Lease/Finance 2021 Model S

[DBV1]

My LR White/Black with 19’s is supposed to be delivered between Aug 29 - Sept 4.

I always lease and this will be my car (my wife always pays cash). If I did buy this time and treated it like a lease and traded it in three years with around 55,000 miles, what would estimated worth be? When I look at Tesla website on used Model S, the used car values seem overinflated. I really prefer to lease, but I don’t think it makes sense with Tesla. I know I won’t keep the car past three years, which is why I always lease and almost always BMW’s.

 

[CapeOne]

Due to chip and other raw material shortages creating inventory shortages, pretty much all cars are "overinflated" right now. This won't be an issue three years from now (hopefully!) and there will also be more competition in the BEV market by then.

Three years ago, a 2018 MS 100D with typical equipment including EAP (but not FSD) would've retailed for around $105k to $110k less the $7,500 federal tax credit. That same car in today's used market with 55k miles is probably worth around $50k wholesale.

An advantage of leasing is protection against unexpected additional resale value drops. If the car is worth more at lease end, you can always buy it and then try to sell/trade for a profit. If it’s worth less, you can just pay disposal fee and walk away. However, if you are expecting to drive 55k miles over the three years you need to be aware of potential excess miles fees if, for example, your lease is limited to 45k miles.

 

[DBV1]

Thanks - makes sense. I always budget the excess mileage fees that I know I historically do.

So, if the 2021 Model S LR I am buying is pre price increases and also less $2k discount for original order last year, that takes my msrp to $79,190. I know it is hard to estimate, but would the car be worth around $50k after 36 months around 55,000 miles or is that too generous?

Really prefer leasing, as I like new cars every two to three years and also don’t like the hassle/guesswork of trade in or selling privately. Just every calculation I have done with the Model S, leasing makes little sense, even though I have tried to make it tilt to leasing.

 

[Rikster]

Some vehicles make WAY more sense to lease than to buy, but Tesla's historically (in my opinion) made very little sense to lease. I also tend to only keep a vehicle for 2-3 years, and I love leases when they make sense.

Example: I leased a Ram 1500 truck 3.5 years ago for $0 down and $220 per month (this was a common lease price at that time). The MSRP was $48k. When the lease was up a few months ago, I traded the truck in for a new truck and received $9k in equity towards the new truck (which means I was actually paid a bit for owning that truck for 3 years).

Another example: My wife bought a new Tesla Model 3 a year and a half ago, and we chose to buy vs lease. She drove it for over a year, and then decided she wanted the new Model Y. We were able to trade her Model 3 into Tesla for nearly the same price we had paid for it. The same thing happened to me with a 2020 Model S - I bought outright for $77k, drove it a year, and traded it in for $77.5k.

Of course, this won't always be the case, and we are in the middle of a crazy price run-up on used (and new) cars that won't last forever, but I still think it doesn't make much financial sense to lease a Tesla (though I suppose it might be advantageous to lease for those using the car entirely for business purposes). Just my 2 cents...

 

[CapeOne]

So, if the 2021 Model S LR I am buying is pre price increases and also less $2k discount for original order last year, that takes my msrp to $79,190. I know it is hard to estimate, but would the car be worth around $50k after 36 months around 55,000 miles or is that too generous?

I think it's too generous but can be difficult to estimate given the expected volatility in the BEV market with increasing competition, potential tax credit changes, etc. Plus, we are still in a crazy car market right now.

But.....using the 2018 MS 100D as an example, the resale value is roughly 50% of original retail after deducting tax credit. If the retail value for your car is $81,190 (ignoring the $2k discount), that would make it $40,595 wholesale in three years with 55k miles. If we use the current $91,190 retail, it would be $45,595 wholesale.