yes, it’s a great deal, for Tesla. You pay for all the car’s depreciation (plus some extra) and then you have to return the car to them and pay for any damage that occurred to it out of your pocket. They then turn around and sell the car you just paid to repair/repaint as CPO.
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Is this Lease a good deal?
- Thread starter Notaguru
- Start date
I do think a key aspect that often makes leasing worthwhile is the fact that at end of lease you can decide whether to keep it or get rid of it, with a contractually fixed price. If the market is crap for the vehicle you let the manufacturer take the hit. If it's great you can buy it out. With Tesla prohibiting lease buy out it's definitely a mark against it.
You likely made your decision by now but advertised price for lease is below $300 p
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Gauss Guzzler
Safety Score = 42
At $300/mo, your total cost would be $18K for 3 years after sales tax and all fees other than registration.
Purchasing with Tesla's 6.7% financing and qualifying for the $7500 tax credit would cost $38K for 3 years.
So by committing to a lease, you're betting that the car will depreciate by much more than $20K - enough so to make all the commitment, effort, and hassle of a lease worthwhile. So what price do you place on sanity and freedom? If, for example, you'd be willing to give it all up to save $5000, you'd effectively be betting that a 3SR will depreciate by more than $25K over 3 years.
That kind of depreciation hasn't happened to the Model 3, unless you extrapolate the recent Covid-induced bubble - which clearly does not apply to today's very normal pricing. The 3SR+ sold for $38K throughout late 2020 and today they're consistently listing at $30K on AutoTrader with 30K miles. So, about $11K in depreciation if you include taxes and fees.
Purchasing with Tesla's 6.7% financing and qualifying for the $7500 tax credit would cost $38K for 3 years.
So by committing to a lease, you're betting that the car will depreciate by much more than $20K - enough so to make all the commitment, effort, and hassle of a lease worthwhile. So what price do you place on sanity and freedom? If, for example, you'd be willing to give it all up to save $5000, you'd effectively be betting that a 3SR will depreciate by more than $25K over 3 years.
That kind of depreciation hasn't happened to the Model 3, unless you extrapolate the recent Covid-induced bubble - which clearly does not apply to today's very normal pricing. The 3SR+ sold for $38K throughout late 2020 and today they're consistently listing at $30K on AutoTrader with 30K miles. So, about $11K in depreciation if you include taxes and fees.
Financing a depreciating asset is an even worse decision than leasing it.
Gauss Guzzler
Safety Score = 42
Well leases and loans are just two different ways of financing. And it doesn’t matter if the asset is depreciating or appreciating, the cost of financing is the cost of financing.
Some lease have additional criteria or restrictions that loans wouldn’t have. Loans are subject to the “Truth in lending” requirements. Leases are exempt.
I agree they are both different ways to finance but leases have less oversight.
Buying a car isn’t like buying a house (which presumably will go up in value over a long period of time). So unlike a house, financing (taking out a loan to buy) a car is not a good economic decision. There are times when leasing a car is a good value —but Tesla leases are not good value. If you don’t believe me, ask your financial advisor, but if you can’t buy a car in cash you probably shouldn’t be buying it at all…
Gauss Guzzler
Safety Score = 42
There's no interdependent relationship between the cost and the value of an asset. It's not clear what kind of connection you're imagining here. Consider the following examples:
- Appreciating asset: You finance a $500K house and sell it 3 years later for $550K but spent $70K on taxes, interest and commissions
- You're down $20K
- Depreciating asset: You finance a $50K car and sell it 3 years later for $35K but spent $5K on taxes and interest
- You're down $20K
- No asset: You spend $20K on a 3 year car lease
- You're down $20K
Don’t spread your Dave Ramsey crap advice here. Just because you decide to finance a car, doesn’t mean you can’t afford it.
Exactly. I've always bought cars with 0 to 2% financing. When I bought my Tesla few months ago, interest rates were crap so I paid cash
ucmndd
Well-Known Member
JFC another one of these Dave Ramsey drones...
Blanket statements like this are completely worthless. Doubling down on such mindlessly stupid statements with an insult and claiming the financial high ground is even worse.
No, no you’re not correct. You may pay a little to the bank to borrow their money, but you can make that back investing $50k instead of handing it all over at once for a car.
I just did the same in Austin. Saved a few hundred by taking delivery of an in-stock model with 15 miles. The numbers change a few tens to hundreds once the lease company gets involved. Also the app is challenging / just fyi. Anyway I’m through it all and got the lease for $314. Looking forward to delivery and driving and forgetting the numbers! Good luck!
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