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Second: Mechanism for Settling a Vehicle Finance Lease Contract in the Event of Total Loss

No: 4986/99 Date(g): 1/1/2020 | Date(h): 6/5/1441 Status: In-Force

Effective from Jan 01 2020 - Dec 31 2019
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A. Unconsumed Amount of the Advance Lease Payment:

Unconsumed Amount=(Financing Period–Number of Last Due Payment)×( Advance Lease Payment \Financing Period ​)

 

B. Difference Between the Remaining Principal Amount and the Insurance Compensation:

Difference=Remaining Principal Amount (including the last payment, if any)−Insurance Compensation

 

  • If the amount is greater than zero, multiply by (Lessee’s Responsibility Percentage for the Accident).
  • If the amount is less than or equal to zero, it is taken as is.

 

C. Net Settlement Amount:

=Unconsumed Amount of the Advance Lease Payment (A)−Difference Between Remaining Principal Amount and Insurance Compensation (B)

D. Action Regarding the Net Settlement Amount:

  • If the net settlement amount is greater than zero, the lessee is compensated with the full net settlement amount minus any outstanding amounts owed by the lessee before the total loss, if applicable.
  • If the net settlement amount is less than zero, the lessor is entitled to claim the net settlement amount from the lessee, plus any outstanding amounts owed by the lessee before the total loss, if applicable.