EV Novated Lease - Car Written off

blah314 on 12/08/2024 - 00:17
Last edited 12/08/2024 - 10:27 by 1 other user

I have managed to write off a six month old purchased-new EV, which was under a novated lease on a 3 year term.

It’s still under assessment, but I’m wondering if anyone has any experience with this or can point me in the right direction - the lease provider and insurance company have been pretty opaque so far

I understand there will be some form of balloon payout for the lease that presumably the comprehensive insurance I obtained (not provided through the lease company, but paid for with pre-tax dollars) will not cover in its entirety (…or does it?). How does this interact with the new for new clause on my Comprehensive insurance? Will the insurance company be able to make the lease company whole through directly providing a new equivalent vehicle? Or could this continue on the old lease?

Any advice or similar situations appreciated.

Financial Electric Vehicle Novated Lease

Comments

  • changyang1230 on 12/08/2024 - 00:50

    The lease provider is not willing to tell you what they want?

    • blah314 on 12/08/2024 - 00:55

      So far I’ve requested a payout amount, which they say will take 5 days, and they won’t give any further details until it’s “officially” written off. Quite bizarre to me they’re not wanting to outline next steps, or even give me a rough idea of how much I’ll be out of pocket.

      • geekcohen on 12/08/2024 - 07:44

        So far I’ve requested a payout amount, which they say will take 5 days

        Really? I got mine within hours. You will know your out of pocket when you know the payout figure vs the insured amount.

  • El cheepo on 12/08/2024 - 01:16

    I understand there will be some form of balloon payout for the lease that presumably the comprehensive insurance I obtained (not provided through the lease company, but paid for with pre-tax dollars) will not cover in its entirety (…or does it?). How does this interact with the new for new clause on my Comprehensive insurance?

    What does your insurance PDS and lease agreement say?

    • blah314 on 12/08/2024 - 01:57

      The lease is with FleetPlus and their documents just refer to paying it out. However when talking to them prior to getting the lease regarding what insurance to get, I received the impression that as it was a new car, if it’s written off, I should be able to roll the new vehicle (replaced under New Car Replacement cover by youi) into the new lease, without having to terminate the lease.

      I don’t know if that’s a standard arrangement for novated lease companies, but now that this has actually come to pass, I can’t see any mechanism for that within the actual lease agreement.

      • changyang1230 on 12/08/2024 - 02:22
        +1

        Curious to see what transpires.

        From the perspective of the lease company, if you are going to get a new car replacement anyway, I don't really see any reason why they want to get the whole thing paid out and cause unhappiness all around. I would have thought they should have some leeway to allow you to "keep the lease going" :(

  • mapax on 12/08/2024 - 06:57
    +3

    I have managed to write off a 6mo purchased-new EV

    What did you do?

    • Sinnerator on 12/08/2024 - 08:41
      +1

      asking the real questions

    • Daabido on 12/08/2024 - 08:57
      +1

      Bumped into a shopping trolly.

    • blah314 on 12/08/2024 - 09:58
      +2

      T-boned, my fault

  • Shadowsfury on 12/08/2024 - 07:17
    +1

    Interested to see whether there's a gap there for you - usually it needs to be explicit in the policy that they'll pay out any remaining on loan/lease as this can sometimes be more than the car's value at the time.

  • geekcohen on 12/08/2024 - 07:44

    How much is the car insured for? vs the finance loan? If the car is insured for less than the finance loan, then you will have a cost to pay the difference.

    The balloon payout has nothing to do with what happens.

  • geekcohen on 12/08/2024 - 07:55

    Put it this way, I was in an accident with a Roo recently and thought mine could be written off. 2.5 year old Ute.

    • Insured for $60k
    • Loan amount $58k (which has a balloon payment)
    • Different $2k

    So I would make $2k less excess.

    I would pay out the loan and then start a new one. So your situation could be very similar, end the current lease and then start a new one.

  • w3dge on 12/08/2024 - 08:52

    These days, insurance provided by leases should have a lease payout clause where they cover the remaining lease costs, it's likely the pds for your insurance says it's lease specific and covers the details.

    Didn't read the bit where you had your own insurance, in which case you are likely relying on new for old. Quite a while ago I did that, and my lease reset, it was in year 4 and I went with a 1 year lease after the replacement.

    (No idea about fleet plus offerings, just in general)

    • blah314 on 12/08/2024 - 09:59

      Good to know… so you had to pay out the old lease and start a new one?

      • w3dge on 12/08/2024 - 10:29

        Most of the fees were paid by insurance, but I think the way the leasing handled it was the new lease finance incorporated the remaining Balloon from the previous lease, I think, it was quite a while ago but I certainly didn't pay out the balloon as a lump sum so something happened.

        They said to me the lease has to change as the VIN had changed (and being four years later, it was a completely different car even though same model).

        Sorry not super helpful, but at least for me, the process was quite smooth and not complicated.

        • blah314 on 12/08/2024 - 13:05

          Hm okay thanks, appreciate the reply

  • djkelly69 on 12/08/2024 - 09:01

    Do you have new for old replacement on insurance if written off? So a new car is provided, and that somehow get substituted in as the leased car (and you don't have to payout at this stage)?

  • Darayus on 12/08/2024 - 12:38

    You should get some money back, since EV price has drop down and your insurance give new vehicle in case it total write-off in first 2 years?

  • amorphous2111 on 12/08/2024 - 20:28

    I have no real experience in this but in a process of getting an insurance out of NL. This is my understanding of the payout figure in the case of written off:

    1. The NL provides total finance for the car to a sum of… call it 60,000.

    2. Interest is included in payment every month. For example at interest rate of 10%, the monthly interest for 60,000 total finance is $500 pm, so for a payment of $2000 pm there will be $1500 to principal. Let say you crash you new EV after 6 month, then about 9,000 has been taken off from your total finance.

    By this time, you owe the NL company 51,000… and probably they have some lease-break fee on top of that since they are expecting payment until the end of the lease. But for simplicity assuming no fee, just the remaining $51,000.

    Now, if the car is insured for the market value, and for some reason the retail price has dropped 10-15k over the last 6 months, then the payout is not sufficient to settle the finance, you will need to cover that shotfall.

    Even if it is insured for new-for-old, and the new car price drop to the tune of 10k (like Model 3, Y), then it could still falling short the finance figure, unless the leasing company allow you to insert that new replacement into the existing lease.

    For me I can save about 1,000 by arranging my own insurance with new for old replacement, still not sure if I should take the risk.

    • blah314 on 12/08/2024 - 21:44

      Interesting. Yeah, my impression was that I would be able to insert a new vehicle into the old lease (so no need for gap insurance), but it’s very possible I misunderstood. Fingers crossed though. I’ll update when it all shakes out anyway.

      • amorphous2111 on 13/08/2024 - 09:56

        Yeah, please make sure you keep us posted about this.

        BTW, if you arrange for insurance yourself, how did you pay for the premium pre-tax? Did you just pay and claim reimbusement from the NL company, assuming that you allow them to include the insurance budget in the monthly payment?

        • changyang1230 on 13/08/2024 - 11:04

          Not OP but yes you just pay for it yourself first, then claim reimbursement. If your budget was insufficient you can always do a catch-up deduction to make sure you have enough fund in the NL funds.

          • amorphous2111 on 13/08/2024 - 12:47

            @changyang1230: Thanks. In the end I decided to go with the NL insurance. After adding all the add-on options to the same level as that of NL, the external insurance is just about 500 cheaper pre-tax so don’t bother for the peace of mind.

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