Right, I meant a non-endorsed financing company is what I want to avoid. Whether it’s captive or affiliated is inconsequential to me, really.
My thought process being that, with an “established” firm, I won’t run into any servicability issues.
I bring this up because many moons ago, I worked for a company that provided a Ford as a company vehicle. They leased it through a third party that had no relationship with Ford, and it was a bit of a nightmare whenever it needed service. (It was a Ford, after all. Service was common.)
As the third party company was listed as the vehicle’s owner, they had to authorize even warranty work. Finding someone to contact there was a mess. Hours on hold, faxing papers around, etc.
It just didn’t make for a seamless experience, and one I don’t wish to repeat.
Whether its a captive finance arm actually SHOULD matter to you, not for service, but for actual pricing. If its not a captive finance arm, the residual values will be set to be close to what they actually expect them to be, rather than "subsidized" to move cars. An example of this can be found in BMW (which I am very familiar with, as I used to be one of the main people providing lease deal help on what used to be one of the biggest BMW blog / sites). Up to this year, BMW 3 series ( the one most people are familiar with) had residuals set by BMW anywhere from 60% to 64%. The ACTUAL value of the car is worth much closer to 51-53% on lease turn in.
Two questions are normally asked:
1. What does this mean?
It means that, the higher the residual value on a stated deal by the company leasing it, the less of the car you are actually paying for when you lease (rent) it. If the RV is set to 50%, then it means you are paying for 50% of the car during your lease. If the residual is set to 65%, then you are paying for 35% of the car during your lease period. Obviously, paying for less of the car during the lease term means lower payments, so residual absolutely matters to someone leasing.
2. Why would BMW set the residual so high on a lease relative to its actual value?
Because of a few things.
One, they own the finance company. Because they own the finance company, they can set the rates however they want without paying a separate company.
Two, they control the MSRP and the price they sell to dealers, AND control how many cars dealers have to buy from them. They can force dealers to buy the cars (so they sell all of them).
Third, having the RV be so high means they can move expensive cars "down market" to people who might not be able to afford them.
Fourth, Having the RV significantly higher than actual value when the car comes back, means that its almost impossible for the person leasing the car to actually buy it. Buying YOUR lease car if you like it would cost several thousand more than buying the exact same car off some dealers lot (for most 3 series, its like 7-10k upside down). Since you cant really buy your own leased car when it comes time to turn it in, you have to turn it in, putting you back in the market for buying a car... for BMW, hopefully another BMW (moving more cars). This also has the side effect of providing the used car dealership with lots of nice used cars they can sell (because they have to keep most of the cars brought in, the dealer cant just give them back to the bank.. per BMW rules).
Leasing works this way for almost every car dealership, but not tesla because they dont have a dealer network and they dont have a captive finance arm. Model S and X leases were pretty bad, even though they were subsidized by tesla. They HAD to, to get people to consider them. No one wants to buy something new long term like a car ( especially in that price range), from a new car company. Tesla HAD to lease those cars to get people to try them.
Much less incentive now that people now know the company. They will lease them when they need to move cars (when demand softens enough that they have issues moving the cars they make). Now, when is that, I dont know. Could be now.
But, even when they lease them, they have no incentive to heavily subsidize them so the leases wont be good, or at least what someone who is familiar with leasing would consider good. Since they dont have the captive finance arm, they cant make money on the financing (like for example BMW can).
They dont want the cars back for a dealer network, because it costs them money to have to try to sell them, and they have issues with that (selling and storing cars). They would likely just auction most of them off.. so right now its all cost on the car on the way back.
Most people want leasing because they want a lower payment, and its my opinion that when they finally turn on leasing for model 3, whenever that is, the leases are going to work out to be very similar in pricing as if you were buying it, monthly payment wise, and one will lose the same amount of money leasing it for 3 years and turning it in, as they would with buying it and selling it in 3 years.
Leasing still pays the depreciation, its just built into the program (by setting the residual).
TL ; DR version. My opinion is, it will come when they need to move additional cars, but whenever it does come, anyone who is familiar with leasing will find that it makes little sense to lease a model 3 as the math wont shake out. Due to the way tesla operates, they wont be able to offer truly compelling leasing on model 3 and wont want to because they have no reason to.
