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How to lease a used, inventory, or CPO Model S

Discussion in 'Model S: Ordering, Production, Delivery' started by MsElectric, Mar 1, 2015.

  1. MsElectric

    MsElectric Active Member

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    Does anyone know of a way to lease a used Model S? Does Tesla offer leasing of their inventory/CPO cars?

    I've always bought my cars outright but for the Tesla it makes sense to lease for tax purposes because I can deduct the entire lease payment via my business. Ideally I'd like to lease a 1 year old Model S so I can have the lease figure based after the initial year of depreciation.

    Does anyone know of a bank that leases high end used cars? I realize it is a risky situation for banks not knowing the residual value of a used car but I can cover that risk for the bank by agreeing to an insanely low residual. of let's say $20K, at the end of the lease period. This way I get the maximum benefit of a tax write-off for the lease payment + depreciation and I can just buy the car at the end of the lease period at a very advantageous cost.

    All I'd need is a willing financial institution...
     
  2. CHGolferJim

    CHGolferJim Member

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    #2 CHGolferJim, Mar 1, 2015
    Last edited: Mar 1, 2015
    Nice idea.

    I'm not a banker, but it seems like writing a lease on a 1- or 2-year old car (post initial depreciation hit) in excellent condition would be a more attractive prospect than a new car. At the very least, attractive within a portfolio. Possible impediments are regulatory and risk-related re multiple owners. Tesla offering this for CPO as per bonaire would be quite attractive, and might do something to support prices of used vehicles overall.
     
  3. bonaire

    bonaire Active Member

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    Interesting idea. Elon said that he had a "secret weapon against the dealerships" lately (Q4 ER call). Could that possibly be a Tesla Finance leasing program for "older CPO cars"? Very little leasing is done by banks for cars other than the current model year due to depreciation. If Tesla can lease the CPO cars, they may be able to generate a nice market with those. "Normal" dealers cannot write their own leases because their F&I office works with banks like Chase or whomever and the financial crisis of 2008 caused banks to stop leasing used cars. But, if Tesla offers used CPO cars with an attractive lease program, that would differentiate against dealers. Tesla does do direct leasing (using their own money) right now for business leases so they could open that up to CPO if they choose to.
     
  4. MsElectric

    MsElectric Active Member

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    A bit on an old thread and so far the only source I hand found that handles CPO leases for a Tesla is Earth Motorcars.

    Does anyone know of another source for leasing a CPO Tesla? It's surprising how practically no one is in the CPO leasing business. The market is wide open for someone to jump in there.
     
  5. Cyclone

    Cyclone Active Member

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    I think the lack of historical data on depreciation and this being a small market (compared to traditional financing roles) is keeping most organizations from digging into this.
     
  6. MsElectric

    MsElectric Active Member

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    This is already be addressed by what is called a TRAC Lease or Open Ended Lease, where the lessee is liable for the actual depreciated value of the vehicle. This is what Earth Motorcars does. So if at the end of the lease period, the car is worth $50,000 and the lease buyout is $40,000 you get the benefit of the $10,000 in equity. If the car ends up being worth only $30,000 and the buyout is $40,000 you end up being responsible for the $10,000. So the lender is protected regardless of actual depreciation.

    It's just surprising there is only company I have found that would lease a CPO Tesla.

    Wish Tesla offered the lease of CPO cars through US Bank or one of their other lease partners as an Open Ended TRAC Lease type arrangement so that the lender is not exposed to unknown depreciation.

    For tax purposes leasing makes so much more sense to us as we then get to write off pretty much the entire depreciation of the car as it is classified as a lease payment.
     
  7. Cyclone

    Cyclone Active Member

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    But how many are in the market of open ended lease for what is still a relatively small-run of vehicles in the U.S. market? Do not get me wrong. This is totally not a problem and there are means to cover any concern; I just think few companies have felt it's worth their time and resources to set it up. Perhaps some day we can change their opinions.
     
  8. MsElectric

    MsElectric Active Member

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    By the market size I don't just mean the Model S. The same way you can get a loan for a any CPO or used car made by any manufacturer, you should be able to get an Open Ended TRAC lease and I'm really surprised with the lack of availability of such leases. The benefit for a business owner is huge. Normally you can barely deduct $3-4K a year for a new car unless you drive a ton of miles (which we don't) but with a TRAC Lease you can deduct the entire depreciation in the form of a lease payment. It's a huge benefit. A TRAC Lease is basically a loan structured as a lease.
     
  9. Cyclone

    Cyclone Active Member

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    Oh, I get it. But I also get how the bean counters at some places work. If they don't already have open ended ease programs in place and don't already have Tesla set up as fully vetted in their system, they may not be willing to go through the process of putting such programs in place. Similar to how many places explicitly exclude Teslas and other makes from certain programs or benefits. They could be overcome, but "management" doesn't feel it's worth the effort, even if customers feel it is.
     
  10. Jersey Shore Tom

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    I know the CPO inventory is very small currently, but has anyone had success leasing a CPO?
     
  11. Zaphod

    Zaphod Galaxy President (former)

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  12. Jersey Shore Tom

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  13. RBowen

    RBowen Member

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    Has anyone been able to lease a CPO model S? The Earth Motors link above wasn't working when I tried it.
     
  14. bonaire

    bonaire Active Member

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    Inv (Inventory) listed cars on ev-cpo.com are New cars - and can be leased as usual (and come with a discount off sticker price).
    CPO are Pre-owned.
     
  15. bonaire

    bonaire Active Member

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    ev-cpo.com shows 379 CPO. Probably more out there unlisted.
     
  16. Zaphod

    Zaphod Galaxy President (former)

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    Link still works for me. Otherwise just search for Earth Motors online and I'm sure you will find them. Only place that I'm aware of for leasing a CPO.
     
  17. Zaphod

    Zaphod Galaxy President (former)

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    Well, that post you quoted was from over 4 months ago.
     
  18. bonaire

    bonaire Active Member

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    I was helping to advertise :)
     
  19. BrokerDon

    BrokerDon Member

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  20. Whistle2Whine

    Whistle2Whine Member

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    Also, give these folks a call Xcelerate , I've been working with them on just such an arrangement, CPO lease
     

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