Model 3 at Lease End

[Willy’sEV]

As we all know, there is no residual value/ lease buyout at the end of our lease.
Normally I turn my leased vehicles in after 3 years and lease another car.
New Tesla car prices are crazy. I priced my car today vs a little over a year ago when I leased it, cost is $11,000 more. That is a staggering number.
I love driving my Tesla, but it might be my first and last.
What are others thinking at lease end?

 

[EVRider-FL]

If you normally lease a new car every 3 years, what’s the issue? I don’t know if the buyout restriction is still in effect for new leases, but if you’re not buying the car does it matter?

 

[Arthur31]

Our SR+ lease is up in exactly 1 year. I already reserved a M3P to replace it. Order is on hold and will be released for production at the appropriate time. Main advantage was locking in the price.

 

[Willy’sEV]

If you normally lease a new car every 3 years, what’s the issue? I don’t know if the buyout restriction is still in effect for new leases, but if you’re not buying the car does it matter?

You are right and in normal times, I turn the car in, lease a new car. These are not normal times.
I would actually consider buying the car, did not give this thought when signing the lease. Who knew used car prices with Covid issues would make the prices take off. In most leases the residual is less than MSRP due to depreciation. Even if Tesla would let me buy the car, it would be a crazy high price.

 

[Willy’sEV]

Our SR+ lease is up in exactly 1 year. I already reserved a M3P to replace it. Order is on hold and will be released for production at the appropriate time. Main advantage was locking in the price.

That is a great idea. I have to wonder how long Tesla will let you delay and play this game

 

[vertico]

Isn’t your lease old enough to be before the buyout change? Buy it out, sell, take the cash, lease the new one.

 

[Arthur31]

They called me from customer retention to set this up so who knows. I was pleasantly surprised to get a call from them. Also I can release the hold if I am ready and I can turn in the current lease early without penalty.

 

[derekmw]

Isn’t your lease old enough to be before the buyout change? Buy it out, sell, take the cash, lease the new one.

My lease ends this month and verbiage is very clear in the lease contract that there is no buyout allowed. It’s a bummer too since I bought my Performance new for $51k and could basically sell it for the same price today.

I ended up buying instead of leasing our new LR model we picked up last week.

 

[jjrandorin]

Isn’t your lease old enough to be before the buyout change? Buy it out, sell, take the cash, lease the new one.

Model 3 leases were never able to be "bought out". Tesla never offered that provision at all on any model 3 lease, from when they started offering model 3 leases.

OP, this is the game you play when you lease. Most of the time, you win, because the car is not worth its residual value, or you can just buy another one and turn this one in.

Note that I am not down on leasing, I leased 2 bmw's at a time, through 3 year lease cycles, for 18 years straight prior to buying my model 3. This is just the flip side of leasing. You must make a decision on what to do ("must" because lease contract is ending), on the timing of the lease contract, not your own timing.

You will either need to pay high prices to buy a new model 3, re lease another model 3 and super high prices, buy a competing vehicle (at marked up prices), lease a competing vehicle (at marked up prices), or go without a car.

You have no other choices that I see. Everyone leasing these bet that "there will be something better in 3 years" or did not want to take the risk of what residual values might or might not be, and has unfortunately lost that bet this time.

 

[Willy’sEV]

Thanks JJ, sums it up well
I have a little less than 2 years left on current lease so who knows where things will be then

 

[jjrandorin]

Thanks JJ, sums it up well
I have a little less than 2 years left on current lease so who knows where things will be then

2 years feels like an eternity at this point, lol. By then, there may be more availability from all these car manufacturers that have EVs "coming soon" or "in limited quantities". I personally dont think dealerships (who are making money hand over fist right now) will ever return to the "high inventory" availability times, or said another way, I dont think the car market is going to get markedly better for quite some time (possibly years), but you will have more choice in 2 years time than anyone right now.

 

[phaheem]

Model 3 leases were never able to be "bought out". Tesla never offered that provision at all on any model 3 lease, from when they started offering model 3 leases.

That's not true. I leased an SR+ directly from Tesla in 2019 and was able to sell it December 2020 for the then-payoff amount, with the difference in the payoff and sale price being paid directly to me.

It's only a recent development that Tesla is not allowing their leases to be bought out during the least term or at lease end for the residual value. (This was also confirmed by the associate at Tesla who assisted me with ordering my M3LR.)

 

[jjrandorin]

That's not true. I leased an SR+ directly from Tesla in 2019 and was able to sell it December 2020 for the then-payoff amount, with the difference in the payoff and sale price being paid directly to me.

It's only a recent development that Tesla is not allowing their leases to be bought out during the least term or at lease end for the residual value. (This was also confirmed by the associate at Tesla who assisted me with ordering my M3LR.)

That isnt buying a lease out. You sold your lease to a third party, you didnt buy it out (those are not the same thing). "buy out" in this context means the person who is on the lease buying it. Tesla has never allowed that on a model 3 or Y. What they DID allow previously was those people selling the car to a third party dealership.

Once that third party dealership owned the car, they were free to do with it whatever they wanted to, including selling it back to the person who was originally leasing it, however the car did not pass from "tesla to the person leasing it" which is what a buyout is.

 

[texas_star_TM3]

unless you are doing it as a business expense or really want a NEW car every 36 months ... leasing is usually never a good idea.

 

[DayTrippin]

I don't know what the money factor is on the leases people have but for me it was an easy decision to go with buying vs leasing on our 3 earlier this year. I think it was a 1.24% APR and the car had gone up something like 4k+ since I originally ordered it. Even if the market returns to normal so to speak, I am now maybe 7k better than I was when I ordered. That should easily cover the first year's depreciation in a normal market. With the minimal downpayment I made, I should always be in a positive equity position as well.

It seems like a lot of other car companies are following Tesla's approach to leasing. I don't see any benefit to leasing other than doing it as a business expense now.

 

[SlimJim]

I am likely to go lease or purchase a non-Tesla when my lease ends next year.
Tesla price is getting too high for me.
There are many other brands who still qualify for $7500 federal tax credit.
And I find the longer range and superchargers are not really beneficial to me. For trips longer than 150 miles, my wife and I constantly opt to drive ICE.
Hyundai or VW looks to be my next EV.

 

[Willy’sEV]

I am likely to go lease or purchase a non-Tesla when my lease ends next year.
Tesla price is getting too high for me.
There are many other brands who still qualify for $7500 federal tax credit.
And I find the longer range and superchargers are not really beneficial to me. For trips longer than 150 miles, my wife and I constantly opt to drive ICE.
Hyundai or VW looks to be my next EV.

SlimJim, please keep us posted. I feel like I am in the same boat, we have an ICE car also. Remember, that when you lease you do not get the $7500 federal tax credit because you are not the owner of the car, you would have to purchase to get that.

 

[jjrandorin]

SlimJim, please keep us posted. I feel like I am in the same boat, we have an ICE car also. Remember, that when you lease you do not get the $7500 federal tax credit because you are not the owner of the car, you would have to purchase to get that.

In "normal car times" there are normally incentives passing some (or all) of that credit onto the person leasing. Of course, the price of the car is pumped up to absorb that credit anyway (meaning, they price the car higher so that it works out the same when you get the tax credit), so I dont pay too much attention to the tax credit.

These arent normal times though, and no telling when we get back to them (as it relates to car sales, I am not addressing anything else, although that statement qualifies for any number of current discussions).

 

[focher]

SlimJim, please keep us posted. I feel like I am in the same boat, we have an ICE car also. Remember, that when you lease you do not get the $7500 federal tax credit because you are not the owner of the car, you would have to purchase to get that.

For sure, the tax credit doesn’t apply to Tesla anymore. However, when leasing a vehicle that is eligible for the tax credit it is entirely possible that the lease incorporates the tax credit. If it is, the amount is often just deducted from the leased amount and the residual value (often allocated). Some manufacturers, though, keep the entire amount for themselves. BMW has been infamous for it where they “add” the tax credit value to the residual value.

 

[Willy’sEV]

I know there is no buy-out in the lease.
So I turn my car in at end of lease, but can I buy my actual car from Tesla?
What I mean can I ask them for a price to buy “my” car or this not an option?