[Mark Kez]

The end is near and I’ve learned a lot about insurance and valuing your dream car every damn day you can.

I waited seven months for my G83 only to have it totaled seven months later by a careless driver. It’s taken me three months, two lawyers and an independent appraiser to finally get a settlement that was fair from my insurance company. In NY state where our loss property laws aren’t very good I got lucky because I knew the value of my car and didn’t accept the 1st, 2nd or 3rd offer from my insurance company. Three college degrees finally paid off!!

I’ve learned that when you put money down on any car you are taking a huge risk, here in NY state that money is gone forever if your car is totaled. Don’t purchase warranties in advance and fold that money into your monthly payment, only the extended warranty contract is refundable, all others you’re out that money. Finally and most importantly, value every damn day in your car! I’ve been driving various rental cars for three months, a Chevy and now a Kia Soul. Trust me, neither of them are a BMW, or an M car and certainly not a convertible with over 500hp and torque that’ll pull you out of anything. Forget the money I lost, I miss driving my car, an M car and the only thought that keeps me from going insane is that fact that my new one is sitting at the port, hopefully making it onto the Grand Pavo on Wednesday. Life is one big learning experience and is the best teacher, so take what you will from my experience, but do yourselves a favor and cherish every damn day in your cars, they really are the Ultimate Driving Machines!!

['Cane]

Originally Posted by Mark Kez

I got lucky because I knew the value of my car and didn’t except the 1st, 2nd or 3rd offer from my insurance company. Three college degrees finally paid off!!

Ohhh, the irony.


Glad you’re nearing the end of this.

[Mark Kez]

Originally Posted by 'Cane

Ohhh, the irony.


Glad you’re nearing the end of this.

You’re worse than my English major PhD wife!! Good catch!!

[chicagofan00]

Originally Posted by 'Cane

Ohhh, the irony.


Glad you’re nearing the end of this.

[Znomorph4theWin]

Glad the story had a happy ending! Congrats on the replacement!

[DO444]

Originally Posted by Mark Kez

The end is near and I’ve learned a lot about insurance and valuing your dream car every damn day you can.

I waited seven months for my G83 only to have it totaled seven months later by a careless driver. It’s taken me three months, two lawyers and an independent appraiser to finally get a settlement that was fair from my insurance company. In NY state where our loss property laws aren’t very good I got lucky because I knew the value of my car and didn’t accept the 1st, 2nd or 3rd offer from my insurance company. Three college degrees finally paid off!!

I’ve learned that when you put money down on any car you are taking a huge risk, here in NY state that money is gone forever if your car is totaled. Don’t purchase warranties in advance and fold that money into your monthly payment, only the extended warranty contract is refundable, all others you’re out that money. Finally and most importantly, value every damn day in your car! I’ve been driving various rental cars for three months, a Chevy and now a Kia Soul. Trust me, neither of them are a BMW, or an M car and certainly not a convertible with over 500hp and torque that’ll pull you out of anything. Forget the money I lost, I miss driving my car, an M car and the only thought that keeps me from going insane is that fact that my new one is sitting at the port, hopefully making it onto the Grand Pavo on Wednesday. Life is one big learning experience and is the best teacher, so take what you will from my experience, but do yourselves a favor and cherish every damn day in your cars, they really are the [...]

Agree with all you wrote.
But the most important thing, and I know this from experience, is that you are healthy and alive to tell the story.

Cars are amazing and I’d not want to miss mine, but man so is life. From the fact that you can write this post I’m gonna assume your is still intact!

[Mark Kez]

Originally Posted by DO444

Agree with all you wrote.
But the most important thing, and I know this from experience, is that you are healthy and alive to tell the story.

Cars are amazing and I’d not want to miss mine, but man so is life. From the fact that you can write this post I’m gonna assume your is still intact!

Amen my brother or sister, amen!!

[RACE M3]

I learned the same lesson. I now do 0down and buy gap insurance from the community bank I finance with($300). It would have saved me 10k on a car a few years ago.

Sorry to hear, best of luck with the next purchase

[Forzanerazzurri]

Do you guys not have New Vehicle Protection clauses in your insurance policies in the US? I think I pay $100 bucks a year and if the car is totalled I get 100% of the purchase price back. That premium obviously goes up with depreciation but it's a must have and peace of mind for the first year or two when you have a car thats financed (especially with nothing down).

[Mark Kez]

Originally Posted by Forzanerazzurri

Do you guys not have New Vehicle Protection clauses in your insurance policies in the US? I think I pay $100 bucks a year and if the car is totalled I get 100% of the purchase price back. That premium obviously goes up with depreciation but it's a must have and peace of mind for the first year or two when you have a car thats financed (especially with nothing down).

I did, but check this; it’s only valid if your car is under 15,000 miles, mine was 15,600!! Small print!!!

[BryanCO]

Originally Posted by Mark Kez

The end is near and I’ve learned a lot about insurance and valuing your dream car every damn day you can.

I waited seven months for my G83 only to have it totaled seven months later by a careless driver. It’s taken me three months, two lawyers and an independent appraiser to finally get a settlement that was fair from my insurance company. In NY state where our loss property laws aren’t very good I got lucky because I knew the value of my car and didn’t accept the 1st, 2nd or 3rd offer from my insurance company. Three college degrees finally paid off!!

I’ve learned that when you put money down on any car you are taking a huge risk, here in NY state that money is gone forever if your car is totaled. Don’t purchase warranties in advance and fold that money into your monthly payment, only the extended warranty contract is refundable, all others you’re out that money. Finally and most importantly, value every damn day in your car! I’ve been driving various rental cars for three months, a Chevy and now a Kia Soul. Trust me, neither of them are a BMW, or an M car and certainly not a convertible with over 500hp and torque that’ll pull you out of anything. Forget the money I lost, I miss driving my car, an M car and the only thought that keeps me from going insane is that fact that my new one is sitting at the port, hopefully making it onto the Grand Pavo on Wednesday. Life is one big learning experience and is the best teacher, so take what you will from my experience, but do yourselves a favor and cherish every damn day in your cars, they really are the Ultimate Driving Machines!!

Sucks that this happened.

Why do you think putting money down is a huge risk?

[Mark Kez]

Originally Posted by BryanCO

Sucks that this happened.

Why do you think putting money down is a huge risk?

You don’t recoup that money of your car is totaled.

[wazzza]

Originally Posted by Mark Kez

You don’t recoup that money of your car is totaled.

Yup. That’s why, if you can, always 0 down.

Say, if you put 10k down and someone totals you as you roll out of the dealership, you may be able to get the loan paid off fully paid off and get a new car again… but you will never see that 10k you put down.

So yeah, don’t put anything down and make sure your insurance has gap coverage.

[Forzanerazzurri]

Originally Posted by Mark Kez

I did, but check this; it’s only valid if your car is under 15,000 miles, mine was 15,600!! Small print!!!

That's ridiculous.

[Greer]

Originally Posted by utsavized

Yup. That’s why, if you can, always 0 down. Say, if you put 10k down and someone totals you as you roll out of the dealership, you may be able to get the loan paid off fully paid off and get a new car again… but you will never see that 10k you put down.

Wow, I knew when leasing not to put money down, but on an installment loan also. When the M5 CS came out last year I was going to get a loan and put $50K down and finance roughly 110K. So if I had done that and my car was totaled right away that $50K would vanish?

[wazzza]

Laws may vary by state but generally, if a car is totaled, insurance pays the cash value of the vehicle that is totaled. In most cases, value of vehicle is lower than what is owed on the loan.

Gap insurance covers that difference.

By paying down payment, you lower the amount you pay interest on, but in case the car is totaled and gap coverage kicks in, they would have to pay lower for gap because your down payment actually lowered the total loan amount.

It doesn’t make sense to pay down payment unless you really want you payment lowered or in situations where internet rates are really high. But generally, loan rates are low and there aren’t much upsides to putting money down.

But then, you could also argue how often does a car get totaled in one’s lifetime? So it’s not that it’s a super risky thing to do. People do it all the time. It’s just that if such a situation arises, down payment is usually gone.

In case of 50k down, you wouldn’t lose everything, esp if your vehicle is worth more than that. Basically the equation is value of the car vs. What you owe the bank.

[blackbeard31]

Originally Posted by Greer

Wow, I knew when leasing not to put money down, but on an installment loan also. When the M5 CS came out last year I was going to get a loan and put $50K down and finance roughly 110K. So if I had done that and my car was totaled right away that $50K would vanish?

Unfortunately, its true in most cases. GAP coverage is great but only covers you for the cost of the loan. If the car holds value than you have an argument, insurance will always try to underpay you. The downside of no down payment though is a larger payment and more interest paid over time. Every other car I have owned I put 0 down. The MY23 M3 I have on order will be the first car I put money down on but just enough to get it into a comfortable payment range.

[MaC-N54-E82]

Sorry to hear about your unfortunate turn of events OP. As others have said the important thing is you are healthy and cars are replaceable. Insurance in the case of a vehicle being totaled, unless gap insurance is involved, pays the cash value of your car, regardless of the amount owed. Putting zero down on a car has no bearing on a car’s cash value. As an example if you purchased a vehicle outright, and it gets totaled later that same day the insurance company pays you out that value of the car, not zero. I encourage everyone to read their insurance policies and understand what you’re paying for in the unfortunate event they need to be utilized.

[Indo Rider]

Originally Posted by MaC-N54-E82

Sorry to hear about your unfortunate turn of events OP. As others have said the important thing is you are healthy and cars are replaceable. Insurance in the case of a vehicle being totaled, unless gap insurance is involved, pays the cash value of your car, regardless of the amount owed. Putting zero down on a car has no bearing on a car’s cash value. As an example if you purchased a vehicle outright, and it gets totaled later that same day the insurance company pays you out that value of the car, not zero. I encourage everyone to read their insurance policies and understand what you’re paying for in the unfortunate event they need to be utilized.

This. I don't know know why people are saying all this "you will definitely never get your down payment back so never put a down payment"... Zero down is a great way to guarantee you to owe more than the car is worth though.

[beden1]

Originally Posted by MaC-N54-E82

Sorry to hear about your unfortunate turn of events OP. As others have said the important thing is you are healthy and cars are replaceable. Insurance in the case of a vehicle being totaled, unless gap insurance is involved, pays the cash value of your car, regardless of the amount owed. Putting zero down on a car has no bearing on a car’s cash value. As an example if you purchased a vehicle outright, and it gets totaled later that same day the insurance company pays you out that value of the car, not zero. I encourage everyone to read their insurance policies and understand what you’re paying for in the unfortunate event they need to be utilized.

I recently bought 2 new vehicles and paid cash for each. The insurance company pays 100% of the book value of the car, not including the sales tax you paid. At least, that is what State Farm says in their policies, and was confirmed by my agent. Hopefully, I never have to test having a totaled vehicle.

['Cane]

Originally Posted by Greer

Wow, I knew when leasing not to put money down, but on an installment loan also. When the M5 CS came out last year I was going to get a loan and put $50K down and finance roughly 110K. So if I had done that and my car was totaled right away that $50K would vanish?

On a car like the M5CS you would have been ok. My friend totaled his 2018 F80 last month (that he bought from me), Imola red, Competition pack, low miles, I sold it to him for $55k in 2020 before the market went nuts (I paid $66k new, $82K MSRP), insurance gave him $66.5k.

[wazzza]

Originally Posted by beden1

I recently bought 2 new vehicles and paid cash for each. The insurance company pays 100% of the book value of the car, not including the sales tax you paid. At least, that is what State Farm says in their policies, and was confirmed by my agent. Hopefully, I never have to test having a totaled vehicle.

The thing is that it is the cash value of the car at the time it was totaled, not the cash value you paid for the car at the time of purchase.

In the current market, things have changed, so these two could be the same amount, or your payout even higher than what you paid for. I bought my 2021 G80 for 83K, drove for two years and traded it in for ~75k. Could have probably sold it private party for closer to 80k (I know my dealer flipped it around in 2 days for 85k). My payoff was only 62k. So, had my car been totaled, I would have gotten more money back.

Originally Posted by Indo Rider

This. I don't know know why people are saying all this "you will definitely never get your down payment back so never put a down payment"... Zero down is a great way to guarantee you to owe more than the car is worth though.

This is generally the case, not an absolute. Cars depreciate heavily in the first three years, esp. ones that fall in the luxury/performance bracket that are expensive to maintain after the initial warranty runs out. My 2018 X5M had a sticker price of 140k, in three years, it was worth 70k. Same with my 2015 M6.

So, let's say a car is worth 100k, you put 10k down and take a loan out for the remaining 90k. You drive the car for 1 year and have paid off another 10k of the loan via monthly payments. The car gets totaled and is valued at 75k (this would not be surprising in a normal scenario where market isn't crazy). You would still owe 5k more to the bank. The gap insurance will cover that. But what about the 10k you put down?

Essentially, your monthly payment that was supposed to be 1k/mo now effectively doubles to 2k/month for your ownership period of 1 year because you didn't get to amortize that 10k over the lifetime of your loan/car. As opposed to that, if you had skipped that 10k down, you would have paid around 300 dollars more a month (~30 dollars month / 1000 dollars of loan), so your effective monthly payment for that 1 year before your car got totaled would have been 1300 instead of 2k.

But then again, this is probably just a lot of finance OCD that not many people care about. Heck, I have probably put another 20k in parts on my car and if it gets totaled, I am not getting any of that back. So, my advice itself a bit hypocritical here. Just wanted to share that in typical scenario, you could lose your down payment, so if monthly payment does not matter, interest is low, you have gap insurance and a heavily depreciating car, it's better to put 0 down and invest that money elsewhere (or spend it in parts and end up in the same situation lol).

Originally Posted by 'Cane

On a car like the M5CS you would have been ok. My friend totaled his 2018 F80 last month (that he bought from me), Imola red, Competition pack, low miles, I sold it to him for $55k in 2020 before the market went nuts (I paid $66k new, $82K MSRP), insurance gave him $66.5k.

The current market is a total outlier. Cars like G8x are holding their value strong and interest rates are nuts. Contrary to everything I have just said, it may actually make more sense to make a down payment in the current market