Leasing Thoughts

[jjrandorin]

I decided to put a bit more money down on top of my trade-in (and because of the California rebate).

If you have a trade in with equity in it, and are putting money down, its not actually "403 a month" . That may be your payment but thats not what you are paying. If you had 2k in equity and put down another 1.6k (making up numbers) that would be 3.6k in cap cost reduction. Divide that by lease term of 36 months and thats 100 a month, so it would be 403+ your 100 for 503.

I suspect that if your payment is 403 with 15k lease term for 3 years, you had substantial worth in your trade in, and / or added additional money.

I am a pretty big fan of leasing when it makes sense... leased BMWs for my wife and I (2 separate ones) for 12 years. So, I am not anti leasing, but its generally not a good idea to put a trade in on a lease unless you are trying to get out of a car with negative equity.. which you likely are not doing with a 403 a month payment.

Anyway, its a bit misleading to put a lease payment out there that has a huge cap cost reduction in it, because one can make their lease payment whatever they want with a large enough cap cost reduction, and trading in a car can provide that.

 

[jonquiljo]

I decided to put a bit more money down on top of my trade-in (and because of the California rebate).

I think Federal and California rebates go to Tesla. What they do with it is not clear to me. But you definitely do not get the money.

 

[silentrider21]

I think Federal and California rebates go to Tesla. What they do with it is not clear to me. But you definitely do not get the money.

From what I understand, the Federal goes to Tesla. However, I should receive the California rebate if I am reading it correctly.

 

[silentrider21]

If you have a trade in with equity in it, and are putting money down, its not actually "403 a month" . That may be your payment but thats not what you are paying. If you had 2k in equity and put down another 1.6k (making up numbers) that would be 3.6k in cap cost reduction. Divide that by lease term of 36 months and thats 100 a month, so it would be 403+ your 100 for 503.

I suspect that if your payment is 403 with 15k lease term for 3 years, you had substantial worth in your trade in, and / or added additional money.

I am a pretty big fan of leasing when it makes sense... leased BMWs for my wife and I (2 separate ones) for 12 years. So, I am not anti leasing, but its generally not a good idea to put a trade in on a lease unless you are trying to get out of a car with negative equity.. which you likely are not doing with a 403 a month payment.

Anyway, its a bit misleading to put a lease payment out there that has a huge cap cost reduction in it, because one can make their lease payment whatever they want with a large enough cap cost reduction, and trading in a car can provide that.

Completely understand what you mean in terms of it being misleading with the 403/month payment. I'm in a lucky situation where my trade-in is completely paid off and I did not put a cent into the car (my family got a new car and passed this one down to me). That's why I am a bit dismissive of counting it as equity on my end, especially since it has been rapidly deteriorating and constantly brought in for maintenance.

 

[jjrandorin]

From what I understand, the Federal goes to Tesla. However, I should receive the California rebate if I am reading it correctly.

I believe you can get the california rebate if you lease. When looking at the requirements it says "purchase or lease requirements". Of note, the rebate amounts and terms and stuff are changing december 3rd of this year according to their website. If the application is not dated that date or earlier it will be subject to the new requirements.

What should I know about the December 3rd program changes?

 

[dandrewk]

I've leased two EVs, and received two CA rebates. Sadly for me, two is the limit.

 

[Watts_Up]

I've leased two EVs, and received two CA rebates. Sadly for me, two is the limit.

The limit of 2 previously and 1 after December 3rd, is it for the whole tax payer life or for each calender year?

 

[dandrewk]

The limit of 2 previously and 1 after December 3rd, is it for the whole tax payer life or for each calender year?

From the website: "Except for rental, public and car share fleets, no single entity is eligible to receive more than two CVRP rebates either via direct purchase and/or lease as of January 1, 2015. All rebates issued prior to this date do not count toward the two rebate limit. "

After Dec. 3 it changes to one rebate.

 

[Watts_Up]

Just want to get a general sense of what people think about leasing the car. If you are currently leasing a model 3,
I would love to hear how you like it so far. I just graduated college and not sure if I am ready to commit to a car for 72 months
(especially with the way battery tech is advancing and how different the EV market could look in just 3 years).

Currently, I have an order in for lease (15,000 miles/year) with a monthly payment of $403 after I trade-in my car. SR+, Black Paint, Black Interior

Unless your have a business and can amortize the cost of the car into your taxes like any equipements, the lease doesn't provide any tax advantage.
The lease can be attractive because you can get a car for a lesser monthly payment than getting a credit, but you don't own the vehicule at the end.

You mentionned that the lease mitigate the obsolesence factor and the resale value risk, but in the case of Tesla those are really major factors.
The car get constantly new updates, the computer can be updated, and the batteries don't seems to have so much degradation issues.

The limit of 15,000 miles a years correspond to 50 miles for 300 days, this can easeally reached if you drive almost every day.
The insurrance cost might be higher because you need some additional coverage in case your car get damaged.

Unless you are working in US only for few years, owning a car is a better deal than constantly renting a car.
The Model 3 is certainly the best car in the market, so you don't make a bad choice.
But you should more consider buying a condo than constanly getting a new car.

 

[Watts_Up]

From the website: "Except for rental, public and car share fleets, no single entity is eligible to receive more than two CVRP rebates either via direct purchase and/or lease as of January 1, 2015. All rebates issued prior to this date do not count toward the two rebate limit. "

After Dec. 3 it changes to one rebate.

By "single entity" you mean one individual or one household tax declaration?

So if a couple have a joint tax declaration, they will have only one rebate?
But if the following year they want to declare separatly their taxes, could one of the couple be eligible then for a rebate?

What about if they divorce, would each get 1/2 rebate declared, so each could get then another 1/2 rebate,
or one person is considered as having the rebate already received but not the other person?

 

[Lex2Caddy2Tes]

Yes state rebate is good for purchase/lease. Fed goes to Tesla (lease). In 2016 I leased a Fiat 500E, put 5500 down, got 6K in rebates, $41/month x 3 years - the golden years. That car served a purpose, now its time to move up the food chain to Tesla. FYI:

For those that are serviced by PGE (NorCal), don't forget about this:
Electric vehicle (EV) rebates

And if you live in the central valley (even better):
Drive Clean in the San Joaquin | Rebate