

thats pretty cool

[NYCGarbagePrince]

This is why you get GAP insurance on a leased car. How do people lease cars and not know this? It is your protection when the car is leased, just in case the car is totaled and you owe more on the car than it is worth. What you were paid was the difference in what the GAP coverage owed you and the amount BMWFS required to fulfill the debt. Even if the car is leased you still financially obligated to BMWFS if the car is totaled. Your insurance covered majority of the nut, and what was left was covered by GAP insurance, which you obviously had. It is normally used to cover the deductible.

It's your money.

[escobar929]

time to hit up the strip club

[Feyd]

Originally Posted by escobar929

time to hit up the strip club

Or if you are finding it hard to come up with a use for it, I'm looking for a new toolbox for the garage.

I can PM you my acct. info when you're ready.

[endofanera7]

Originally Posted by kabalm18

They probably want you to buy that ugly ass 1M coupe.

lol KB, where the fuck u been????

[Freakazoid]

Originally Posted by NYCGarbagePrince

This is why you get GAP insurance on a leased car. How do people lease cars and not know this? It is your protection when the car is leased, just in case the car is totaled and you owe more on the car than it is worth. What you were paid was the difference in what the GAP coverage owed you and the amount BMWFS required to fulfill the debt. Even if the car is leased you still financially obligated to BMWFS if the car is totaled. Your insurance covered majority of the nut, and what was left was covered by GAP insurance, which you obviously had. It is normally used to cover the deductible.

It's your money.

this

[MediaArtist]

This is just the difference between what the appraiser told GEICO the car was worth, and the amount you had left to pay.

A neighbor of mine got a $6,500 check for a totaled 328i because of that "difference".

[Tondtar]

Originally Posted by MoreCowbell

The car was LEASED!!!

Originally Posted by BTM

Was it the difference between the lease buyout and fair market value? If so, pretty sure it's still yours, since that is the amount of money you could've bought it outright for...

Yes, it does make sense. However, if true, it probably mean you had a bad deal on your lease. In my experience, most leases try to inflate the depreciated value of the car at the end of the lease in form of a high residual value so they can move their inventory.

High residual value makes the "rent amount" part of the lease more affordable which is the highest factor of "affordability" in a lease deal. If the car's market value is worth more than the residual value you had on your lease, the lessor has made good money on the deal. In my experience, this rarely happens unless the car in question moves the dealer's lot like hot cake (so there is no incentive to offer a "great" deal) or the car's model is new to the market and it becomes hot property after being out and demand for it escalates so those early in the line would get a lot better deal right off the bat.

Anyone else disagrees? ....Curious what the terms of the lease were on your old car. I am no lease expert but sounds like you were being had, bro.

[Freakazoid]

Originally Posted by Tondtar

Yes, it does make sense. However, if true, it probably mean you had a bad deal on your lease. In my experience, most leases try to inflate the depreciated value of the car at the end of the lease in form of a high residual value so they can move their inventory.

High residual value makes the "rent amount" part of the lease more affordable which is the highest factor of "affordability" in a lease deal. If the car's market value is worth more than the residual value you had on your lease, the lessor has made good money on the deal. In my experience, this rarely happens unless the car in question moves the dealer's lot like hot cake (so there is no incentive to offer a "great" deal) or the car's model is new to the market and it becomes hot property after being out and demand for it escalates so those early in the line would get a lot better deal right off the bat.

Anyone else disagrees? ....Curious what the terms of the lease were on your old car. I am no lease expert but sounds like you were being had, bro.

to a point, but the residual can fluctuate in either direction (the $4k number makes me want to definitely agree with you). A good example is the 135i vs the 335i. The 135i residual ended up dropping more than they anticipated....thus there's no way in hell you would get a check.
I'm not sure how the 335i held up, but if it depreciated in the market slower than anticipated by the residual, then you would get a check.

[NYCGarbagePrince]

Ton you are right. But this is the EXACT reason you get GAP insurance. Say he leases the car and goes and picks it up. As soon as he leaves the lot the car is instantly a used car and therefore worth less. Well during the next few months the owner/leasee is in a critical stage where the car's value has dropped the largest amount in the shortest amount of time that it will during the ownership of the vehicle. Before GAP coverage, if the car was totaled during this period, the owner/leasee was "effed in the A".