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Adding AP to a leased vehicle... possible?

Discussion in 'Model S' started by ozweepay, Oct 12, 2015.

  1. ozweepay

    ozweepay Member

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    Jul 16, 2015
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    Location:
    Boulder, CO, USA
    I leased without autopilot (given that it's unclear the full feature-set will be available within my 3 yr lease).

    I wonder if it's possible to add AP to an existing lease given that it's a $3000 added charge. It's a strange thing to consider because it's a software-only change, done OTA, but does (presumably) increase the value of the car by some amount.

    Does AP depreciate along with the car's hardware? Or does it hold its value (or even appreciate!) over time?

    And the big question: can US Bank even handle a mid-lease change like this?
     
  2. AEdennis

    AEdennis Active Member

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    Wouldn't this change be handled like any "aftermarket" change to a vehicle. i.e. If you were to swap out the wheels from 19 to 21 or get a new custom front or add a spoiler or red calipers...

    Basically, thanks for adding, but remember it's on your dime.
     
  3. shokunin

    shokunin P85 & S40

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    Irvine, CA
    It would be out of pocket. If you had opted for AP on the lease, your residual may have been a little bit higher and the car $500 cheaper vs adding it after.
     
  4. tstafford

    tstafford Member

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    I suspect you will pay the $3K out of pocket and it will have no bearing on the lease.
     
  5. kmtl

    kmtl Member

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    May 31, 2015
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    Cincinnati, OH
    This issue is what made up my mind to add autopilot when I leased. My out of pocket cost is less than half of the add-on cost of the option. If I were now faced with adding it as a $3000 after-market item I would be paying more for the bank's benefit than for my own. I wonder if the bank would rewrite the lease to adjust for the higher retained value? I know, that's crazy talk.
     
  6. davewill

    davewill Member

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    San Diego, CA, US
    Are you planning to turn it in? I would think the car's value would be much greater than your residual. If it is, you should buy the car, then sell it if you don't want to keep it. If you buy it off lease, then any extra value that AP adds would go in your pocket.
     
  7. brkaus

    brkaus Member

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    The way the $7,500 credit is handled makes it difficult to justify retaining the car at the end of the lease. Rather than decreasing the initial value, it increases the residual.

    It dies still reduce the payments but does change the math in the purchase decision.
     
  8. skilly

    skilly Member

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    you're part owner....grab it on your dime - they won't rewrite a lease for you. So it will be paid in full separately if you want it - but don't think to hard about it being "smart" to upgrade.

    its a depreciating asset so all upgrades are a wash in terms of value and *may* only make it more attractive to buyers in the long run (and can also make it harder to sell too!). Pretty safe to say that when you by a car in year 3 you have pretty much thrown away 50 cents of every buck you put in it. These added costs are even more heavy on the depreciation hit.

    Im sure you know this but unless you have a write off, Leasing is about the most expensive way to buy a car known to man (and restrictive). If you could take the $3K and right it into your lease, that money would cost you more over the total cost of the car than a high interest rate CC.
     
  9. tstafford

    tstafford Member

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    Are you sure about this math? I kind of understand what you mean but the buy-out on my P85D is fairly low based on the current CPO prices. Numbers:
    - My buy-out is $69K on a $117K sticker car after a 36-mth/30K mile lease
    - Currently $69K puts you at the extreme low end of available CPO P85 cars

    I'm not sure I'd want to buy my car at the end of the lease, but it seems like it might at least be a consideration financially. I'm not sure the $7500 makes it prohibitive.
     
  10. ozweepay

    ozweepay Member

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    I can confirm that US Bank adds the $7500 federal tax rebate to the residual value (which makes NO sense at all... the car's value does not increase by the amount of federal tax rebate received by the bank). As brkaus mentioned, this does have the net effect of lowering my lease payment, but makes the residual significantly higher.

    This means I almost certainly will not be buying my Model S at the end of my lease. Although, I get to decide that three years from now, and if CPO prices are significantly above my residual, I can buy the car and resell it at a profit. Meanwhile, if the bottom falls out of that market, I am indemnified. This is one of the perks of having a lease.

    Plus I can write off 100% of my lease payments, effectively making the car cost 50% of its sticker price. (My marginal rate is 36%, plus CO tax of another 5% gets me close to a 50% marginal rate on my last dollars.)
     

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