Lease vs buy - a spreadsheet

[incrediwoah]

Down with getting a Y. Just don’t know whether to lease or buy. Also always love using spreadsheets to tell the full picture so I was hoping you could take a look and let me know which is a better option.

I definitely like to drive but the leasing is looking attractive

Lease vs Buy

 

[tomagucci]

Because Tesla doesn’t allow you to buy the car after lease the main incentive here is if you are sure you don’t want to keep the car. This way you only end up paying the taxes on the depreciation (overall you will end up saving money vs if you bought the car and tried to sell yourself). Other consideration here are also if you end up going over the allotted miles you’ll be paying a ton extra.

Mostly depends on your priority:

• Are you trying to minimize monthly payments?
• Are you thinking you might not keep the Tesla long term?
• Are you trying to minimize total cost of ownership?

 

[incrediwoah]

Because Tesla doesn’t allow you to buy the car after lease the main incentive here is if you are sure you don’t want to keep the car. This way you only end up paying the taxes on the depreciation (overall you will end up saving money vs if you bought the car and tried to sell yourself). Other consideration here are also if you end up going over the allotted miles you’ll be paying a ton extra.

Mostly depends on your priority:

• Are you trying to minimize monthly payments?
• Are you thinking you might not keep the Tesla long term?
• Are you trying to minimize total cost of ownership?

thinking lease because of technology changing and higher depreciation on this first gen model. I would at most put an extra 10k on it so $2,500 extra. Not sure what the mileage charge is.

 

[N1L CO2]

IMO, putting money down on a lease is a lost cause right out of the gate. Most of that will go to taxes and fees anyways. And unless you can write off the payments as a business operating expense, saving a $100 a month in payments doesn't make a whole lot of sense. Yes, there is an $8k difference at the end of 3 years, but if you lease, you have nothing to show for all the payments you made. I am willing to bet that my MY will be worth a heck of a lot more than what I owe to the bank at that time. If I wanted to walk away after 3 years, I'd be walking away with cash in my pocket or have equity in it to trade-in for a newer Tesla. And the extra $2500 for overage miles, that's 4 more payments to ownership versus a penalty to give the car back.

 

[hakunamattata]

thinking lease because of technology changing and higher depreciation on this first gen model. I would at most put an extra 10k on it so $2,500 extra. Not sure what the mileage charge is.

Extra mileage charge is 25 cents per mile, at least for Model 3, I am assuming it is the same for Model Y.

 

[Levo]

Down with getting a Y. Just don’t know whether to lease or buy. Also always love using spreadsheets to tell the full picture so I was hoping you could take a look and let me know which is a better option.

I definitely like to drive but the leasing is looking attractive

Lease vs Buy

I went through the same exercise and found lease is a better deal. I tried to back in to money factor on lease and although it seems crazy it appears close to zero.

 

[kpinthebay]

Yeah not being able to buy out the lease was a deal breaker for me. At least with a lease and option to buy, you build up some equity if and when you exercise the purchase option.

With the Y and 3, you're purely renting the car. And if your financial situation changes you're SOL. Only option would be to sell to CarMax or carvana or the like. Which I'm sure you know what you'll get. Your arse handed to you.

Not against leases. In fact I leased my past 2 Toyota trucks.

 

[Levo]

I went through the same exercise and found lease is a better deal. I tried to back in to money factor on lease and although it seems crazy it appears close to zero.

Just to follow up, I came to purchase amount spent $33,798 be lease a mount spent $25,386. Diff = $8,412. Further to get money out on buy, car would have to be worth 62.5% after three years. We are pretty close in our numbers. Only advantage to buy is you are not restricted to 10,000 miles per year, boy if you go over at .25 per mile, it is no big deal.

 

[NorCal1]

I couldn't view your spreadsheet. I'd like to pose some things to consider, not saying I disagree with a lease, just things that have come up on my previously leased cars...

1. Purchase incentives possibly not obtained due to leasing?
2. Increased insurance costs due to Tesla requiring a higher level of coverage than you may currently have?
3. Lease end termination fee?
4. Unable to customize much of the car
5. The best lease deal is always a no down payment lease, $4500 is on the upper end of the norm, unless Tesla offers MSD's, thats a big deterrent for me. I don't know what MF Tesla is offering.
6. No lease end purchase offer is a bummer if it ends up having a higher market value than estimated residual value. I leased an Acura years ago that had a market value of $2500 more than the residual value. Cost me $300 for lease termination fee and I sold it outright, prior to the 10 days ownership window which would have required me to pay sales tax (CA) netting a $2200 "profit" ov er just turning it in.

 

[Arktctr]

I am a big lease fan as I tend to switch cars frequently so buying has never paid off personally. I am set to lease my MY for 24 months / 15k per year / Money Factor 0.002019 currently and am happy with the numbers. I also worry less about the car with things like PPF or wraps as if I only have the car for 2 years it’s not as big of a concern for me. To each their own I suppose but everyone has to do the pro/con analysis for themselves to see what’s right. Hope this helps.

 

[hakunamattata]

I am a big lease fan as I tend to switch cars frequently so buying has never paid off personally. I am set to lease my MY for 24 months / 15k per year / Money Factor 0.002019 currently and am happy with the numbers. I also worry less about the car with things like PPF or wraps as if I only have the car for 2 years it’s not as big of a concern for me. To each their own I suppose but everyone has to do the pro/con analysis for themselves to see what’s right. Hope this helps.

Couple of quick questions if you don't mind sharing, are you leasing through Tesla Finance or a third party. What is the residual value for the car

 

[Prof]

I used a lease calculator to come up with Tesla's imputed residual for model Y. I used MSRP including 1200 destination fee, 4500 capital cost reduction and a money factor equivalent to Tesla's 2.49 percent rate on loans. In order to get 499 monthly rate for 36 months residual came to approximately 62 percent. According to a study by iseecars.com as reported by electric.co, three year old model 3 cars lost only 10.2 percent of their value. If the model Y follows this pattern you are giving Tesla 28 percent of the cars value when turning it in after 36 months when leasing vs. buying and then selling it. Even if you sell at a discount it seems you would be way ahead.

 

[hakunamattata]

I used a lease calculator to come up with Tesla's imputed residual for model Y. I used MSRP including 1200 destination fee, 4500 capital cost reduction and a money factor equivalent to Tesla's 2.49 percent rate on loans. In order to get 499 monthly rate for 36 months residual came to approximately 62 percent. According to a study by iseecars.com as reported by electric.co, three year old model 3 cars lost only 10.2 percent of their value. If the model Y follows this pattern you are giving Tesla 28 percent of the cars value when turning it in after 36 months when leasing vs. buying and then selling it. Even if you sell at a discount it seems you would be way ahead.

I am not going to get into the Lease vs Buy discussion as it is very dependent on one's situation. Couple of things to keep in mind the $499 as advertised by Tesla does not include taxes & fees as it is different for each state. Based on my reverse engineering of the numbers with an assumption of Money Factor of 0.002019 (4.85%) the residual value of 67.5 for a 36 months lease with 10K miles per year

 

[Arktctr]

Couple of quick questions if you don't mind sharing, are you leasing through Tesla Finance or a third party. What is the residual value for the car

Through Tesla. I have not taken possession of the vehicle yet so all I can see is the info in my account. They do not list residual unfortunately.

 

[bgrynn1873]

Through Tesla. I have not taken possession of the vehicle yet so all I can see is the info in my account. They do not list residual unfortunately.

The biggest issue I see with Tesla is you can't buy the car. With most leases you can actually pay off the car anytime and at the lease term you have the added option of turning the car back in or getting another loan. You can also refinance the balance if you think interest rates are going to go up and you like the car.

Tesla lease is really not the same no difference then renting the car from enterprise.

If you want to keep the payments low just go for a longer term loan your taking less risk especially when you consider how cheap interest rates are.

 

[Prof]

I am not going to get into the Lease vs Buy discussion as it is very dependent on one's situation. Couple of things to keep in mind the $499 as advertised by Tesla does not include taxes & fees as it is different for each state. Based on my reverse engineering of the numbers with an assumption of Money Factor of 0.002019 (4.85%) the residual value of 67.5 for a 36 months lease with 10K miles per year

Tesla had a loan rate of 2.49% for 72 months so that rate it less should be used for a lease. That would be a MF of 0.0010375.

 

[dale_cooper]

Leasing a tesla is one of the most dumb things you can do... because you're not able to buy the car at the end. In reality, I strongly believe the residual of these cars is going to be SUPER high. Tesla is giving a very conservative residual number (aka low) - so that they can make money on lease returns, and they know people hear the term "lease" and will just do it. Purchasing a Y or 3 is by far the way to go.... if the residual is going to be high (like I think it will) - the purchase is WAY more advantageous.

Do... not.... lease....

 

[Donaldinc]

Based on the depreciation rate of the Model 3 at 10-15% after 3 years, purchasing the Model Y is financially wiser than leasing. Just on pure numbers alone.

 

[steve841]

Leased once. Never again.

In my mind, it's like paying to borrow someone else's car.

 

[N8Howell33]

Based on the depreciation rate of the Model 3 at 10-15% after 3 years, purchasing the Model Y is financially wiser than leasing. Just on pure numbers alone.

I don't know how accurate this is. I have a 2018 model 3 that I paid 56K for (granted I got 10K in tax credits) and Tesla just offered me 33K for it. That's 41% decrease in 2.5 years.