Free supercharging question (Lease related)

[EVSteve]

Quick question regarding policy at the end of a lease.

Does anyone know if free supercharging is lost at the end of a lease even if the vehicle is purchased by the lessor? Relating to a new vehicle purchase where free supercharging is lost when the car is resold.

Thanks in advance.

 

[whitex]

That is a very good question. Did you ask Tesla?

 

[EVSteve]

That is a very good question. Did you ask Tesla?

Not yet. I will on Saturday when I take delivery. Inventory 100D. Leasing as a barrier to a coming refresh and advancements that may slaughter resale. Hit a deer with my previous car, total loss. Been driving a rental for 2 months. However if I decide the newer S is not my type (single screen like Model-3) I’d like to pursue an option in writing to maintain it post lease. Question is more in preparation of debate. .

 

[whitex]

Not yet. I will on Saturday when I take delivery. Inventory 100D. Leasing as a barrier to a coming refresh and advancements that may slaughter resale. Hit a deer with my previous car, total loss. Been driving a rental for 2 months. However if I decide the newer S is not my type (single screen like Model-3) I’d like to pursue an option in writing to maintain it post lease. Question is more in preparation of debate. .

The other drawbacks of a lease if you're planning on keeping it:

1. Higher interest rate
2. You lose the $7,500 federal credit if you buy at the end of the lease, since Tesla simply adds the $7,500 to the residual instead of applying it to the price of the car
3. You pay 3 years of interest on the $7,500
4. You may lose other state rebates/credits for the which leases don't qualify for

 

[EVSteve]

The other drawbacks of a lease if you're planning on keeping it:

1. Higher interest rate
2. You lose the $7,500 federal credit if you buy at the end of the lease, since Tesla simply adds the $7,500 to the residual instead of applying it to the price of the car
3. You pay 3 years of interest on the $7,500
4. You may lose other state rebates/credits for the which leases don't qualify for

Thanks for the extra info. I agree with points 1 & 2. There are no state credits thar I’m aware of in Pennsylvania for EVs over $50,000. On point 3 why would I be paying 3 years of interest on 7,500 if it’s inserted into the residual?

Chances are I will walk away from the car at the end of term. Just in case I don’t like the refresh I’d like to have the free supercharging as an option if bought at the end. The financial hit doesn’t bother me as much if I don’t like the redesign.

 

[whitex]

Thanks for the extra info. I agree with points 1 & 2. There are no state credits thar I’m aware of in Pennsylvania for EVs over $50,000. On point 3 why would I be paying 3 years of interest on 7,500 if it’s inserted into the residual?

Chances are I will walk away from the car at the end of term but just in case you’re d like to have the free supercharging as an option if bought at the end. The financial hit doesn’t bother me as much if I don’t like the redesign.

Yes, it's because the $7,500 is just added to the residual and in a lease you pay the full 3 years of interest on the residual.

If financial hit is not important, why worry about free supercharging? How much per year do you see yourself paying for paid supercharging?

 

[EVSteve]

Yes, it's because the $7,500 is just added to the residual and in a lease you pay the full 3 years of interest on the residual.

If financial hit is not important, why worry about free supercharging? How much per year do you see yourself paying for paid supercharging?

Fair enough. If I do keep it I expect I’ll hold the car for a while after. Tesla just recently increased the cost to SC. I expect further cost increases down the line. 3 years from now the cost may be substantial. Car has a big discount on it which eats the difference in cost as well. $17,580 off 458 miles on the car.

 

[whitex]

Fair enough. If I do keep it I expect I’ll hold the car for a while after. Tesla just recently increased the cost to SC. I expect further cost increases down the line. 3 years from now the cost may be substantial. Car has a big discount on it which eats the difference in cost as well. $17,580 off 458 miles on the car.

Same discount likely applies whether you lease or finance, so not an argument for either

Generally leases are good when you do it for a business (since it makes easy to calculate depreciation) or when pretty much know you'll be getting rid of the car at the end and either don't want the hassle of selling it, or you believe the residual value of the car will be much lower than the bank thinks (for Tesla leases you must subtract $7,500 and use the smaller residual for this comparison, since you would have gotten $7,500 cash on the next tax return). Typically you pay a little extra for the convenience of a lease. In Tesla's case however, there is the added hit of $7,500 if you choose to keep it.

I am curious whether the free supercharging stays with the lessee or not. Update this thread when you find out. If it doesn't it adds yet another penalty for Tesla leasing, though not as large as I don't see most people paying $7,500 in supercharger usage (not idle fees) in their car's lifetime.

Whichever you choose, enjoy the car!

 

[Bridor]

I am leasing my 2016 Model X 60D. You do NOT pay interest on the residual during the lease. What you pay is interest on the payment. So for me, my payment due last month was $962.89 + tax $84.86 = $1,047.75. If I get a loan at the end of the lease, then I will start paying interest on the residual. For me, having a lower payment was important. Our credit is not high enough to get the low interest rates that others seem to enjoy. I guess having six car loans can make things more difficult... My used 2014 Tesla Model S payment is $1,182 per month.

Brent

 

[ItsNotAboutTheMoney]

Quick question regarding policy at the end of a lease.

Does anyone know if free supercharging is lost at the end of a lease even if the vehicle is purchased by the lessor? Relating to a new vehicle purchase where free supercharging is lost when the car is resold.

Thanks in advance.

<pedant>I presume you mean purchased by the lessee. The lessor is the leasing company that owns the vehicle.</pedant>

 

[EVSteve]

<pedant>I presume you mean purchased by the lessee. The lessor is the leasing company that owns the vehicle.</pedant>

Yes, iPhone Autocorrect is a monster these days.

 

[whitex]

I am leasing my 2016 Model X 60D. You do NOT pay interest on the residual during the lease. What you pay is interest on the payment. So for me, my payment due last month was $962.89 + tax $84.86 = $1,047.75. If I get a loan at the end of the lease, then I will start paying interest on the residual. For me, having a lower payment was important. Our credit is not high enough to get the low interest rates that others seem to enjoy. I guess having six car loans can make things more difficult... My used 2014 Tesla Model S payment is $1,182 per month.

Brent

Your payment includes interest on outstanding balance, which consists of residual value + remaining cap cost. Since the residual is the balance at the end, your outstanding balance on which you pay interest always stays above that, so you end up paying interest every month on the residual. Tax is added afterwards depending on where you live.

 

[boaterva]

Supercharging is tied to the car and you. The 'you' part doesn't change. I would assume (yes, I know) then that you would keep supercharging when you keep the car, but definitely a good question to have answered so we all know the final answer. In practice, the same person is 'controlling' the car, but legally, the same 'person' isn't owning the car.

You would hope that they would have forseen this 'conversion' when you buy out the lease.

 

[whitex]

Supercharging is tied to the car and you. The 'you' part doesn't change. I would assume (yes, I know) then that you would keep supercharging when you keep the car, but definitely a good question to have answered so we all know the final answer. In practice, the same person is 'controlling' the car, but legally, the same 'person' isn't owning the car.

You would hope that they would have forseen this 'conversion' when you buy out the lease.

Your information is outdated and does not apply to the OP's question for a new car. We've had 4 Model S with free supercharging, the first 3 had the old supercharging tied to a car, the latest one has the new, referral based supercharging. Since we still have one old and one new, I took a screencap from the MyTesla dashboard highlighting the difference (one word, subtle). The question @EVSteve has is whether buying out at the end of the lease is considered an owner transfer, since legally on a lease the leasing company actually owns the car (not just the lienholder, so for example they can claim the $7,500 tax credit, not you).

 

[boaterva]

What’s outdated? I said specifically it’s about the fact that technically the owner has changed on paper but in practicality it hadn’t since the same person was controlling it (on the same Tesla account/app, for example).

Nothing here to discuss except the legal ownership issue meaning ‘different ownership’ for the purposes of supercharging benefit.

 

[whitex]

What’s outdated? I said specifically it’s about the fact that technically the owner has changed on paper but in practicality it hadn’t since the same person was controlling it (on the same Tesla account/app, for example).

Nothing here to discuss except the legal ownership issue meaning ‘different ownership’ for the purposes of supercharging benefit.

My bad, I misread your post as "tied to the car not you". You are correct that we don't know, need an answer from Tesla. Possibly they did foresee this, just didn't communicate it clearly. Given that Tesla has a very strict and minimalist interpretation of terms and obligations (I still have the 691hp P85D which they conveniently "forgot" to mention is limited to 463hp), I would not be surprised if the supercharging referral only applied to the legal owner, as that would benefit Tesla on their balance sheet. Then again, as you said, they may take a while before their software catches up to this interpretation.

PS> If the supercharging stays with the internet account controlling the car, then people can just sell the car with the internet account controlling it, change the email in the profile, and you now have transferable free supercharging! If you have more than one car, create a new account, transfer the car to it (while you are still the first legal owner) and then sell off the car with the new account login.

 

[boaterva]

Lol, I know! That’s what’s so messed up. Because here it’s really the same person ‘owning’. But not when you get in front of lawyers.

 

[Bridor]

Your payment includes interest on outstanding balance, which consists of residual value + remaining cap cost. Since the residual is the balance at the end, your outstanding balance on which you pay interest always stays above that, so you end up paying interest every month on the residual. Tax is added afterwards depending on where you live.

I have leased so many cars and I love math. I am only paying tax on the payment - that is one of the greatest things about leasing. When you finance, you are financing the cost of the car plus the interest charge. During a lease, you only pay tax on the payment. Your lease payment is based on the difference between the cost of the car and the residual plus a lease charge. You never pay interest on the residual during a lease. My base payment is $962.89. My tax rate is 8.81305237358369% in Maricopa, Arizona. $962.89 x 0.0881305237358369 = $84.86. $962.89 +$84.86 = $1,047.75. In fact, my payment changed when I moved from California to Arizona, because you always pay tax based on the jurisdiction where you live. At the end of the lease, you will have to pay the residual + tax in order to purchase the car. If you finance this purchase, you will then start to pay interest on the residual (+ tax).

 

[EVSteve]

Update: According to my OA.

At the end of the lease free supercharging continues as long as the original lease holder still has the vehicle.

 

[whitex]

I have leased so many cars and I love math. I am only paying tax on the payment - that is one of the greatest things about leasing. When you finance, you are financing the cost of the car plus the interest charge. During a lease, you only pay tax on the payment. Your lease payment is based on the difference between the cost of the car and the residual plus a lease charge. You never pay interest on the residual during a lease. My base payment is $962.89. My tax rate is 8.81305237358369% in Maricopa, Arizona. $962.89 x 0.0881305237358369 = $84.86. $962.89 +$84.86 = $1,047.75. In fact, my payment changed when I moved from California to Arizona, because you always pay tax based on the jurisdiction where you live. At the end of the lease, you will have to pay the residual + tax in order to purchase the car. If you finance this purchase, you will then start to pay interest on the residual (+ tax).

I think you are confusing tax and interest. Your payment already includes interest, then you pay tax on the payment. With a loan you pay interest on the tax, with lease you pay tax on interest which is a wash if you end up buying the car in the end and the tax rate doesn't change throughout your lease period (if the tax rate goes up, you lease monthly amount goes up, but with a loan it does it as the tax is paid the day you pick up the car).