Down Payment - Buy vs Lease

I’m trying to understand Buying vs Lease and Down Payments.

What would happen in the following scenarios?

I finance a car with a down payment and then total the car
I finance a car with no down payment and then total the car

I lease a car with a down payment and then total the car
I lease a car with no down payment and then total the car

I’d like to understand how each of these situations would pan out?

Are you familiar with gap insurance? If not check this out. Definitely makes a difference to help answer your question.


There is no real answer , it all depends of current values at the time of this totaling accident . As in your other thread did you research the pitfalls of leasing ?

Do you know what Gap Insurance is ? If you have a real insurance agent instead of some hard to reach online thing the agent might be able to help you .

In all of those circumstances, if you owe more than the payoff you would receive on the wrecked car, you will pay the difference, or the “gap”. That includes the lease. The lease is handled as if 6 months after you leased it, you decided to buy it. The lease company would calculate a payoff amount.

Assume you paid $30K with no money down. 6 months later the car is totaled but worth $25K and you’ve only paid the loan down by $500, the rest of your payments being interest. Insurance would pay you $25K and you’d owe the bank $29.5K or $4500 more than your settlement. If you paid $5000 down, you’d have $500 left for a new car.

You car might not drop that fast in value but it could.

The lease situation is similar.

I guess one could say that the 500.00 down payment will reduce the amount a person owes after the insurance payout by 500.00 but you will spend the same amount of money .

I think I read it differently. The less down the more you owe, and gap insurance pays off what you owe, so basically the less the down payment the more money in your pocket at the end of the day if the car is totaled, IMHOP.

You missed a zero…

Either way, you are still out $5K and gap insurance cost would reflect how much loss you are trying to protect.

my daughters 2 leases, a 2018 Hyundai Elantra And a 2021 VW TIGUAN both include gap insurance in the lease. but maybe its a NY thing that they include it. or maybe by manufacture, I am not sure.

The Gap Insurance is one of those purchase at closing things . A person does not have to have but with 2 lease vehicles I call it a wise purchase . The only drawback is that you can’t cancel some of them until the vehicle is paid off or turned back in .

It’s a “brand” thing.
I found this out when we leased our current Toyota.
Hyuandi gives it to you automatically.
In NYS, however, they have to offer if to you when you do the financing thing and you sign whether you want to buy it or not.
(Not mentioning dealerships Staten Island but I had to go back three times and sign because they messed this up and Toyota Financial kicked it back. I got the GAP insurance by the way).

her 2 leases it came with it free. so maybe those 2 companies include it in lease. im sure the factor it into the price.

While true, insurance agents aren’t that naïve. They’re going to look at what you owe on the car to determine what they’re going to charge you for gap insurance. If your gap is $20,000, they’ll charge you less than if your gap is $35,000. So if you don’t total the car, you’ll end up with less money at the end than if you made a bigger downpayment. Plus you’ll have less money because a smaller downpayment not only puts more interest money in play, but also may result in higher interest rates.


Right now, the typical “money cost” factor in leases is 4%, so even if it were doubled, it’s still small change.

If I paid 10k Down on a car worth 100k. (Lease)

Say it was worth 90k after 3 months and I had paid 2k/mo in payments.

(Total spend 16k)

Insurance would pay 90K and I would get 6K back from the downpayment?

you would lose the down payment and you lose the monthly payments. plus you lose the deductible you have on your insurance plan.

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OK thanks, Is there any situation you would get your down payment back, like what if you had 50k down in the same scenario?

No , you are not going to get anything back . And why put 50000.00 down on a lease when there are plenty of really nice vehicles that you could buy for that kind of money .

OK , I am out of here because this is a silly thread. If not a Troll .


How to Buy a New or Used Car and Get the Best Deal Every Time -


I am thinking that way.

A friend in California had his 6mo old Lexus ES rear ended at high speed and the gap insurance covered close to $10,000 to pay off the loan, good news was that the loan on the new one was .9% interest being at the end of 2019. Doubt he put a huge amount down on the loan.