Lease Question about getting another E class
Thread Starter
Junior Member
Joined: Dec 2010
Posts: 49
Likes: 1
From: NJ
'14 SL550 '12 e550, X5 5.0i
Lease Question about getting another E class
I am in the market for another E550 (last week some dude jumped a stop sign at 55mph and massacred my e93 335i) but this time I am looking at a convertible. For the past 20 years, it has been my strong belief that putting a down payment on a lease is the dumbest idea ever. However, in the process of doing paperwork for my totaled BMW I realized that because I didn't put a down payment on the car, the amount I will get from the GAP insurance is very small. Had I put down $3600 ($100/month, 36 month lease) my lease payment would have been $100 per month less and the total value I still owe on the car would be less meaning I get back more from the GAP Insurance. What am I missing here?
Super Member
Joined: Oct 2008
Posts: 803
Likes: 2
From: Saskatchewan
1969 280S, 1991 300E
When you put $0 down, you basically have zero equity when you start driving the car. The GAP protection safeguards the customer from a shortfall if they were to write-off the vehicle.
For instance, if you owe $60,000 but the value on the car is $50,000, your GAP insurance covers the difference.
If you put $3600 down up front, let's say you owe $56,400 when you total it. It's still worth $50,000, your lien will be paid out the $6400....you still get nothing back.
MB Financial has GAP protection built in to their leases, so you don't have to worry about it anyway...just don't expect to get your down payment back.
For instance, if you owe $60,000 but the value on the car is $50,000, your GAP insurance covers the difference.
If you put $3600 down up front, let's say you owe $56,400 when you total it. It's still worth $50,000, your lien will be paid out the $6400....you still get nothing back.
MB Financial has GAP protection built in to their leases, so you don't have to worry about it anyway...just don't expect to get your down payment back.
Thread Starter
Junior Member
Joined: Dec 2010
Posts: 49
Likes: 1
From: NJ
'14 SL550 '12 e550, X5 5.0i
Ah ok, thank you for reminding me of that. I think what I was getting confused with was that I owe less to BMW then what Allstate is offering for the car. The adjuster valued it at $46,000 and I owe $39,000 so I am getting about $7k. I guess in this scenario had I put a $3600 down payment it would have been ok because then I would owe $35.4k and get back $10.6k.
