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Despite ordering through the works salary sacrifice scheme through Tusker, all my correspondence has been with Tesla. Got my R/N text on the 7th July, then delivery confirmation text 3rd August (Delivery being confirmed as the 7th September).
I'm looking at getting a 3 year business lease through OctopusEV.
It's £734 a month for a Model 3 Long Range, including insurance, tyres, servicing, accident management and roadside assistance. That works out around the same price each month as the Tesla Loan does when I include my annual insurance cost, but has the added benefit of including the tyres which, from experience, puncture quite regularly (I've had to replace 3 from punctures in the last 21 months). It also has the added benefit of have £0 downpayment which means I can keep all the money I've saved for when the Model 3 Gigaberlin 4680 battery comes out - I'll probably go for ownership on that one.
It's £734 a month for a Model 3 Long Range, including insurance, tyres, servicing, accident management and roadside assistance. That works out around the same price each month as the Tesla Loan does when I include my annual insurance cost, but has the added benefit of including the tyres which, from experience, puncture quite regularly (I've had to replace 3 from punctures in the last 21 months). It also has the added benefit of have £0 downpayment which means I can keep all the money I've saved for when the Model 3 Gigaberlin 4680 battery comes out - I'll probably go for ownership on that one.
HenryT
Active Member
Am I missing something here - surely the loan route has the benefit of ownership of an asset at the end of the term (minus the cost of the deposit, tyres etc) whereas the lease leaves you with nothing at the end?
Ownership of an asset that has in all likelihood depreciated over term by the net sum of the lease costs.
All that a lease is - when all is said and done - is paying depreciation monthly with no financial risk at end of term.
I've heard this "you own something" argument time and time again. For those that feel that need to own something, then great. But makes better financial sense in 9/10 cases to rent your depreciating assets and own your appreciating ones.
Amplified by inside a business due to the tax benefits as well as VAT treatment.
sparkymark75
Member
The problem with leasing a Tesla at the minute is the cost is way over what the cars are depreciating.
Whilst that is true for now, it may not be in 3 to 4 years time when the lease is up and there are a lot more model 3 about on the used market.
Exactly this, underwriters have mountains of data and forecasts. They're not silly, forecasting residuals is their day job.
Is your data better than multiple banks and finance houses then, as to the second hand auction price of a Model 3, in 3 years time?
I'd rather not take the risk which is why I lease. But some like to "own something", even if it depreciates and they have the risk at the end. Each to their own.
sparkymark75
Member
It was the thought that nobody actually knows depreciation on the Model 3 right now as the cars are only 2 years old and hardly any have been returned for onwards sale - there will be a lot over the next few years.
The Model 3 is a desirable car no doubt, but with so many on the market (unlike the Model S and X which has sold much fewer numbers than the 3), they won't be hard to get hold of, and Tesla haven't been increasing the prices of new ones and it's so easy to get a lease. Depreciation has never really been a big thing for me when getting cars but it is something I should take seriously when spending so much money over 5 years.
If I bought a Model 3 on a loan, then the car will already be obsolete by the time the loan ends in terms of its battery technology (which I'm quite keen on), and I would be envious of the 4680 Model 3s with their 400+ mile ranges... not because I think I'll drive 400 miles without stopping, but because of the way supercharger fees keep increasing at an alarming rate and I'd like to go on long trips while doing most of my charging at home or from a 3 pin overnight.
There's also the risk of trying to trade in my Model 3 to Tesla at the end of the five years to get a new Model 3 and being short changed on the trade in figure... there's a few people on this forum who have said Tesla weren't very generous with their offers compared to AutoTrader, and I really don't like the idea of trying to sell a car to a stranger.
The Model 3 is a desirable car no doubt, but with so many on the market (unlike the Model S and X which has sold much fewer numbers than the 3), they won't be hard to get hold of, and Tesla haven't been increasing the prices of new ones and it's so easy to get a lease. Depreciation has never really been a big thing for me when getting cars but it is something I should take seriously when spending so much money over 5 years.
If I bought a Model 3 on a loan, then the car will already be obsolete by the time the loan ends in terms of its battery technology (which I'm quite keen on), and I would be envious of the 4680 Model 3s with their 400+ mile ranges... not because I think I'll drive 400 miles without stopping, but because of the way supercharger fees keep increasing at an alarming rate and I'd like to go on long trips while doing most of my charging at home or from a 3 pin overnight.
There's also the risk of trying to trade in my Model 3 to Tesla at the end of the five years to get a new Model 3 and being short changed on the trade in figure... there's a few people on this forum who have said Tesla weren't very generous with their offers compared to AutoTrader, and I really don't like the idea of trying to sell a car to a stranger.
HenryT
Active Member
I think you are answering a question I didn't ask @btc1k
I'm perfectly comfortable for the relative merits of leasing, contract hire etc, as compared to purchase outright and on finance as I worked in motor finance in a past life. What I was 'missing' was this;
Matt125 said;
Matt suggests the lease cost per month (with zero deposit) is about the same as the loan cost with insurance added. Leave aside servicing as that's likely to be little more than a can of beans in 3 years, given a 4 year warranty. Just tyres to add.
My point is, if that is the case, then purchase on finance will result in a (depreciated) asset of some value, (less deposit, as I mentioned) versus zero value at the end of the lease.
Hence 'missing something'.
The unknown at the minute is battery technology in four years and the impact of a large number of models being dumped on the used market. Your asset of some value maybe less than you owe on it.
HenryT
Active Member
If you are going down that route, there are any number of unknowns. Improved battery technology, for instance, may lead to smaller, lighter/cheaper battery packs being used to maintain similar range/performance. What you are recognising is just another variant of the Osbourne Effect. It's a bit like that old line about when is a good time to buy a computer/camera/(etc) - either yesterday or tomorrow, just not today.
My comment about the missing information was simply in response to Matt125's reference to the financial (monthly?) cost being "...about the same".
I've put a rough Excel sheet together of the monthly cost between an OctopusEV Business Lease, and a Tesla Loan (ownership).
This will likely not be the same for you as the Business Lease takes your salary into account, and your insurance cost will almost certainly lower than mine
For tyres and servicing I looked at my previous yearly cost on the Model 3 SR+ I have right now and divided them by 12.
As you can see, the Total Monthly Cost is very similar for the Loan once you add in all the things that come included with the Octopus lease. Total cost over the 36 months is higher because of the downpayment.
I also put a total cost over 5 years for the Tesla Loan, that's a worst case scenario - I expect the astronomical insurance cost to go down as I get more no claims discount, become older etc.
| Octopus | Loan | |
| Monthly - Car | 734 | 615 |
| Insurance | 0 | 132 |
| Tyres | 0 | 12 |
| Servicing | 0 | 14 |
| Total Monthly Cost | 734 | 773 |
| Downpayment | 0 | 9000 |
| Total Cost - 36 months | 26424 | 36828 |
| Total Cost - 5 years | 64656 |
HenryT
Active Member
I've put a rough Excel sheet together of the monthly cost between an OctopusEV Business Lease, and a Tesla Loan (ownership).
This will likely not be the same for you as the Business Lease takes your salary into account, and your insurance cost will almost certainly lower than mine
For tyres and servicing I looked at my previous yearly cost on the Model 3 SR+ I have right now and divided them by 12.
As you can see, the Total Monthly Cost is very similar for the Loan once you add in all the things that come included with the Octopus lease. Total cost over the 36 months is higher because of the downpayment.
I also put a total cost over 5 years for the Tesla Loan, that's a worst case scenario - I expect the astronomical insurance cost to go down as I get more no claims discount, become older etc.
Octopus Loan Monthly - Car Insurance Tyres Servicing Total Monthly Cost Downpayment Total Cost - 36 months Total Cost - 5 years
As you have demonstrated, the monthly cost is one feature and everyone's circumstances differ.
What is your plan at the end of 3 years?
Questions then arise about car value v outstanding finance/deposit paid and what terms you might get to extend your lease if possible, or to start afresh.
All you can do is make the most appropriate decision for your circumstances and plans at the time you make it, as too many future influencers are out of your control. (Used Tesla market, tax treatment, interest rates, new car costs, personal financial conditions, legislative impact, etc, etc)
Good luck with your new car whichever way you get it.
HenryT
Active Member
I think that is exactly the way I would have approached it too, Matt.
In the event, I'm retired now so for me the decision was just a matter of 'diversifying' the kids inheritance for them!
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