-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
JRP3
Hyperactive Member
Though the market may not yet realize it residual values on EV's should be higher than that of conventional vehicles, especially EV's such as Tesla's with very large battery packs. Mechanically EV's are less complex and the drive trains more durable, Roadster packs have proven quite durable over time, the new packs should be even more so, and the large packs that Tesla uses will have an easier life than most other EV's. Additionally replacement packs should get better and cheaper as time goes on, an older vehicle in need of a replacement pack could actually be better than when new. A well built EV can be thought of more like a boat, airplane, or home that lasts decades with occasional upgrades. A Model S could be the last car you ever buy.
EVNow
Well-Known Member
Well, I lease the Leaf. I've done extensive financial & non-financial discussions around leasing on MNL. There is simply no one "correct" answer. It is just a question of relative risks. I'd like to lease - not to keep the total ownership cost down - but to allow for easy upgrades, as the technology improves. There is the added benefit of having used EVs available for others to buy.
This is ridiculous.
I have a reservation in for a Model S.
I may now have to cancel it.
I originally planned on financing the 160miler using my own bank.
Then I found out that the range is estimates at 55mph, so now I have to go for the 230 mile version.
I fully expected the panoramic roof, the features in the technology package as well as wall charger and dual charger functionality to be included in the base price.
I'm looking at nearly double the price I was expecting in order to get what I was anticipating. A lease program could help me here, but if there is no lease program I will - at this point - probably have to cancel my reservation
I just can't make this work financially, and going without the mentioned packages would make this a downgrade from my current car, which I just won't do...
My reservation # is in the mid 3900's. Maybe if I am lucky leases will be available by the time I can take delivery, if not There is a real possibility I will have to cancel.
Speaking of leases, does anyone know what depreciation factor the current Roadster leases factor in for the standard 3 yer lease?
I have a reservation in for a Model S.
I may now have to cancel it.
I originally planned on financing the 160miler using my own bank.
Then I found out that the range is estimates at 55mph, so now I have to go for the 230 mile version.
I fully expected the panoramic roof, the features in the technology package as well as wall charger and dual charger functionality to be included in the base price.
I'm looking at nearly double the price I was expecting in order to get what I was anticipating. A lease program could help me here, but if there is no lease program I will - at this point - probably have to cancel my reservation
I just can't make this work financially, and going without the mentioned packages would make this a downgrade from my current car, which I just won't do...
My reservation # is in the mid 3900's. Maybe if I am lucky leases will be available by the time I can take delivery, if not There is a real possibility I will have to cancel.
Speaking of leases, does anyone know what depreciation factor the current Roadster leases factor in for the standard 3 yer lease?
Calculate all the$ you will be saving on fuel every year and applying to what you had budgeted for payments!
I think it will take time for people to transition their thinking about range from ICEs to EVs. No one seems to question the EPA highway rating when they drive 75 mph and get less than the ideal mpg but they expect the full range estimate the EV makers give them. Most of this is the EPA testing cycle and maybe the EV maker's faults. I think they need to advertise their range at 65 mph instead or list 55 mph and 65 mph.
Already done.
I currently spend about $175 per month on E85 (sometimes 93 octane gas) for my 2011 Saab 9-5 Turbo 4.
With the same driving habits, if Tesla's milage calculations hold true and their charging efficiency of ~80% holds true I should be spending about $36.50 per month on electricity for the Tesla after switching to time of use billing and only charging during off-peak hours. (In Massachusetts off-peak power costs are 12.001 cents per KWH in the winter and 12.550 cents per KWH in the summer including basic service, all fees and transmission costs.)
So I should be saving ~$140 per month, which is a pittance compared to what a Model S will cost when equipped to my minimum standards if financed.
I think I need a lease program to make this work, and I can't imagine I'm the only one. it would be interesting to see how many of the reservations wind up being canceled before delivery...
WhiteKnight
_____ P85 #549 _____ Sig Red / Sig White
I went through all the thoughts and emotions that you described. I decided though to stick with the 40 kWh pack. My feeling is that in 8 years when the warranty expires you can probably buy a 170 kWh pack for $35K and then you've got a brand new car effectively.
I am hoping by getting the 40 kWh I will not have to take delivery before 2013 and they will have at least a leasing option to explore at that time. And of course you can always get a conventional loan.
Leasing is not cheaper than a loan; to the contrary, leasing is guaranteed to be more expensive than financing on a full-life basis.
Why?
A lease bundles two things together: a loan, and a call option that allows you to buy the car to the leasing company at a fixed price. That call option is not free, even if the turn-back value is fairly set.
The big problem in my mind with a Model S lease is that the terminal value is likely to be very unfairly set. With no track record for this car, or even for a car in this class, any rational leasing company will set a very low terminal value, and/or demand a high premium for this call option.
The only benefit of the lease is a cash-flow matter: if I borrow to buy a car, at the end of the loan period I will have to have repaid the full principal (but then I'll own a car free-and-clear); if I lease to obtain the car, at the end of the lease period I have nothing except the call option on the car, which I'll have to find money to exercise (and getting a used car loan for this amount ain't great).
If the cash-flow problem has you down, refinance your house. It's a great time to do that anyway -- lock in the jaw-dropping fixed rates of today while you can. Use the refi to draw out some home equity (assuming you have a home, and home equity) and use that to pay for all or part of the Model S.
Why?
A lease bundles two things together: a loan, and a call option that allows you to buy the car to the leasing company at a fixed price. That call option is not free, even if the turn-back value is fairly set.
The big problem in my mind with a Model S lease is that the terminal value is likely to be very unfairly set. With no track record for this car, or even for a car in this class, any rational leasing company will set a very low terminal value, and/or demand a high premium for this call option.
The only benefit of the lease is a cash-flow matter: if I borrow to buy a car, at the end of the loan period I will have to have repaid the full principal (but then I'll own a car free-and-clear); if I lease to obtain the car, at the end of the lease period I have nothing except the call option on the car, which I'll have to find money to exercise (and getting a used car loan for this amount ain't great).
If the cash-flow problem has you down, refinance your house. It's a great time to do that anyway -- lock in the jaw-dropping fixed rates of today while you can. Use the refi to draw out some home equity (assuming you have a home, and home equity) and use that to pay for all or part of the Model S.
WhiteKnight
_____ P85 #549 _____ Sig Red / Sig White
Technically it's a put option, not a call option, but sometimes it is free because the captive leasing companies choose to charge the same (or even lower) finance rate to make the leases look attractive.
You are exactly right that the lease economics all depend on the residual value and the way the leasing company protects itself is to reduce the residual value. So most likely with no history the leases will not be very attractive BUT they might be.
In the case of some captive leasing companies they bump up the residual value too, again to help sell cars. Something that Tesla hopefully will not have to do for years to come (spoken as a shareholder).
Completely unimportant, but it's really a call option, because title remains with the lease company unless you choose to buy the car at the end of the lease, rather than you having the option to sell back the car.
As I said before, leasing only decreases your payment, but not your total financing cost. You will have better equity and more money in the bank by purchasing vs leasing.
WhiteKnight
_____ P85 #549 _____ Sig Red / Sig White
Similar threads
