At the rate of tech change, who's thinking of just leasing vehicles?

[puncho]

More than any other car, Tesla's tech/decor is always changing. Whether it be the battery, hardware for "autopilot"/charging/etc. there's always an upgrade. However unlike phones/tvs/etc, we're talking about a depreciation of thousands if not tens of thousands of dollars within a few years (and I'm assuming the depreciation may be more than other cars due to this?).

I know the Model 3 won't have any leasing option in the near future but wondering if anyone else is thinking at what point does it make sense to just lease a Tesla. You'd be "one gen behind", but at least the initial build and QC will be handled, won't have to worry as much about production delays and get the "latest" upgrades. I'm guessing actually full level autonomy will take at least several years/decade, and it'd be nice to be able to charge a couple hundred miles in <10 mins or so. At that point, for me I'd be happy to buy the car outright.

Just food for thought.

 

[brkaus]

Lease terms vary in different states, specifically in the way taxes are handled.

More importantly - a lease is just someone else loaning you the car in return for payment. Sure, they take a good bit of risk. But they aren't in it to lose money. They have figured out the terms that give them the best chance of making a profit.

 

[pdx3181]

Even with a lease, you're eating the depreciation.

The benefit of a lease is getting to walk away from the car at the end of the term regardless of its actual value.

But Teslas don't seem to be that far off from their anticipated value at the end of the lease.

 

[Evoyager]

Would be interesting to know the breakdown of purchase vs. lease over past 3 years, residual values, and eventual purchases.

 

[puncho]

Sure, you're eating the bulk of the depreciation and I'm sure they've calculated the terms pretty well. I'm guessing the benefits of leasing may outweigh straight up owning the car compared to ICE vehicles since the tech changes so quickly, especially when it comes to the battery and autopilot tech, which is still in its infant stage. Because of this, changes are exponential rather than "stagnant" unlike ICE cars.

I haven't looked up lease terms/rates so like Evoyager it'd be interesting to know the breakdown if anyone has done so.

 

[boaterva]

I *was* looking at this, but Tesla leases are so bad, I decided not to. And ended up with the most current car a few months ago (AP 2.5, 7 seater, cream, etc.). I can hold my breath that it won't be too obsolete too quickly.

But if they had better lease terms, I'd be tempted, definitely.

It also matters if you are in a properly tax state (hello, Virginia!), where with every new car, you are starting the clock over again, paying 4 plus percent a year on the full price....

 

[brkaus]

For starters, they are using the $7500 EV credit to increase the residual.

A $100,000 car with a $60k residual (guesstimate) becomes a $67,500 residual.

Sure, it reduces your payments a bit, but
- Your much more likely to turn the car back in
- Virtually guaranteed your not going to win the "lease lottery" where the car value is higher than residual so you purchase and resell.
- Your interest is based on a higher capitalized amount

So that improves their upside potential.

Of course, if your the kind that doesn't want to mess with selling a car, then it isn't bad deal because it is a known deal. But it isn't necessarily the best deal.

 

[SuisseDriver]

I *was* looking at this, but Tesla leases are so bad, I decided not to. And ended up with the most current car a few months ago (AP 2.5, 7 seater, cream, etc.).

That's interesting because I was exactly making the opposite remark in another post : at least in Europe, Tesla leasing is tremendously interesting. For the same exact 75D, cream interior, premium package... ordered in August, I had:

• 0,25% leasing rate
• 28kCHF residual value for a 5 years lease.

with a down payment of 23k CHF, it gives me monthly lease of 680 CHF. Honestly, that is unheard off for ANY other manufacturers. I am based in Switzerland but the same is true in France in euros (my dad purchase a 100D so I can confirm).

All premium brand like Mercedes, Audi, BMW... have MUCH lower residual value (less 18k CHF for 100kCHF vehicule) and lease rate is >5%.
So at the end of the day, with the same down payment, I should pay between 1300 and 1700 CHF for other 100kCHF cars.
Tesla leasing are just impossible to beat.

This does not take into account on top of that the gain in road tax or incentive and the big fuel saving. Considering that there is NO comparable car anyway in term of performance / internal room / cargo / equipment for 150-200kCHF, it makes Tesla monthly cost a incredible bargain.

 

[shokunin]

All premium brand like Mercedes, Audi, BMW... have MUCH lower residual value (less 18k CHF for 100kCHF vehicule) and lease rate is >5%.

I wish the US leasing companies would offer than same 0,25% leasing rate (money factor). Instead Tesla is the one offering the lease rates of 5% while Audi/BMW and others with their own financial services offer much more competitive rates and discounts.

 

[brkaus]

I wish the US leasing companies would offer than same 0,25% leasing rate (money factor). Instead Tesla is the one offering the lease rates of 5% while Audi/BMW and others with their own financial services offer much more competitive rates and discounts.

It’s easy to offer discount financing in the US when your negotiating the price of the car as well.

 

[Brovane]

For starters, they are using the $7500 EV credit to increase the residual.

A $100,000 car with a $60k residual (guesstimate) becomes a $67,500 residual.

Sure, it reduces your payments a bit, but
- Your much more likely to turn the car back in
- Virtually guaranteed your not going to win the "lease lottery" where the car value is higher than residual so you purchase and resell.
- Your interest is based on a higher capitalized amount

So that improves their upside potential.

Of course, if your the kind that doesn't want to mess with selling a car, then it isn't bad deal because it is a known deal. But it isn't necessarily the best deal.

The other way to win would be to have the car value on the lease to be higher than the actual residual value. You don't have to pay for the full depreciation of the vehicle.

I have had this exact same worry with Electric cars because of the fast pace of change of the technology. If you compare a 2013 Nissan leaf versus a 2018 Leaf you have a large change in the technology in the powertrain of the vehicle.

 

[NeverFollow]

I was wondering if leasing the battery (based on an annual mileage)
would be a possible option for lowering the initial cost of a car?

For example, in UK the new Leaf price starts at £26,490
but the Renault Zoe (without the battery lease) starting price is £14,245

Then, Renault provides the following battery lease based on annual mileage (see below extract).
-----------------------------------------------------------------------------------------------------------------------------------
Hiring a battery keeps monthly costs affordable.*

This ZOE offering allows you to buy the vehicle and lease the battery,
reducing the purchase price and providing maximum peace of mind.

You only pay for what you need - we personalise your battery hire monthly payment to your requirements
Battery performance guaranteed to at least 75% of original capacity, or we’ll repair or replace it

If you decide to sell your ZOE, your obligation will cease once the new owner takes over the agreement
No worries - complete 24/7 roadside assistance, even if you run out of charge

Battery Hire Pricing - Monthly battery rental pricing, including VAT and assistance for all breakdowns.*

Annual Mileage..<4,500..6,000...7,500...9,000...10,500..Unlimited
22kWh.................£49......£59......£69......£79......£89......N/A
Z.E. 40.................£59......£69......£79......£89......£99......£110

*The Z.E. flex battery hire agreement is based upon annual mileage figures.
The mileage bandings above represent the most commonly requested distances.
If you drive further than this, we will have a banding to suit you.
Please ask your dealer for more details.
Excess mileage is charged (inc. VAT) Z.E. Flex 8p per mile.
--------------------------------------------------------------------------------------------------------------------------------------

 

[TaoJones]

Volvo announced a $600/month subscription plan that includes insurance. New vehicle every year - rinse and repeat.

 

[PhatCat]

I don't want to own an expensive car with cutting edge technology that is very likely outmoded in 3-5 years. So I leased a loaded Cadillac ELR two years ago and leased a fully loaded S75D a year ago. The win is to get a lease with a very low payment that is usually obtained via an artificially high residual. For example, the ELR had a nominal 65K MSRP and i am paying 550 a month for 3 years @ 15K miles per year with 0 cap cost reduction. The S75D was 99K MSRP and i paying 715 per month for a 2 year lease @15K mi per year with 6K cap cost reduction. The residuals are unrealistically high on both but they are the leasing companies' problems not mine.

I knew in advance that by the end of 2018 i should have my Model 3 and i will likely have new better choices from Tesla or even other manufacturers. I just turn in my current cars and jump on the next really good deal.

 

[Birdman325]

In Canada, the leases for a MX (without premium and just the 100D) are close to $2,300 / month.

 

[Xminus6]

With the proliferation of car buying services online and places like CarMax, leasing makes less sense than it used to. I've leased some of my cars because I just don't want the hassle of selling the car. We kept our Model S for a bit over three years, sold it to Vroom and got a check for our equity to offset the downpayment on the X.

Lower payments have never really been a motivation for me to lease, just an added benefit. We'll just buy them all from here on out.

 

[David99]

The rate at which Tesla comes out with larger batteries and better technology I would prefer to lease. Just very convenient to be able to walk away at the end of the lease. Unfortunately it doesn't work for me as I drive 37k miles a year. That's more than twice of what they allow.