Lease MF for Dec 19 (vs finance)?

[KParks]

Can anyone confirm what the money factor is on Telsa leases for Dec 19? Just trying to work out the math on them and they seem to be hiding a few of the pieces which makes things a little tricky to run the numbers yourself.

The current 3.5% financing rate isn't a horrible rate but I just worry that the resale value on a M3 is 3-5 years isn't going to be great (price cuts, competition, etc.) and so even at a presumably higher interest rate for a lease not taking the gamble on the residual value may make sense (particularly since in CA it reduces your taxes a good amount as well).

 

[JBailey895]

Unfortunately, the 3.5% is for purchases. The correlative MF rate for leases is above 5.3%, and they are closed-end leases, so Tesla controls the market on these. With such high (current) residual values, these would make great leases on the free market, but I don't think there are any leases offered outside of Tesla currently, AFAIK. YMMV.

 

[KParks]

Unfortunately, the 3.5% is for purchases. The correlative MF rate for leases is above 5.3%, and they are closed-end leases, so Tesla controls the market on these. With such high (current) residual values, these would make great leases on the free market, but I don't think there are any leases offered outside of Tesla currently, AFAIK. YMMV.

Thanks! Very helpful, understood they controlled the market and at least knowing the rate is 5.3% helps me run the numbers. As you note Tesla gives high residuals on the leases which, even though the interest rate is pretty bad, doesn't necessarily make them horrible (since Tesla is probably eating value at the end of the lease and so the customer can at least avoid residual value risk (which seems higher than normal with Tesla)... adding in the tax benefits in California (we only have to pay our relatively high sales tax on the lease payment amounts instead of the full price if purchasing)).