Lease Question (Federal Tax Credit)

[Jamal]

I reserved a X90D with a $17,000 (discount), the car was listed at $98,000 with FSD, I asked the OA and he advised that FSD can be removed and quoted me a lease of $1080 a month for 12K miles on a 3yr lease, but when i received the monthly quote from Tesla finance its a lot higher ($1220 per month), one mistake that tesla has done in the calculation is that they have not removed FSD, but even if i reduce the price of the car by $3000(price of FSD), i cannot get to the quoted $1080, i have emailed the OA to get his thoughts but wanted to reach out to TMC members to get their thoughts

TESLA Lease numbers

Based on the above calculations i am not getting any Federal Tax Credit in the lease payments, are the above calculations correct? does anyone know how much federal tax credit is given to the lessee, is it the full 100%?

 

[kort677]

I reserved a X90D with a $17,000 (discount), the car was listed at $98,000 with FSD, I asked the OA and he advised that FSD can be removed and quoted me a lease of $1080 a month for 12K miles on a 3yr lease, but when i received the monthly quote from Tesla finance its a lot higher ($1220 per month), one mistake that tesla has done in the calculation is that they have not removed FSD, but even if i reduce the price of the car by $3000(price of FSD), i cannot get to the quoted $1080, i have emailed the OA to get his thoughts but wanted to reach out to TMC members to get their thoughts

TESLA Lease numbers
View attachment 249113

Based on the above calculations i am not getting any Federal Tax Credit in the lease payments, are the above calculations correct? does anyone know how much federal tax credit is given to the lessee, is it the full 100%?

I don't feel like dissecting your quote, but the fed tax credit is taken by lessor and should be built into the price quoted you

 

[7summits]

I reserved a X90D with a $17,000 (discount), the car was listed at $98,000 with FSD, I asked the OA and he advised that FSD can be removed and quoted me a lease of $1080 a month for 12K miles on a 3yr lease, but when i received the monthly quote from Tesla finance its a lot higher ($1220 per month), one mistake that tesla has done in the calculation is that they have not removed FSD, but even if i reduce the price of the car by $3000(price of FSD), i cannot get to the quoted $1080, i have emailed the OA to get his thoughts but wanted to reach out to TMC members to get their thoughts

TESLA Lease numbers
View attachment 249113

Based on the above calculations i am not getting any Federal Tax Credit in the lease payments, are the above calculations correct? does anyone know how much federal tax credit is given to the lessee, is it the full 100%?

He/she quoted you with the typical down payment of $7000ish. Your amount due is $2700. That difference is the difference in the payment

 

[bro1999]

I wonder if the 7.5k is baked into the 17k "other amounts".

 

[kutkuzak]

That $17k 'other' is the discount for the floor model or loaner 90D. I got a similar credit for my MS 90D.
Word of advice, run the actual numbers. Tesla leases are a complete and utter ripoff. I guess if your business is writing it off, whatever, but for yourself a lease is a horrible expense. When I ran their numbers through lease calculators I determined that Tesla was adding *hundreds* of dollars a month in undisclosed lease charges. They use two different residuals as well. They take the $7500 federal credit and *add* it to the residual amount that you have to pay if you want to buy the car out at the end of the lease but the residual the payments are based on doesn't include it. It's a double-whammy really - you pay way more than the car is worth if you want to buy it and they don't even pass that on to you in terms of lower payments during the lease(!). Even figuring in the 'real' residual (which they don't disclose), and the ridiculously high MF (around 5%), you still have 'lease fees' of an unspecified amount added in per month. I don't have the numbers off-hand anymore (I purchased instead - hard to beat 0.99%) but it was about $230 more per month from what it should have been with a traditional lease.

Other reasons to buy:
- Superchargers - One of the biggest benefits of Teslas are the superchargers - which let you drive long interstate distances. Something that factors against a mileage limited lease. If you're not going to put many miles on it, you lose one of Tesla's distinct advantages over other EVs.
- FSD. Let's just say they release FSD in the next year or two. You'll then have 1 to 2 years left on your lease. Do you think Tesla will pro-rate the FSD cost on your lease? Very doubtful. You'd pay full price for FSD, to use it for a limited time.
- Tax credit - you actually get that money back. For the lease you effectively get *charged* that amount!!

Patrick

 

[bro1999]

That $17k 'other' is the discount for the floor model or loaner 90D. I got a similar credit for my MS 90D.
Word of advice, run the actual numbers. Tesla leases are a complete and utter ripoff. I guess if your business is writing it off, whatever, but for yourself a lease is a horrible expense. When I ran their numbers through lease calculators I determined that Tesla was adding *hundreds* of dollars a month in undisclosed lease charges. They use two different residuals as well. They take the $7500 federal credit and *add* it to the residual amount that you have to pay if you want to buy the car out at the end of the lease but the residual the payments are based on doesn't include it. It's a double-whammy really - you pay way more than the car is worth if you want to buy it and they don't even pass that on to you in terms of lower payments during the lease(!). Even figuring in the 'real' residual (which they don't disclose), and the ridiculously high MF (around 5%), you still have 'lease fees' of an unspecified amount added in per month. I don't have the numbers off-hand anymore (I purchased instead - hard to beat 0.99%) but it was about $230 more per month from what it should have been with a traditional lease.

Other reasons to buy:
- Superchargers - One of the biggest benefits of Teslas are the superchargers - which let you drive long interstate distances. Something that factors against a mileage limited lease. If you're not going to put many miles on it, you lose one of Tesla's distinct advantages over other EVs.
- FSD. Let's just say they release FSD in the next year or two. You'll then have 1 to 2 years left on your lease. Do you think Tesla will pro-rate the FSD cost on your lease? Very doubtful. You'd pay full price for FSD, to use it for a limited time.
- Tax credit - you actually get that money back. For the lease you effectively get *charged* that amount!!

Patrick

Interesting. Even with the "slimy" traditional car dealers, all fees and charges are listed on a document you have to sign off on. They may try and rush you to sign stuff and even try and slip some extra items in, but you still can see everything listed before you sign. Sounds like the Tesla leasing experience is no better...and potentially even worse.

 

[kort677]

caveat emptor

 

[kutkuzak]

The Tesla leasing experience is hands down the shadiest thing I've ever dealt with. I was told by the Tesla finance guy that you can't compare other leases to theirs. Theirs is 'special.' For a lease you should just be financing the depreciation based on what the seller thinks the car will be worth at the end of the lease (the residual) with a money factor (the interest). The residual can either work in your favor at the end or theirs. if they put the residual too high - you just walk - you payed less than you should have for the lease term and they have a car worth less at that time then they estimated. If they make the residual lower, then it's cheaper to buy at the end, but you're paying the extra during the lease. Tesla tacking the federal credit that *they* get onto the buyback residual is super slimy - and then still not being part of the residual used to calculate the lease depreciation is shadier still. Nissan on their Leaf leases just counts the $7500 tax credit as if it were a down-payment [as they should.] . Different manufacturers handle it differently. I believe GM applies 'part' of it to the cost but pockets the rest.
Ultimately, the math should be pretty straight-forward. If you take the numbers they give you and put it into a real lease calculator, it won't add up, at all. Good luck getting the 'real' numbers out of them. Either way, it's a total ripoff. It might be nice to be able to walk away after 3 years but you can do that if you purchase it as well. You're just taking a chance on the resell value but at the loan rates they're offering you pay down the principle quickly - and that $7500 tax credit is yours as opposed to the lease. That goes a long way towards any unexpected depreciation.

 

[XHokie]

I reserved a X90D with a $17,000 (discount), the car was listed at $98,000 with FSD, I asked the OA and he advised that FSD can be removed and quoted me a lease of $1080 a month for 12K miles on a 3yr lease, but when i received the monthly quote from Tesla finance its a lot higher ($1220 per month), one mistake that tesla has done in the calculation is that they have not removed FSD, but even if i reduce the price of the car by $3000(price of FSD), i cannot get to the quoted $1080, i have emailed the OA to get his thoughts but wanted to reach out to TMC members to get their thoughts

TESLA Lease numbers
View attachment 249113

Based on the above calculations i am not getting any Federal Tax Credit in the lease payments, are the above calculations correct? does anyone know how much federal tax credit is given to the lessee, is it the full 100%?

Based on the info you provided, here's where I think your payment should be and how I came up with it...

Sales Price: $95,000 ($98,000 - $3,000 FSD Credit)
State Car Sales Tax % : 9.75% (OUCH!)
State Car Sales Tax: $9,262.50 ($95,000 x 9.75%)
Estimated License and Reg. Fees: $730
Leasing Fees: $1,090

Total Sales Price: $106,082.50 ($95,000 + Sales Tax + Lic.&Reg. Fees + Leasing Fees)
Residual Value: $70,750

Amount to be Leased: $35,332.50 (Total Sales Price - Residual Value)
Money Factor (i.e. Interest) Rate: 5.04%
Money Factor Costs: $1,780.76 ($35,332.50 x Money Factor Rate)
Total Cost of Lease: $37,113.26 (Amount to be Leased + Money Factor Costs)

Final Estimated Monthly Payment: $1,030.92

This is closer to what you were quoted...a little less actually. Not sure how they came up with $1,220/month...also not sure how the $7,500 tax credit plays into this or how much accuracy is in what you were verbally quoted. I also cannot speak to how shady or not shady Tesla's lease program is, because I have not leased a car through them. However, the above should be a fairly good way of looking at what your lease payment approximately should be in most cases, not just specific to Tesla.

Hope this helps!

 

[bonaire]

Ask for $7500 cap cost reduction for them to take the Fed Credit.

 

[Jamal]

so what i have learned is you do NOT get the full $7,500 Federal Credit when you lease, its an undisclosed % which get credit which increases the cost of the lease, corrected number after removing FSD

 

[t3sla613]

From what I've seen around, seems like a really good deal.

 

[bro1999]

so what i have learned is you do NOT get the full $7,500 Federal Credit when you lease, its an undisclosed % which get credit which increases the cost of the lease, corrected number after removing FSD

View attachment 250208

That's crazy the fed tax credit isn't clearly broken out (or the lease incentive replacing it). And that money factor....holy schnikes! That's Ludicrous! The money factor on my Spark EV/Volt leases were both .0004 or 0.96%. The Tesla money factor is over 5 times higher.
All incentives were also clearly broken out in my lease paperwork (11.5k worth for my Spark EV lease inclusive of the 7.5k credit). No reverse engineering the lease math to figure out where the incentive was applied.

 

[Galve2000]

if you chose to buy the vehicle at the end of the lease, the $7500 tax credit as added back into the final payment. the customer effectively loses it. it is factored into the lease payment so those are smaller than they would have been without the tax credit, but not by a full $7500 over the lifetime of the lease.

In general Tesla incentivizes their customers to purchase rather than lease. but IMO if you like having a new car every 3 years it is worth it to just lease and have a lower monthly payment, particularly if you only drive 10,000 or 12,000 miles per year (the 15,000 miles per year leases on Teslas are not that great)

 

[bro1999]

if you chose to buy the vehicle at the end of the lease, the $7500 tax credit as added back into the final payment. the customer effectively loses it. it is factored into the lease payment so those are smaller than they would have been without the tax credit, but not by a full $7500 over the lifetime of the lease.

In general Tesla incentivizes their customers to purchase rather than lease. but IMO if you like having a new car every 3 years it is worth it to just lease and have a lower monthly payment, particularly if you only drive 10,000 or 12,000 miles per year (the 15,000 miles per year leases on Teslas are not that great)

So leasing, then buying the leased Tesla = horrible idea.

 

[kutkuzak]

The tax credit is added back into the final payment if you buy it and it is NOT used to reduce what you pay on the lease. The lease definitely isn't a lower payment, not by a long shot. 0.99% vs 5%, losing $7500 (twice, really via the 2 different residuals), undisclosed (but you can calculate them) 'lease fees', mileage charges - it's just a horrible, horrible deal. I say this as someone who has leased before and who had planned to lease my 90D. I would say the only factor at this point is if you think the car is going to lose way more value than the combined loss of higher interest rate, $7500, and lease fees (the hidden monthly amounts + the acquisition/disposition) due to a possible model S refresh and influx of model 3's.

Oh, and don't forget - don't ever put any money down on a lease if you can help it. Car gets damaged, then you're completely out that money. Insurance pays off the owner, you have no car, and you're out your downpayment money with nothing to show for it. That's just a general lease issue but some people don't know it and Tesla tends to *force* a decent amount down on their leases as well.

 

[bro1999]

The tax credit is added back into the final payment if you buy it and it is NOT used to reduce what you pay on the lease. The lease definitely isn't a lower payment, not by a long shot. 0.99% vs 5%, losing $7500 (twice, really via the 2 different residuals), undisclosed (but you can calculate them) 'lease fees', mileage charges - it's just a horrible, horrible deal. I say this as someone who has leased before and who had planned to lease my 90D. I would say the only factor at this point is if you think the car is going to lose way more value than the combined loss of higher interest rate, $7500, and lease fees (the hidden monthly amounts + the acquisition/disposition) due to a possible model S refresh and influx of model 3's.

Oh, and don't forget - don't ever put any money down on a lease if you can help it. Car gets damaged, then you're completely out that money. Insurance pays off the owner, you have no car, and you're out your downpayment money with nothing to show for it. That's just a general lease issue but some people don't know it and Tesla tends to *force* a decent amount down on their leases as well.

I don't get how Tesla thinks it's OK to add back in the $7,500 at the end of the lease if you buy at lease end and NOT apply the $7,500 to at least inflate the residual and base the lease payments on the inflated residual number.
GM's Ally Bank leases on the Volt had Ally inflating the residual $7,500 but at least you received the benefit of paying less depreciation over the term of the lease due to the inflated residual.

Currently, GM Financial now gives only a portion of the $7,500 tax credit via lease incentives (and I think they are inflating the residual of the Bolt slightly too).

 

[ItsNotAboutTheMoney]

"Federal EV Tax Credit in lease pmt" says that any discount you're getting is included in the lease payment. So if you're getting any, it'll be in the "other" line or a mismatch between the payment and other numbers.

 

[kutkuzak]

"Federal EV Tax Credit in lease pmt" says that any discount you're getting is included in the lease payment. So if you're getting any, it'll be in the "other" line or a mismatch between the payment and other numbers.

Seems like a misdirection. Yes, the tax credit is in the lease payment - by how much more you pay at the end if you buy it out.
Just go to any lease calculator (like Lease Calculator - although there is another one somewhere that is a little better that I couldn't find) and plug in the numbers. It doesn't add up - and should. There shouldn't be anything hidden here. They're screwing you on the tax credit which is $208/month at 0% interest by itself.

 

[reciprocal]

Tesla leases aren’t great especially considering high MF, low residuals and that the Federal tax credit as added to the Residual and not as a cap cost reduction.

For the best lease deal find a model with big showroom adjustments e.g. discontinued options and at least FSD removed, there are good deals to be had.

I was told and opted to drive off with as little as lease fees and first monthly payment.

My XP100D leased at ~$1300/mo and X90D is ~$900 month.