Are you going to lease or finance your Model 3?

[internalaudit]

I logged into MyTesla this morning and noticed the eight year financing for the S dropped from 2.5 to 2% now.

Leasing is either three or four years.

For those in the know, what are the advantages of going with leasing or financing (Tesla in-house or through your own financial institutions) a Tesla vehicle factoring in the lack of guaranteed value for trade in, limited battery and drive unit warranty compared to the S and X, and other things like whether you can write the expense off completely or partially.

I know tax implications will be different among countries.

 

[run-the-joules]

Leasing isn't going to be offered for a while.

I will either purchase cash or finance depending on the interest rate. With credit as cheap as it is now, I will most likely finance.

 

[FalseProfit]

Leasing isn't going to be offered for a while.

Was this the case with previous Tesla models? I'm likely financing, but was considering leasing as a possibility.

Edit: happened to read the Online Configurator Preview thread just after posting and I see multiple claims that leasing will not be available immediately.

 

[DarylLafferty]

Probably cash unless they offer sub-1% interest rates.

 

[WileyTheMan]

Did Tesla offer leasing when they released the Model S?

 

[siggyfreud]

Going to finance about half and down payment the other half so my payments are in my psychological comfort zone.

 

[run-the-joules]

Did Tesla offer leasing when they released the Model S?

Not at first.

 

[Skione65]

I logged into MyTesla this morning and noticed the eight year financing for the S dropped from 2.5 to 2% now.

Leasing is either three or four years.

For those in the know, what are the advantages of going with leasing or financing (Tesla in-house or through your own financial institutions) a Tesla vehicle factoring in the lack of guaranteed value for trade in, limited battery and drive unit warranty compared to the S and X, and other things like whether you can write the expense off completely or partially.

I know tax implications will be different among countries.

@internalaudit,

Who takes an 8 YEAR car loan???!???

Ski

 

[run-the-joules]

Was this the case with previous Tesla models? I'm likely financing, but was considering leasing as a possibility.

Edit: happened to read the Online Configurator Preview thread just after posting and I see multiple claims that leasing will not be available immediately.

The S was not available for lease at first, I don't believe the X was either but could be wrong on that.

 

[run-the-joules]

@internalaudit,

Who takes an 8 YEAR car loan???!???

Ski

Two types of people:

1. People whose financial decision making skill is similar to the Jenga skills of a Parkinson's sufferer

2. People who keep their cars for a really long time, could afford to buy the car for cash, and are taking advantage of a low interest rate to use the cash to make more money for them elsewhere.

Mostly the former.

 

[internalaudit]

@internalaudit,

Who takes an 8 YEAR car loan???!???

Ski

If at 2% or below, I would. My mortgage rate is slightly higher and it's not like I will use the extra cash flow to buy stuff I don't really need.

Still rocking my 02 Civic bought in 2003 and my bought used Note 4.

I usually choose my financing term so rates are decently low, so usually 3 to 4 years but will take a 2% eight year loan from Tesla if the ESA is customer friendly.

 

[kaffine]

I will be financing I can't afford to lease it the mileage penalty would bankrupt me (I drive 50k miles a year).

Not sure how many years I will go. Have to go long enough the payment is in my comfort zone but depending on rates may go longer. From what I have seen going much past 5 years the interest rates start going up.

I do tend to keep cars a long time I bought my current car in 06, I have only recently started driving 50k miles a year though.

 

[FlyingKiwi]

Won't be buying it if I can't pay at least 50% up front, will finance the remainder.

 

[ggies07]

Won't be buying it if I can't pay at least 50% up front, will finance the remainder.

I've saved 14k + hoping for at least 6k for my car trade-in

 

[SageBrush]

@internalaudit,

Who takes an 8 YEAR car loan???!???

Ski

It is not so long ago that 6 year car loans elicited comments like yours. Now they are common
Part of the reason is that people are more indebted than ever, but the other reason is that car quality has improved dramatically.

 

[voip-ninja]

Leasing isn't going to be offered for a while.

I will either purchase cash or finance depending on the interest rate. With credit as cheap as it is now, I will most likely finance.

Agreed. I could also pay cash but will take advantage of low rates while they are still available.

 

[K-MTG]

If I can't get a 0.9% loan, I will just buy cash. When I was purchasing the X they had a promotion for 1.49% last year

 

[heysteveh]

Who takes an 8 YEAR car loan???!???

Apparently more people all the time. Here is a quote from an recent article (link at bottom):

"Ten years ago, the average loan length for new vehicles was 63.3 months; in November, it was 68.3, according to Edmunds.com.

Credit-tracking firm Experian says loans with terms lasting 73 to 84 months accounted for nearly 28% of all new vehicles financed in the third quarter of last year, up 17% from the same quarter a year ago. That share hit 30% earlier in 2015, the highest percentage since Experian began reporting the data in 2006.

Longer loans have helped buyers go up a level in size or luxury, according to Caldwell, but they have also been a “big driver” of auto sales generally. Last year was among the best ever for the industry, with some analysts estimating that more than 18 million vehicles sold."
Why some Americans are using 8-year loans to buy fancier cars

 

[internalaudit]

^ At least they are keeping their cars longer. Probably makes more sense if financing interest rates were just a few bps higher than doing three or four year terms and it is IMHO definitely more sensible than leasing similar priced cars every three or four years, unless you can write the lease amounts off against business income.

I think for many of us, a Model 3 is an upgrade from what we currently drive, and it interests us because it's an electric car with access to the SCN (at least for most of you). I'm still waiting for other BEVs to come to market and find out if the 220 mile Model 3 will be enough for our needs (especially during winter) and the extended warranty details before deciding.

My household can likely afford entry-level luxury cars but at this day and age, most of the mainstream vehicles already have 90-95% of the features these "luxury" cars have and I wouldn't mind owning these finer luxury cars if they were more bullet-proof and trouble-some free.

Even with our RAV4 Hybrid, with extended warranty, the Lexus NX300H would have been $20k CAD more expensive and I think what we will be missing are:

• better ride quality and handling
• automatic folding side mirrors
• auto dimming side mirrors
• 110V socket
• maybe ventilated seats (I have forgotten)
• perhaps one or two other minor features that aren't even safety-related

Definitely not worth the $20k difference to me (wife is the primary driver and she wanted a SUV but I wanted a Toyota hybrid for fuel savings).

I think most BEV makers are pushing as to finance because they are offering really high lease rates. They probably don't want to be holding the bag if residual value falls way below what is stated in the lease agreements.

 

[ratsbew]

Cash for sure. The hassle of a loan just isn't worth the potential benefit of making a few hundred bucks by investing the money.