Christopher Chan
Member
Thanks, that's what I was trying to understand. With my other car purchases / leases, there was a lot of room for negotiation - from the cost of the car to the money factor.
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Thanks, that's what I was trying to understand. With my other car purchases / leases, there was a lot of room for negotiation - from the cost of the car to the money factor.
ucmndd
Well-Known Member
The Tesla experience is like buying a Scion (or a Saturn if you remember those), or buying a used car from CarMax. The price you see is the price you pay. There is no negotiation, at least not on the price of the car. Lease terms might be a different beast.
dhrivnak
Active Member
To me a leaser needs to make money so most people will come out ahead paying cash. So I always pay cash and I do not regret it.
Have any accounting experts done an analysis of Tesla lease cost vs. cash purchase cost, factoring in vehicle depreciation and all costs of both approaches for a business that can write off say 30% of the lease costs?
One topic that many don't discuss on leases is the sales tax on the car, at least for California leases (other states may vary). When you buy you pay sales tax on entire purchase price of the car vs leasing only paying sales tax on payments.
That shiney P90DL @ 140K with 8.5% tax (Los Angeles) is an additional $11,900 in sales tax. If you trade in 3 years later to upgrade to say the latest hypothetical P110DL @140K again, you still pay another $11,900 in sales tax. There's no trade-in sales tax credit in California.
If you lease, you're only paying sales tax on your monthly payment. If you pay 50% of the cars value in payments over 3 years, you're only paying 5,950 in taxes, return the car after 3 years and upgrade at the same terms, another $5950 in taxes.
You're going to have fees when you lease but in California the sales tax savings will offset those fees, IF you are upgrading at regular intervals.
Back in 2012 when I took delivery of my P85, there were no leases but it's looking more attractive to me as the itch to upgrade every few years is greater than ever.
That shiney P90DL @ 140K with 8.5% tax (Los Angeles) is an additional $11,900 in sales tax. If you trade in 3 years later to upgrade to say the latest hypothetical P110DL @140K again, you still pay another $11,900 in sales tax. There's no trade-in sales tax credit in California.
If you lease, you're only paying sales tax on your monthly payment. If you pay 50% of the cars value in payments over 3 years, you're only paying 5,950 in taxes, return the car after 3 years and upgrade at the same terms, another $5950 in taxes.
You're going to have fees when you lease but in California the sales tax savings will offset those fees, IF you are upgrading at regular intervals.
Back in 2012 when I took delivery of my P85, there were no leases but it's looking more attractive to me as the itch to upgrade every few years is greater than ever.
I don't agree with your opinion, because there will always be something better or improvement thereof that would replace the aging hardware. For an example: the sensors have improved range or the rate of sensing increased, which would allow greater accuracy or detection. In this case, that's what is happening with Autopilot v1 and v2, among other things. I'm pretty sure as time goes by, there will be v3 and so on because once Tesla have data on their hands from v2, they will see limitations and develop for v3. This is always how technologies develop.
heysteveh
Member
Maybe there would be no negotiating with TESLA, but you could certainly shop around for the financing of the vehicle, whether it be a purchase loan rate or a lease money factor. You don't HAVE to go through TESLA to get a loan or a lease for your car.
This is important, so it's capped and bolded:
DO NOT LEASE IF YOU PLAN TO BUY AT LEASE END!!! YOU WILL LOSE THE TAX CREDIT!
This assumes Tesla has any credits left when you get the car, of course. Tesla leases (and many other EV leases; Volt leases are definitely done this way) handle the tax credit by artificially increasing the residual value by the tax credit, reducing the amount financed, and thus, your monthly payment. The leasing company gets less money from you, but makes it up on the credit. However, if you buy at the end of the lease, you are stuck paying the inflated residual, thereby buying a used car for $7500 more than it's worth. You'd be better off to walk away and find an identical car out on the used market.
DO NOT LEASE IF YOU PLAN TO BUY AT LEASE END!!! YOU WILL LOSE THE TAX CREDIT!
This assumes Tesla has any credits left when you get the car, of course. Tesla leases (and many other EV leases; Volt leases are definitely done this way) handle the tax credit by artificially increasing the residual value by the tax credit, reducing the amount financed, and thus, your monthly payment. The leasing company gets less money from you, but makes it up on the credit. However, if you buy at the end of the lease, you are stuck paying the inflated residual, thereby buying a used car for $7500 more than it's worth. You'd be better off to walk away and find an identical car out on the used market.
SageBrush
REJECT Fascism
I don't understand why this is true.
I suppose I have to see the mechanics of how a lease monthly payment is calculated again.
My Dakine
Member
My Modal S is on order and I still have not decided to lease or buy it, it most leases there is a bid difference in the monthly payment, with the Tesla i configured the difference is about $140. I leaning more towards buying.
I didn't have to do anything special. The dealer said that leasing had a big advantage over buying and he was right in this regard. I received both Federal and CA checks about 2 months after leasing the Leaf. The buy option would give me a credit on my taxes but I would have had to wait 6 months to realize it.
The additional $7500 incentive to buy car came in the mail a month ago and I had a short window for acting on.
It's unfortunate Tesla increases the residual value like it does- makes a difference in lease payments but kills any idea of the lessee buying the car. Tesla really wants you to get the next new Tesla while the corporation keeps the credit and the old car. It must then use the credit to discount the old car enough to attract another buyer- brilliant!
Christopher Chan
Member
The fact is, Tesla appears to be using the Audi/Porsche model for leasing. Tesla's lease deals are terrible. Moreover, since Tesla doesn't discount like other brands, its leases just can't compete... Discounts from MSRP GREATLY reduces lease payments.
Let's just take a look. So it appears (from what I see on the personal sales forum here at TMC) people are selling 2013 85's with about 50k miles for about 50k. These cars were mostly in the low 90s, let's just say 92k. Now if you go configure a 92k Tesla for 15k miles per year, it ll be 1165/m + 6860 due at signing! So total lease payment over 3 years is 6860+1165*35 = 47635. But if instead you bought the car 3 years ago and now sold it for 50k, your total outlay (assuming only Fed credit) would be 92000-7500-50000 = 34500. So there's a 13k difference in overall outlay!
On the other hand, with say BMWs, the calculation almost always results in the inverse, meaning leasing is better than buying new and selling in 3 years. I don't know the residuals and MF that Tesla use, but they must be pretty bad, since current Model S leases already include the 7500 tax credit (at least that's my understanding).
However I think leases may be attractive on the model 3 in the first year or so when the tax credit is available since it will be equiv to a 7500 discount on the car. When that's gone, leasing a Tesla would be a pretty bad deal.
This is not a criticism on Tesla, it's just a business model. Porsche does like the same thing... A Porsche lease payment compared to a BMW lease payment, even when MSRPs are pretty much the same, frequently comes out like 30% higher.
Let's just take a look. So it appears (from what I see on the personal sales forum here at TMC) people are selling 2013 85's with about 50k miles for about 50k. These cars were mostly in the low 90s, let's just say 92k. Now if you go configure a 92k Tesla for 15k miles per year, it ll be 1165/m + 6860 due at signing! So total lease payment over 3 years is 6860+1165*35 = 47635. But if instead you bought the car 3 years ago and now sold it for 50k, your total outlay (assuming only Fed credit) would be 92000-7500-50000 = 34500. So there's a 13k difference in overall outlay!
On the other hand, with say BMWs, the calculation almost always results in the inverse, meaning leasing is better than buying new and selling in 3 years. I don't know the residuals and MF that Tesla use, but they must be pretty bad, since current Model S leases already include the 7500 tax credit (at least that's my understanding).
However I think leases may be attractive on the model 3 in the first year or so when the tax credit is available since it will be equiv to a 7500 discount on the car. When that's gone, leasing a Tesla would be a pretty bad deal.
This is not a criticism on Tesla, it's just a business model. Porsche does like the same thing... A Porsche lease payment compared to a BMW lease payment, even when MSRPs are pretty much the same, frequently comes out like 30% higher.
I believe I got the check from the government and not Nissan. This was 2.5 years ago but I think I would have remembered a check from Nissan. The dealer took care of the paperwork sent to government and I received two checks. Tesla does things different and I had no idea how good Nissan was in this regard until joining this forum.
Does anyone think that the technology in the Model3 will progress at such a high rate that purchasing the next gen Model 3 in a few years will be hard to pass up?
I mean things like huge increases in range (400+ miles on a charge), huge decreases in charging times (10 minutes or less to fully charge at a Supercharging station), way faster car for the same price, etc?
If so, I could see a reason to lease and upgrade rather than buy and hold. To be honest though, I don't see Tesla's technology improving *that* fast. Realistically, I can see incremental improvements in functionality as well as production becoming cheaper, more options included as standard, etc.
I mean things like huge increases in range (400+ miles on a charge), huge decreases in charging times (10 minutes or less to fully charge at a Supercharging station), way faster car for the same price, etc?
If so, I could see a reason to lease and upgrade rather than buy and hold. To be honest though, I don't see Tesla's technology improving *that* fast. Realistically, I can see incremental improvements in functionality as well as production becoming cheaper, more options included as standard, etc.
I think we will be in a better place to guess about that once we get details on the Model 3 and the specs of the options.
For example if the Model 3 doesn't come with APv2 when it ships in 2017 I suspect it will by 2020. That alone may be enough to make some people want to lease vs. buy.
+1 for this! I want to own a level 4 autonomous car whenever they come out. I'm hoping for APv2 on M3, with a future software upgrade to level 4. Depending on what is in the part 2 announcement, it could sway me towards a buy or lease. If it has everything I want, then I'll buy. But if it looks like 3 years from ship date will have better features, I would consider leasing.
ucmndd
Well-Known Member
I don't think we're in store for any huge technological advances on the battery front in the next several years (at least not in terms of becoming production-ready large-scale deployment). Increases in lithium battery technology are going to be incremental improvements in efficiency, not quantum leaps. The realities of capacity and charging are going to be with us for a while.
So long as they are forward thinking enough with the autonomy hardware and available computing capacity of the electronics, they should be able to keep pumping out functionality updates as the software becomes ready.
That said, there's always a reason to want a new car and I don't expect Tesla will be short on coming up with new ones.
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