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Model 3 Leasing

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I’ve seen a few articles mentioning an internal Tesla company memo that leasing may be coming in the near future, possibly as soon as a few weeks from now but with no specific date commitment. I was wondering if anyone is on the fence about buying an M3 and may be waiting for the lease numbers to come out before making a decision.

We bought an M3 LR RWD in December, and now that we’ve had it a few months, my Lexus is really feeling old and tired. I generally don’t like car leasing because we keep cars for a long time but I don’t think I want to own two of the current generation M3s with the technology changing so quickly, so I thought leasing a second one might be a good idea.

I’m going to take a wild guess on the numbers based on the Model S lease figures and say that it will be something around $6,000 down payment and $600 per month. Without the $3,750 tax credit that Tesla will benefit from I’m thinking the monthly payment would have been $700 per month but hopefully they will pass on the tax savings in the form of a reduced monthly payment.

I don’t drive more than 10,000 miles per year so that won’t concern me. Is there anything else I should be aware of?
 
Just that money down on leasing is simply to pay for lease so is actually part of the monthly cost. If the above fictitious lease was 6k down and 600 a month for 3 years 30k miles, then the part of the 6k that was cap cost reduction (down payment) just pre pays part of the lease to artificially make the payment look lower than it is.

Assuming that the 6k covers the 1200 destination fee, first month payment, taxes etc, in california that would be around 2500 or so. So, take away 2500 in lease start costs from the 6k and you have 3500 "down". 3500 divided by the lease term of 36 months, is 97.22 a month. That means the lease is not actually 600 a month, its 600 a month plus the 97.22 that you are putting down, so 700 a month.

In both leasing and purchasing, people tend to ignore their down payment when they start calculating their monthly payment. One can make their monthly payment whatever they want with putting money down. On a loan, it reduces the amount of interest you pay, and gets you to "car ownership" faster. on a lease, it just pre pays part of the lease (and opens up one to the possibility of not getting large lease down payments back if the car is totaled in the beginning of the lease).

You would also want to know what the money factor (interest rate equivalent) they are using, to compare that with what you would get financing it.

One last thing to remember is, at the end of the lease term, you HAVE to make "a decision" on what to do. In my case, that ment that, in January of this year I "HAD" to get 2 new cars, since I had 2 expiring lease terms. If your finances change (for example) you still "have" to do something, and are at the mercy of whatever is going on NOW (higher interest rates, for example).

I am a huge fan of leasing if the numbers make sense. I leased 2 BMWs for my wife and I for the past decade or so, turning in every 3 years and getting a new car. Fun to have a new car every 3 years. Of course, I could have owned the first set of BMWs if I had wanted to, with the money I paid for those three lease cycles (but I didnt want to own).

If someone is used to owning cars and driving them till the wheels fall off, leasing doesnt work. If someone is ok with having a car payment, and knowing in general they are paying more for the privilege of swapping cars at the end of the lease term, then it works.

Since you are not someone who has been leasing cars, make sure you fully educate yourself on how it works.
 
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jjrandorin, thanks for the elaborate reply. You've made some excellent points.

For me it's not an affordability issue. I can buy the car with cash or lease and neither will affect my finances. I have two major concerns with the M3:

1) In three years the technology may advance so significantly that the resale value on the current models will drop significantly.
2) After four years when the warranty expires it could be very costly if something breaks on the car and requires a major repair. And with Tesla being the only place you can go for service there is no competition to keep prices reasonable.

I am familiar with the financial mechanics of how lease payments are derived. With traditional dealers there is a lot of negotiating to be done because they will try to mark up the money factor above their cost to create additional profit from the spread. But with Tesla the price is the price, take it or leave it. So of course I won't be making any decisions until the actual lease numbers are posted. And if the numbers don't look good I may just buy one.

Another thing I just noticed this morning, the MR RWD model just increased in price by $1,000 to $43,900. I've been watching the Tesla website fairly regularly so it must have just happened in the last 48 hours. The constant price changes are really becoming irritating. The MR model has only been out for a few months now. It came out at a starting price of $45,000. Then after one week it increased to $46,000. Then the tax credit expired and it was reduced in early January to $44,000. Then a second round of price cuts in late January brought it down to $42,900. Now it's February and the price is $43,900. Is Tesla pricing things like Amazon, where if you don't like the price wait an hour and check again?
 
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I'm showing the MR RWD still being $42,900.
 

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That is so strange. It was $43,900 when I typed this post at 7:42am PT. Screenshot attached. But I do see that if I pull up the website using Chrome instead of Safari it shows $42,900. Safari on my IPad still shows $43,900.
 

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In the case of a lot of higher-cost car manufacturers, leasing is a way to hide the substantial discounts necessary to sell the cars. Unfortunately, we are seeing this bleed over into budget-priced cars sold to less sophisticated people.

But buyer beware, when the lease ends that car better be in perfect condition, otherwise you are going to get thoroughly screwed over, and the ratio of people getting screwed over at the end of the lease is built into the profit-loss equation for the lease.
 
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I’ve seen a few articles mentioning an internal Tesla company memo that leasing may be coming in the near future, possibly as soon as a few weeks from now but with no specific date commitment. I was wondering if anyone is on the fence about buying an M3 and may be waiting for the lease numbers to come out before making a decision.

We bought an M3 LR RWD in December, and now that we’ve had it a few months, my Lexus is really feeling old and tired. I generally don’t like car leasing because we keep cars for a long time but I don’t think I want to own two of the current generation M3s with the technology changing so quickly, so I thought leasing a second one might be a good idea.

I’m going to take a wild guess on the numbers based on the Model S lease figures and say that it will be something around $6,000 down payment and $600 per month. Without the $3,750 tax credit that Tesla will benefit from I’m thinking the monthly payment would have been $700 per month but hopefully they will pass on the tax savings in the form of a reduced monthly payment.

I don’t drive more than 10,000 miles per year so that won’t concern me. Is there anything else I should be aware of?
The technology comes to us via updates...wouldn’t see that as a primary driver.
 
Good catch. I have no idea how that got selected. Now the base price shows correctly at $42,900.

Regarding end of lease issues, does anyone have experience with how Tesla has handled cars in less than perfect condition coming back at the end of a lease?
I’ve only leased one car, not a Tesla, but they’ll forgive small stuff if you buy or lease another of their vehicles. But be sure about your miles, etc. it can be expensive to sell your lease, too,, and not all OEMs allow it.
 
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OP, Re the price changes, I know BMW used to change prices at least a couple of times a year publicly (raising the MSRP), and basically every month privately (by changing either money factors, incentives, residuals interest rates etc).

So, this is not a tesla thing. Every manufacturer that has monthly incentive expiration does this, which is basically all of them. Its just more public with tesla because there isnt anything to negotiate on (mostly) or changing incentives to keep track of. Just pricing (somewhat opaque pricing, with "gas savings" built in which is really dumb but still).
 
I’m very actively waiting for M3 leasing.

With the technology across the industry changing as fast as it is, I have zero interest in owning a vehicle right now. The leasing model works for me - we own my wife’s vehicle, and she will be fine driving it for 10 years. For me; I’m the tech guy. I want the iterations as they happen - so a 3 year lease is ideal.

The hypothetical numbers above will work for me; thankfully NJ is a state that exempts sales tax on EVs, so that alone means I’m not quite as worried about the money factor. I can get a new lease on my same Cadillac for less than 1% APR. I’m sure a Tesla lease will be around 5%. The sales tax difference will more than make up the difference.
 
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Tesla are notorious for having high leases, you are gonna pay 23k for 36 months when you can buy one for 45k and take the tax credit. I am sure when it comes time to sell, you will still be ahead slightly in 3 years

Thing is, I really don’t want to own it. Not particularly interested. If the lease is a little expensive, so be it. I’d rather lease and walk away than buy it and hope I can recoup in 3 years.

This is just a bridge for me until either the Model Y comes out, or I see what Cadillac has up their electrified sleeve. Maybe I’ll change my tune then, but for now ... would rather lease.
 
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We bought an M3 LR RWD in December, and now that we’ve had it a few months, my Lexus is really feeling old and tired.
I generally don’t like car leasing because we keep cars for a long time
but I don’t think I want to own two of the current generation M3s with the technology changing so quickly,
so I thought leasing a second one might be a good idea.

I don’t drive more than 10,000 miles per year so that won’t concern me. Is there anything else I should be aware of?

Thing is, I really don’t want to own it. Not particularly interested.
If the lease is a little expensive, so be it.
I’d rather lease and walk away than buy it and hope I can recoup in 3 years.

This is just a bridge for me until either the Model Y comes out, or I see what Cadillac has up their electrified sleeve.
Maybe I’ll change my tune then, but for now ... would rather lease.

I'm a little bit in the same situation, I like (love) the Model 3 as a secondary car,
but I would like to get in the future a more practical primary car, with a hatch like the Model S.

Since it's only for a very short time, and only for local commute and I don't need to use a supercharger,
instead leasing and getting another new Model 3, I think that I would then consider looking at some used (Pre-Own) EV,
mostly a Leaf, an e-Golf, or a Bolt, there are plenty for sale in perfect condition with low mileage.

The point is that it ii impossible right now to know when the Model Y would be available,
so getting a three year lease might be too long or too short.

Also the total cost of getting a used EV would be certainly about half of the cost of leasing a new Model 3.
This is not as nice as getting a brand new EV, but It's just that I am not too much into leasing or loan payments.
I prefer buy cash so I don't have to worry about mileage, or any minor scratches affecting the end of lease value.

I understand the concern about obsolescence and the potential avantage of leasing with predetermined resale value,
but owning a car give you much more flexibility, you get all the tax credit, and there are less additional fees and issuance cost.
 
I am still eligible for the $2,500 CA rebate and $1,000 utility rebate on a lease, so it’s only the $3,750 tax credit I’m giving up on a lease. Theoretically I should still be benefiting from it if Tesla passes it on in the form of a lower monthly payment. Whether they do that we’ll just have to wait and see.

I won’t lease a Tesla if the payments don’t represent a fair deal. But I don’t see any great deals on used Teslas (S or 3) right now either. The few Model 3’s listed for sale seem to be at unrealistic prices - effectively more than buying a new one after factoring in the credits.

Chevrolet is doing everything they can to move their Bolts. A Bolt with an MSRP of $38K is going for $31K, and still eligible for the full $7,500 federal credit. So after Fed, CA and utility credit I could buy a new Bolt for $20K. It seems ridiculously cheap for an EV with 238 miles of range. But...it’s not a Tesla.
 
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Chevrolet is doing everything they can to move their Bolts. A Bolt with an MSRP of $38K is going for $31K, and still eligible for the full $7,500 federal credit. So after Fed, CA and utility credit I could buy a new Bolt for $20K. It seems ridiculously cheap for an EV with 238 miles of range. But...it’s not a Tesla.
Seem a good deal in fact, while waiting for the Model Y...
Do you know when the full $7,500 credit will expire?
I cannot find an exact date.
 
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I’m very actively waiting for M3 leasing.

With the technology across the industry changing as fast as it is, I have zero interest in owning a vehicle right now. The leasing model works for me - we own my wife’s vehicle, and she will be fine driving it for 10 years. For me; I’m the tech guy. I want the iterations as they happen - so a 3 year lease is ideal.

The hypothetical numbers above will work for me; thankfully NJ is a state that exempts sales tax on EVs, so that alone means I’m not quite as worried about the money factor. I can get a new lease on my same Cadillac for less than 1% APR. I’m sure a Tesla lease will be around 5%. The sales tax difference will more than make up the difference.
You can lease an M3 right now from TesLease: https://ev-cpo.com/hunter/
 
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