Financing the car after lease ends

[talhas3]

Has anyone here financed the car to keep it outright after the lease ends?

Wondering if it’ll make sense to do that? Is that something I can call Tesla finance and ask them about? How much it’ll be monthly to finance it so I can plan accordingly.

Just got my Model S 75D 2 months ago and I love the car. Wanna keep it for the long run. Wanna put a lot of miles on it and enjoy the car.

Wondering what I should know about if I wanna keep the car long term Instead of giving it back at lease end.

Thanks

 

[steve841]

Technically the leasing company owns the car. You'd have to start with them.

 

[RScottyL]

That is the good thing about a lease that it is a "try before you buy" situation!

I personally have not done that yet, but have been leasing my cars for years.

When it gets close to the end of the lease, you can see how much the car would be appraised for in current market value, and also check your payoff.

If your car is worth more than your payoff, then it would be a good idea to buy it.

If your car is worth less, it might be a better idea to turn in the lease and lease another one!

For the long run, you may want to see if an extended service contract is available on the car, if you think you might want to do that!

 

[THXULTRA]

That is the good thing about a lease that it is a "try before you buy" situation!

I personally have not done that yet, but have been leasing my cars for years.

When it gets close to the end of the lease, you can see how much the car would be appraised for in current market value, and also check your payoff.

If your car is worth more than your payoff, then it would be a good idea to buy it.

If your car is worth less, it might be a better idea to turn in the lease and lease another one!

For the long run, you may want to see if an extended service contract is available on the car, if you think you might want to do that!

Usually when you lease a car though the buyout at the end is more then the car is worth so doesn't make sense to buy it... Have leased many cars but never bought any after the lease was up. Big advantages to leasing are you get a new car all the time, also always under warranty. Buying a car always makes more sense though financially.

 

[JPUConn]

With the lease you already missed out on the $7,500 tax incentive.

Personally since you are already in the lease I would continue with it and look at it as a 'buy-back guarantee' type situation. If at the end of your lease there is new battery technology or major changes that cause your vehicle value to drop you don't need to worry about it and just turn the car in and pay the pre-defined mileage overage fee ($.25/mile?).

Additionally depending on your state you may only be paying sales tax on the monthly lease amount vs if you had purchased the vehicle you'd have paid sales tax on the entire amount (and spread it over the course of the loan).

At the end of the lease if you are still in love with the car you can always purchase it for the per-defined lease buy-out

 

[Lhshockey24]

Unless you then plan on keeping that car for another 8-10 years, it's not worth it financially, just lease again. If you look at your original "lease quote" they add up the cost of the lease PLUS the money you spent during the lease. That total number is usually 20% higher than the price of the car originally. During a lease you pay about a 5% 'lease rate', horrible compared to BMW or MB for example.

These cars are like iPhones in a way... Think about a 2014 built Model S 85D now compared to a 100D. That was only 3 years of iteration, so imagine what Elon and team will pull off another 3 years from now! You'll be dying to lease the new 175D

 

[Lodo1000]

Worse case scenario if you bought will be to trade it in and take the hit - all for the joy of the latest greatest.

 

[GTIceman]

I was considering this after the lease ends on mine. I don't know how Tesla is but I know other companies often drop the buyout price based on market and inventory. I like my S but I would pay slightly more for less miles and facelift. My buyout, like most, is crazy.

 

[ReturnZero]

Keep in mind Tesla applies the $7500 tax credit by increasing the residual value of the car, which means if you buy it out at the end (which is done by paying/financing the residual to keep it) you're essentially giving that credit away.

It will almost certainly not make financial sense to buy it out at the end.

 

[jjh1234]

Keep in mind Tesla applies the $7500 tax credit by increasing the residual value of the car, which means if you buy it out at the end (which is done by paying/financing the residual to keep it) you're essentially giving that credit away.

It will almost certainly not make financial sense to buy it out at the end.

I was wondering how the $7,500 works on a lease. Are you saying that Tesla somehow receives the $7,500 from the government?

 

[chillaban]

I was wondering how the $7,500 works on a lease. Are you saying that Tesla somehow receives the $7,500 from the government?

The leasing company does get to claim it, yes, and they get to choose how they share that with you. In Tesla's case, the way they do so is by bumping your residual by $7500, so your buyout price at the end of your lease is $7500 higher than it otherwise would be, but that also means your total lease payments get a $7500 discount.

This arrangement makes it a pretty bad deal to buy out your Tesla.

 

[ReturnZero]

I was wondering how the $7,500 works on a lease. Are you saying that Tesla somehow receives the $7,500 from the government?

The leasing company does get to claim it, yes, and they get to choose how they share that with you. In Tesla's case, the way they do so is by bumping your residual by $7500, so your buyout price at the end of your lease is $7500 higher than it otherwise would be, but that also means your total lease payments get a $7500 discount.

This arrangement makes it a pretty bad deal to buy out your Tesla.

Yep, exactly. The owner of the vehicle gets to claim the credit, and in the case of a lease the owner of the vehicle is the leasing company. They "pass this on to you" by artificially raising the residual by that amount. This works in that it reduces your payment by that amount, but you basically have to pay back all those savings when you buy the car out.

 

[talhas3]

I’m driving the car a lot as I had 18k miles on my Mercedes lease.

Wondering how Tesla will be at end of lease if I go into another lease?

Anyone experienced this for those who are finishing off their leases ?

 

[Lhshockey24]

I’m driving the car a lot as I had 18k miles on my Mercedes lease.

Wondering how Tesla will be at end of lease if I go into another lease?

Anyone experienced this for those who are finishing off their leases ?

Traditional manufacturers have incentives from corporate to cover mileage penalities or cover a few months of remaining payments. BMW would always call 6 months early offering to start a new lease regardless of mileage on the current lease. Tesla doesn’t operate with these incentives so I wouldn’t expect any variance. But I too am curious if anyone has seen anything to the contrary.

 

[ReturnZero]

Traditional manufacturers have incentives from corporate to cover mileage penalities or cover a few months of remaining payments. BMW would always call 6 months early offering to start a new lease regardless of mileage on the current lease. Tesla doesn’t operate with these incentives so I wouldn’t expect any variance. But I too am curious if anyone has seen anything to the contrary.

Came here to say almost exactly this. Dealers can wipe out a lot of negative numbers (miles, remaining payments, etc) if you buy another car. I think Tesla basically just says "well you're over on your lease" and waits for payment and if you want another one you're more than welcome to place an order.

 

[Bridor]

My Model X has over 40,000 miles on it with a 30,000 mile lease. We still have over a year and a half to go... I think it would be in my best interest to keep the car with the $58,852 residual price...

Brent

 

[Vortexx]

Keep in mind Tesla applies the $7500 tax credit by increasing the residual value of the car, which means if you buy it out at the end (which is done by paying/financing the residual to keep it) you're essentially giving that credit away.

It will almost certainly not make financial sense to buy it out at the end.

This is true. Leasing a Tesla (compared to purchasing) is a poor strategy if you have any possible thoughts of keeping the car for this reason.

 

[Lhshockey24]

My Model X has over 40,000 miles on it with a 30,000 mile lease. We still have over a year and a half to go... I think it would be in my best interest to keep the car with the $58,852 residual price...

Brent

If only these damn cars weren’t so fun to drive this wouldn’t be an issue!

 

[GTIceman]

If only these damn cars weren’t so fun to drive this wouldn’t be an issue!

If only the Model 3 turned out to be more like what we wanted this wouldn't be an issue either! We don't need the size of the S but we do not like the Model 3 at all. We love the Roadster but too rich for my blood.

 

[Skipdd]

If only the Model 3 turned out to be more like what we wanted this wouldn't be an issue either! We don't need the size of the S but we do not like the Model 3 at all. We love the Roadster but too rich for my blood.

My sentiments exactly. My current thinking is that at the end of this new lease I will move to a Model 3 AWD and possibly Performance if they have it. And buy it outright.

I posted in another thread, but I just went through the scenario you guys are discussing. Previously had 85D with 51285 miles on a 15k 3 year lease with 5.5 months to go. After some back and forth, I paid out remaining payment + mileage overage and leased an inventory S100D with identical options (everything but rear facing seats) for $4k less (95 miles on car which is pretty much nothing). So, no real breaks on the lease though working with them I was able to find an inventory car that helped reduce the hit.