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Leasing a Y
- Thread starter GeorgeC1
- Start date
I’m in the process of deciding whether to lease or buy the MY LR I’ve ordered. I understand that leasing is rarely the better choice, but I’m thinking that may be different in the current EV market.
A lot will change in the EV market in the next three years. Competition is heating up as evidenced by the Mach-E and the old, staid ICE companies are committing to EV’s in a big way. While there is no doubt in my mind that Tesla is well ahead in most areas I do feel the new competition will have a negative impact on Tesla resale values going forward.
Even though Musk has stated that a range over 400 miles doesn’t make sense I think the range issue will be king for a while. Let’s not forget that other EV builders have over-delivered on their range whereas Tesla’s tend to fall short on expected range. I think the competition has and will spur changes to Tesla vehicles in the next three years.
My belief that there will be lower resale value and greater range for Tesla vehicles is pushing me toward a lease. Tesla is no longer the only game in town for a quality EV. (Charging is a different matter.)
I’d love to hear other thoughts about what the future might hold for Tesla and EV’s. Especially as to how it relates to leasing.
A lot will change in the EV market in the next three years. Competition is heating up as evidenced by the Mach-E and the old, staid ICE companies are committing to EV’s in a big way. While there is no doubt in my mind that Tesla is well ahead in most areas I do feel the new competition will have a negative impact on Tesla resale values going forward.
Even though Musk has stated that a range over 400 miles doesn’t make sense I think the range issue will be king for a while. Let’s not forget that other EV builders have over-delivered on their range whereas Tesla’s tend to fall short on expected range. I think the competition has and will spur changes to Tesla vehicles in the next three years.
My belief that there will be lower resale value and greater range for Tesla vehicles is pushing me toward a lease. Tesla is no longer the only game in town for a quality EV. (Charging is a different matter.)
I’d love to hear other thoughts about what the future might hold for Tesla and EV’s. Especially as to how it relates to leasing.
Watts_Up
Well-Known Member
It is true that Tesla is constantly improving drivetrain and batteries, and this is certain the strongest Tesla point.
However Tesla has such a great lead over it's competitors that I would not worry about the resale value of a few year old tesla.
Unless you have a business where you can deduct your lease from your taxes, having a lease add a 'middleman' making profits on you.
Also a lease has mileage constraints, and you will need to take some additional insurances, and there will be other fees when returning the car...
There are many threads on this subject, I remember someone recommending to lease without any down payment
and paying upfront the full cost of the lease for the first payment as the most effective way to get a lease.
Honestly, from reading many threads on this subject, the only argument that a lease offer is that you don't have to deal with selling your car,
but this is certainly not the most economical solution.
One strong argument for owning (buying or getting a loan) is that you have the freedom to sell when you feel it or keep as long as you want.
In particular, if I had a lease ending soon, I would be very upset getting a new Tesla knowing that I would miss for few months getting a new battery pack with 4860 cells.
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My position is to buy and resell at market value vs leasing. Technology, range (either MPG or EV range), and features are going to improve over time. If you need to have a car that has the latest and greatest, are you going to be purchasing a new Tesla at each refresh?
The only reason I would lease a Tesla is if the ONLY benefit you are looking for is HOV access (carpool in California). This benefit is only for 3 years and matches the length of a typical lease agreement.
The only reason I would lease a Tesla is if the ONLY benefit you are looking for is HOV access (carpool in California). This benefit is only for 3 years and matches the length of a typical lease agreement.
Today, for the basic Model Y LR, the Residual Value is 66% or $33,785 and the Money Factor is 0.001900 or 4.56% according to my SA. Obviously the interest rate sucks compared to a Tesla loan, but it's not that far off from the dealership rate. I'm not sure about the residual value. I believe it will depreciate more than that, but therein lies the deciding factor.
Back in 2017 the first Model 3 came out and the Chevy Bolt came out. No comparison really, but think about what has happened over the past 3-4 years. The Big 3 have committed to EV's and Ford has a huge backlog for the Mach-E and I'm sure it will be the same for the F-150 Lightning. Tesla is selling out and the Cybertruck has over a million deposits. The next three years will change the EV market dramatically. I feel the market will still be compared to Tesla, but there will be many more viable alternatives for the daily driver. Perhaps not for the long distance driver. And I am certain Tesla will have to up their game with regard to quality control if they want to remain the leader. Not to mention repair shops, etc.
As Watts_Up pointed out you could be at the end of your lease at a good time or a bad time. Heck, Tesla may decide to allow you to buy your lease, but with that residual value it may not be worth it. From a purely financail standpoint I don't think a lease is a good proposition for the "W2" crowd. However, from a "wait and see" perspective it has its strong points. I don't need the "refresh" model each time it comes out, but I'm thinking there will be some fundamental changes in the market place and vehicles in the next three years. Tesla may still be on top, but Ford, GM, and VW aren't going to be sitting back letting Tesla rule.
The truth is whichever company attracts the "common man" driver will be the winner. I think the Mach-E is proof of that. People like that when they sit down to drive it looks close enough to what they are used to. (See reviewers comments about the forward instrument cluster and the volulme knob.) The "early adopters" will not be the ones deciding who wins or loses. That I can guarantee you. Yes, the Model X and S are more "common man" in that design respect, but their price is not.
Thank you for the discussion.
Tom
Back in 2017 the first Model 3 came out and the Chevy Bolt came out. No comparison really, but think about what has happened over the past 3-4 years. The Big 3 have committed to EV's and Ford has a huge backlog for the Mach-E and I'm sure it will be the same for the F-150 Lightning. Tesla is selling out and the Cybertruck has over a million deposits. The next three years will change the EV market dramatically. I feel the market will still be compared to Tesla, but there will be many more viable alternatives for the daily driver. Perhaps not for the long distance driver. And I am certain Tesla will have to up their game with regard to quality control if they want to remain the leader. Not to mention repair shops, etc.
As Watts_Up pointed out you could be at the end of your lease at a good time or a bad time. Heck, Tesla may decide to allow you to buy your lease, but with that residual value it may not be worth it. From a purely financail standpoint I don't think a lease is a good proposition for the "W2" crowd. However, from a "wait and see" perspective it has its strong points. I don't need the "refresh" model each time it comes out, but I'm thinking there will be some fundamental changes in the market place and vehicles in the next three years. Tesla may still be on top, but Ford, GM, and VW aren't going to be sitting back letting Tesla rule.
The truth is whichever company attracts the "common man" driver will be the winner. I think the Mach-E is proof of that. People like that when they sit down to drive it looks close enough to what they are used to. (See reviewers comments about the forward instrument cluster and the volulme knob.) The "early adopters" will not be the ones deciding who wins or loses. That I can guarantee you. Yes, the Model X and S are more "common man" in that design respect, but their price is not.
Thank you for the discussion.
Tom
Yes, all good points - agree on the wait and see aspect and for first time EV owners as well.
It's really up to each buyer, I wouldn't put anything down. For your last point, you can always extend the lease.
backeis
Member
Does anyone know if I can ask for the money factor to be recalculated after initial order? I just saw that my credit score went up quite significantly a week after I ordered. Anyone have had any good or bad luck with trying to improve their MF?
