Lease residual fluctuating

[exxer]

Hi everyone, long time read, first time poster.
Have an inventory MX on order, agreed to their lease terms and it went to underwriting. Despite 825+ FICO and comfortable 6 figure, stable income, they want 15% down. On a lease.

The worst part is they changed the residual from $69k (which was on the original agreement) to some unknown number (it wasn't published on the altered agreement). My total lease went up $10k (so over 36 months, it's about 300/month).

Nobody in Finance, Sales or leadership seems to want to honor the original residual, not to mention the non-recoverable 15% down.

Looking forward to joining the family, but not currently feeling welcome.

 

[glide]

Walk away. That’s crazy.

 

[exxer]

What is Tesla's motivation for doing this to a potential lifelong owner and multiple purchases?

 

[evfeh]

Avoid putting down any money on a lease. With such a huge cap cost reduction, might as well finance it.

 

[exxer]

Avoid putting down any money on a lease. With such a huge cap cost reduction, might as well finance it.

thanks, Tesla’s inner unconscious voice. Let me go do that right now.

 

[exxer]

Update: there is a third version of the lease which has been “accepted” for me and my car advanced to the Delivery stage. The total lease amount is increased $2000 more to $62,000.

I am really regretting walking into the Tesla showroom.

 

[euro2012]

Seems like Tesla doesn’t really want to lease you a vehicle. Its almost as if, by leasing, that you pay for the car for Tesla, and when they get it back they can run it as a robotaxi. Seems like buying/financing is the better route to go with that kind of a residual.

 

[kdphan]

Those finance people you're working with are either idiots or just don't care about doing a good job.

 

[redgt]

Walk away. That’s crazy.

exactly. if you aren't happy with the terms or they have changed don't do the deal

tell us the current deal and we'll judge

 

[exxer]

Seems like Tesla doesn’t really want to lease you a vehicle. Its almost as if, by leasing, that you pay for the car for Tesla, and when they get it back they can run it as a robotaxi. Seems like buying/financing is the better route to go with that kind of a residual.

I understand 100% that Tesla would rather me buy it. They are $10 billion in debt

As principle though, you honor your agreement and they are not.

I’d much rather they increase the money factor to something equivalent to 20% instead of changing the terms at the very last phase of the deal.

What’s the term for that?

In other news, the BMW X3 M Competition is sweet.

 

[euro2012]

Perhaps the fact that they won’t give a residual value after 3 years means there are some changes coming?

 

[exxer]

Perhaps the fact that they won’t give a residual value after 3 years means there are some changes coming?

Before I agreed to the lease, I read in other TMC threads that Tesla was "messing with" the residuals because the math did not add up. I guess I had my rose-colored Tesla glasses on and didn't believe it would happen to me. It just did.

Mathematically, I used to get 0 points on a math problem that I did not show my work on. This is exactly the same thing. It's impossible to calculate a lease without a residual, but Tesla did just that. I stopped taking math after Differential Equations, so maybe there is some advanced level math they used that I'm not educated in. Hocus pocus

Hope this helps others.

 

[jeffro01]

I call BS... There's no way with the credit/income you claim to have that you'd have this kind of an issue... Something simply doesn't add up.

Jeff

 

[exxer]

I call BS... There's no way with the credit/income you claim to have that you'd have this kind of an issue... Something simply doesn't add up.

Jeff

Agreed, they are full of it. Happy to post screen shots, but waiting for their response to give them a chance.

 

[M3BlueGeorgia]

Update: there is a third version of the lease which has been “accepted” for me and my car advanced to the Delivery stage. The total lease amount is increased $2000 more to $62,000.

I am really regretting walking into the Tesla showroom.

Really silly question, but why not finance it instead of lease? It isn't like Tesla are giving you a hidden discount in the lease rate.

Have you run the numbers on using a 6 year loan with 15% down instead of a lease?
A loan has a lot more flexibility.

 

[verygreen]

Really silly question, but why not finance it instead of lease? It isn't like Tesla are giving you a hidden discount in the lease rate.

Have you run the numbers on using a 6 year loan with 15% down instead of a lease?
A loan has a lot more flexibility.

Lease is fixed cost(*). There's literally zero unknowns.
Loan - you take your chances on resale value being where you hope it would be.

(*) obv. when you stay within mileage and don't trash the car and so on.

 

[exxer]

Lease is fixed cost(*). There's literally zero unknowns.
Loan - you take your chances on resale value being where you hope it would be.

(*) obv. when you stay within mileage and don't trash the car and so on.

My thoughts exactly. I’m also going to use the vehicle for business. I also don’t like Tesla’s high debt to income ratio. I also am not interested in owning an antiquated piece of tech. I also like having Tesla take the risk of diminished value if I’m hit in the car. I also do not get pride of ownership.

 

[M3BlueGeorgia]

My thoughts exactly. I’m also going to use the vehicle for business. I also don’t like Tesla’s high debt to income ratio. I also am not interested in owning an antiquated piece of tech. I also like having Tesla take the risk of diminished value if I’m hit in the car. I also do not get pride of ownership.

Whereas with a (say) six year loan:
- No worries if your annual mileage is higher than expected (Note: we are averaging over 20K miles per year)
- Complete flexibility over when you trade-in the car.
- If your financial circumstances turn sour, you can easily get rid of an expensive car
- No worries about minor dings

 

[exxer]

Whereas with a (say) six year loan:
- No worries if your annual mileage is higher than expected (Note: we are averaging over 20K miles per year)
- Complete flexibility over when you trade-in the car.
- If your financial circumstances turn sour, you can easily get rid of an expensive car
- No worries about minor dings

- The more you drive your purchased car, the more it depreciates in value, so you are still paying for it.
- Have you tried to sell a $100k+ car with an accident reported on Carfax? Hint: people with that kind of money demand perfection and would rather have a car with no accidents.
- Minor dings are acceptable on leases: up to 2 per panel, less than 2” that do not break the paint: Excess Wear and Use Guide

I think people have a lot of misconceptions about leases and blindly defend their choice. I wish people would fully educated themselves before deciding on the option that best fits their lifestyle.

 

[Dr1er]

I had a somewhat similar issue with an inventory MX I had reserved at the end of December. The car had some miles on it and had a showroom price adjustment. I found out that Tesla is calculating the residuals on the adjusted price and not on MSRP as it used to be, which as you might know, affects for your residual. I tried getting "help" from Tesla Finance as the SA didn't seem to care much; Tesla Finance didn't care much either, but confirmed that's the way they roll now and politely asked me to not contact them. They also never agreed to share the actual residual % they used on the deal, which I am of course capable of figuring out myself if the other numbers are available, but back in Dec when the tax credit was still available and in leases was supposed to be added to the residual; it was not very clear what they were doing. My calculations gave me 53% residual which in my opinion is non-sense. Is this maybe what is happening in your case @exxer?

I walked away from the deal, lost a $100 bucks twice (I first chose one car and then decided for another). I think Tesla's lease terms are really bad. My previous MS lease was really easy and transparent, I was so happy to move away from the traditional dealership buying experience after leasing BMWs and Porsches for years but unfortunately seems like Tesla is moving a little bit backwards in that aspect.

As for other suggestion on financing, buying cash or financing in my humble opinion is not a good financial decision. Of course, everybody's situation is different and I respect fellow Tesla owners who prefer to buy, but I choose to invest my money instead of buying this highly depreciating asset.

Cheers