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Model 3 lease question.

Tpatrick00

New Member
Oct 17, 2020
2
0
California
Hi, I live in California and am looking to purchase or lease a new Model 3 Performance in December. After reading the forums and running some numbers myself it looks like financially, leasing is not the best option due to the history of fairly low depreciation. However I have seen several online references that say Tesla leasing does not report to the credit bureaus. If true this would benefit me by leaving my reported debt to income lower in turn allowing me to invest more in real estate. Can anyone with a recent Model 3 lease give me some insights into Tesla’s credit reporting or lack there of? Thanks!
 

Tam

Well-Known Member
Nov 25, 2012
9,224
7,917
Visalia, CA
...several online references that say Tesla leasing does not report to the credit bureaus...

That's news to me. It's an installment plan which can be paid timely or untimely and involves some credit risks so I don't how Tesla would not report your lease activities (balance, timeliness, untimeliness, paid off, defaults...) to credit bureaus.
 
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t518

Member
Oct 17, 2020
26
25
Los Angeles
Hi, I live in California and am looking to purchase or lease a new Model 3 Performance in December. After reading the forums and running some numbers myself it looks like financially, leasing is not the best option due to the history of fairly low depreciation. However I have seen several online references that say Tesla leasing does not report to the credit bureaus. If true this would benefit me by leaving my reported debt to income lower in turn allowing me to invest more in real estate. Can anyone with a recent Model 3 lease give me some insights into Tesla’s credit reporting or lack there of? Thanks!

No financing / leasing can be done without report to credit bureaus.
 

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Nov 28, 2018
10,421
11,773
Riverside Co. CA
Hi, I live in California and am looking to purchase or lease a new Model 3 Performance in December. After reading the forums and running some numbers myself it looks like financially, leasing is not the best option due to the history of fairly low depreciation. However I have seen several online references that say Tesla leasing does not report to the credit bureaus. If true this would benefit me by leaving my reported debt to income lower in turn allowing me to invest more in real estate. Can anyone with a recent Model 3 lease give me some insights into Tesla’s credit reporting or lack there of? Thanks!

"Tesla" doesnt have a leasing arm, so all tesla leases are through some other company like bank of america, or some other financial institution. That institution would likely report to the credit agencies.
 
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Tpatrick00

New Member
Oct 17, 2020
2
0
California
"Tesla" doesnt have a leasing arm, so all tesla leases are through some other company like bank of america, or some other financial institution. That institution would likely report to the credit agencies.

This makes sense to me, and btw I will be a bmw convert as well. But, and maybe I don’t understand exactly how Tesla leases work, my understanding is that Tesla does not allow a buyout at the end of the lease term. So if this is the case how can Tesla dictate this if the lease is owned by an outside financial institution? To me this makes a Tesla lease more of a rental or subscription in which Tesla retains ownership of the vehicle throughout the “lease” period?
 

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Nov 28, 2018
10,421
11,773
Riverside Co. CA
This makes sense to me, and btw I will be a bmw convert as well. But, and maybe I don’t understand exactly how Tesla leases work, my understanding is that Tesla does not allow a buyout at the end of the lease term. So if this is the case how can Tesla dictate this if the lease is owned by an outside financial institution? To me this makes a Tesla lease more of a rental or subscription in which Tesla retains ownership of the vehicle throughout the “lease” period?

Thats correct, tesla retains ownership of the vehicle during the lease period (tesla is the owner). The lease is through a different company facilitated by tesla (on teslas behalf basically). They dont have the equivalent of BMW Financial Services, though. Tesla leases are nothing like BMW leases, so dont go into it expecting similar money factors etc.
 

jeremymc7

Active Member
Feb 3, 2013
1,543
697
U.S.
California as well. Ran the numbers as well. Even with leasing being less and freeing up money each month it was still better to purchase and I get a sizable return on my investments. Some will agree. Others won’t. Best of luck.
 

jeremymc7

Active Member
Feb 3, 2013
1,543
697
U.S.
Yes no buy out option with 3 or Y. This is not that common with cars at all. If there was I might have leased instead of purchased.
 

NuTony

Member
Oct 1, 2020
37
18
new jersey
where does this "it's easy to sell a Tesla (anything)" after a few years come from? i say this as I see the offers people get for their used Tesla's as being waaaaay lower than any average ICE vehicle. am i missing something here?

I looked at it like i should lease the 3P BECAUSE of depreciation.

thanks...
 

jeremymc7

Active Member
Feb 3, 2013
1,543
697
U.S.
Discussed at length elsewhere in forums. Tesla's have very low depreciation. Based on my own analysis purchase and resale / trade on is less total financial loss. Proven in my case so far with prior Tesla's.
 

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Nov 28, 2018
10,421
11,773
Riverside Co. CA
where does this "it's easy to sell a Tesla (anything)" after a few years come from? i say this as I see the offers people get for their used Tesla's as being waaaaay lower than any average ICE vehicle. am i missing something here?

I looked at it like i should lease the 3P BECAUSE of depreciation.

thanks...

Model 3s specifically have very low depreciation. You might want to check that again. If you are looking at S and X, the model 3 is different. In fact, people are finding (and you will likely see this if you look) that price delta between a used 3 and a new one is very small, especially when one considers any possible incentives that might be available at a state level on them.

TL ; DR, this question is being answered discussing model 3s, and those have currently EXTREMELY low depreciation.
 

OCR1

Active Member
Jan 28, 2018
3,764
4,118
Southern California
Tesla does not lease cars in the traditional sense. They rent them for three years and them take them back. Just like GM did many years ago with the EV1. And the monthly rates are high so unless you have a very specific reason to rent one you are better off buying. Depreciation has been very low on the Model 3’s, as others have stated.
 

NuTony

Member
Oct 1, 2020
37
18
new jersey
Does anyone here actually have experience with selling a model 3 before? Or trading one into a dealer somewhere? Very curious. I see the kbb is high for say an 18 LR with 25k miles on it. I just don't see how or why someone would pay that much vs a new one only a couple grand more? I wouldn't. Would (or did) you?

All I've read is people taking a beating on used Teslas. I see them advertised how but never hear or see the "sale". Thanks
 

OCR1

Active Member
Jan 28, 2018
3,764
4,118
Southern California
Does anyone here actually have experience with selling a model 3 before? Or trading one into a dealer somewhere? Very curious. I see the kbb is high for say an 18 LR with 25k miles on it. I just don't see how or why someone would pay that much vs a new one only a couple grand more? I wouldn't. Would (or did) you?

All I've read is people taking a beating on used Teslas. I see them advertised how but never hear or see the "sale". Thanks

There have been many posts throughout this forum where someone identifies a used Model 3 for a certain price and asks for feedback on what everyone thinks. I have always been surprised at why people would consider a used Model 3 with 20K-40K miles on it that only sells for maybe $6K-$8K less than a brand new one but some people seem to think they are good deals.
 

jeremymc7

Active Member
Feb 3, 2013
1,543
697
U.S.
KBB is just a jumping off point. Coming from a family that used to own a leasing business before car companies did any leasing. Even now with more regional information it still is.

As for Tesla’s. I’ve sold one. Traded in one. Had one totaled. In each case I’ve done very, very well over any other car I’ve owned in the last 35 years or so.

The price of used Tesla’s, especially 3’s and likely Y’s when we get more data are absurdly high and the bottom
Has yet to really fall out.

  • Used buyers are happy to pay even $2k less.
  • They don’t know, can’t use, or don’t want to mess with rebates / credits
  • Prefer a car that has some miles and has been shaken out my owner / service.
  • Just can wait the 1-3 months that the factory often has on a custom order.

etc.
 
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NuTony

Member
Oct 1, 2020
37
18
new jersey
Thanks for the replies.. still up in the air.. i have time. But here a couple thoughts.

Could this anomoly just be supply and demand?

As in with the cars (Y and 3) now being pumped out and began to saturate the market? Once that supply catches up (pretend it's 2023 today and there's over a million out and a million a year made) these things are coming down man. No way it doesn't. Especially should they come up with cheaper and cheaper models and even these get a price drop or two.

I did the analysis on the high plus and even worst case given known data and the Lease is the safe option. 3yrs from today we "could" still be alright... but idk. Would definitely suck to shell out say 15k pay 600/mo for 3 yrs and then "walk away" dead even vs paying 600/mo with 5k (my state rebate) down and wipe my hands of it...

Definitely a gamble. Not factoring in inflation of unknown % given this tumultuous climate (hopefully settled for the next 4 yrs one way or other in a couple of weeks!).

Any thoughts
 

jeremymc7

Active Member
Feb 3, 2013
1,543
697
U.S.
There is going to be demand for used Model 3’s for quite some time. People that don’t have money for new ones will take a used one. Demand has been strong for two years and should be similar for years to come as well. I got a better return this year during pandemic with people out of work.
 

jjrandorin

Moderator, Model 3, Tesla Energy Forums
Nov 28, 2018
10,421
11,773
Riverside Co. CA
Does anyone here actually have experience with selling a model 3 before? Or trading one into a dealer somewhere? Very curious. I see the kbb is high for say an 18 LR with 25k miles on it. I just don't see how or why someone would pay that much vs a new one only a couple grand more? I wouldn't. Would (or did) you?

All I've read is people taking a beating on used Teslas. I see them advertised how but never hear or see the "sale". Thanks

you are not seeing people "taking a beating" on used model 3s, or if you are, I would like to see it.
 

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