Model 3 leasing

[EVNow]

An yes, batteries will get better. So what? If an 200 mile (or 85 mile) EV is good enough for you now, chances are it will be in the future. So what if batteries double in capacity in x years? If you don't need it now, you probably won't need it in the future.

Too simplistic.

Cars (or any product for that matter) have constraints. Some of them get lifted over time. Typical example is Bluetooth. Cars from the last decade didn't somehow become less useful - but were simply not good enough because of new possibilities involving rapid innovation in an entirely new area - phones.

I've been driving 1 80 mile EV for 5 years - but I've been waiting for a 200 mile EV so that I can drive further than I can now.

Similarly, 3 would have better AP in future years. That would be greatly helpful.

 

[Tiberius]

We're not in total disagreement, but the statement that 'leasing is generally a bad idea ' is not a bad idea at all in any case when compared to a new finance. I'd argue that financing pre-owned at half the value in 3 years and riding it out for 10 years makes way more sense, if one is optimizing for average yearly cost of ownership. Even moreso, one can buy a 90s honda or toyota for $500 now and have no payments for 10 years whatsover. The point is, if it's strictly about the economics, financing new sucks more than leasing. But people buy new for all sorts or reasons. Many of them not necessarily frugal, but sometimes exclusive. Namely, the model 3. In this case, I'm sure we all hope this car magically falls somewhere in between the two.

This conversation is making me wonder if there's a big difference in how leases work between our two countries.

 

[tga]

Cars (or any product for that matter) have constraints. Some of them get lifted over time. Typical example is Bluetooth. Cars from the last decade didn't somehow become less useful - but were simply not good enough because of new possibilities involving rapid innovation in an entirely new area - phones.

You just made my point. Advances like Bluetooth are completely orthogonal to the type of drivetrain.

 

[Chopr147]

I am looking into the MS and am torn between lease or buy. A 60d just may be like todays 80 mile range of the future.

 

[dgpcolorado]

I am looking into the MS and am torn between lease or buy. A 60d just may be like todays 80 mile range of the future.

Even if you buy, as opposed to lease, you can trade-in the car if you want to get the latest and greatest. Leases have some constraints, such as mileage limitations (although you can just pay for miles over) as well as some added fees that purchasing does not have. Interest rates on leases also tend to be a bit higher than those available on purchases.

Overall, though, buying versus leasing often comes out pretty close to a wash. If you do not qualify for much of the tax credit then leasing may beat purchase plus trade-in (or selling the car yourself). If you plan to keep the car more than a typical lease term (usually three years) or put a lot of miles on it then purchasing may well be more practical than leasing.

 

[EVNow]

You just made my point. Advances like Bluetooth are completely orthogonal to the type of drivetrain.

Yes - but range isn't.

I'd buy an EV when it has AP and 3 hours of freeway range in winter +30% buffer. Until then, they will be on lease (unless it is too expensive compared to buy option).

But I should say - unlike some broad statements in some of the above posts - lease vs buy doesn't have a universally true answer. It depends on a lot of factors - including psychological ones.

 

[Chopr147]

Even if you buy, as opposed to lease, you can trade-in the car if you want to get the latest and greatest. Leases have some constraints, such as mileage limitations (although you can just pay for miles over) as well as some added fees that purchasing does not have. Interest rates on leases also tend to be a bit higher than those available on purchases.

Overall, though, buying versus leasing often comes out pretty close to a wash. If you do not qualify for much of the tax credit then leasing may beat purchase plus trade-in (or selling the car yourself). If you plan to keep the car more than a typical lease term (usually three years) or put a lot of miles on it then purchasing may well be more practical than leasing.

Thanks for info. I am going to buy, probably in the next few days I will order it. Between the Fed $7500 and NY $2000 I'm getting nearly $10,000 in credits. Which I plan on putting right onto the loan after the tax returns

 

[Tiberius]

Thanks for info. I am going to buy, probably in the next few days I will order it. Between the Fed $7500 and NY $2000 I'm getting nearly $10,000 in credits. Which I plan on putting right onto the loan after the tax returns

Wait, you haven't reserved one yet? If I'm reading that right, I'd bet the farm you won't get the $7,500. Would be nice but DO NOT plan on it.

 

[Chopr147]

Look up. We're talking about a Model S.

 

[Rookie]

Any thoughts on buy back policy on Teslas? And would it available on Model 3?

 

[182RG]

Any thoughts on buy back policy on Teslas? And would it available on Model 3?

The guarantee is dead.

Tesla Kills Resale Guarantee Program!

 

[cronosx]

It's dead.. but it seems it's not needed at all since 99% of the time you'll get a better deal selling it directly, so maybe you shouldn't worry too much

 

[Rookie]

The guarantee is dead.

Tesla Kills Resale Guarantee Program!

Ohh man!! damm . Though I can understand from Tesla's POV that they gotta maintain the balance sheets. But this was a good policy for reassuring first time customers for a brand new model.

It's dead.. but it seems it's not needed at all since 99% of the time you'll get a better deal selling it directly, so maybe you shouldn't worry too much

But would that hold true for Model 3. Because Model S is a premium sedan and the customers would be willing to buy used cars at good price. But for model 3 the customer base would be a bit more of middle class. I hope the trend continues.

 

[cronosx]

I don't see why not.. i would say that for the model 3 it will be even better, after if you have the money then you'll likely wont the "best" the market has to offer, so later tech etc.. while for a model 3 it's probably using less money possible.. so why not an used model if it help you spending less?

the market will see.. and of course what the competitor will do as well.. but i'm not overly worried

 

[Jskillz860]

Actually, what happens -- based on my Model X lease -- is the leasing company, US Bank in my case, gets the $7,500 tax credit as the owner of the vehicle. Then, they add the $7,500 credit to the residual value of the X, which otherwise is 52%, 51% or 50% of the price for 10K, 12K or 15K miles per year. So, effectively it reduces the lease payments by $208.33 per month.

Just don't lease if you plan to buyout at the end, or you'll end-up paying an extra $7,500. Finally, the current lease "money factor" is 0.0017 x 2,400 = approx 4.08% interest. Unless you lease for a monthly business write-off, it probably makes more sense to finance the purchase at 1.99% today from Alliant or another credit union. Of course, who knows what the money factor and interest rates will be at the end of 2017 in Tesla Time!

How does it increase the residual value of the car if you opt to buy when the lease is over, you're still getting the tax credit but only it's coming out of your lease payments as the lease company is getting the 7,500 dollars plus your lease payments. So how can they add the 7,500 to the value of the car at the end. It doesn't make any sense at all

 

[Jskillz860]

So here is the issue I'm having here, what is being said is them at of you lease car and opt to buy at the end the residual value will increase by 7,500 (if that is the tax credit you get), how can the residual value increase it doesn't make any sense to me. The lease company is getting the tax credit as a part of your lease payments and subtracting it from them. Think if there wasn't a tax credit. You would pay more on the lease. And finance the rest at the end. So how can they increase the value at the end 7,500 dollars of they have already recieved the 7,500 tax credit, they would be double charging you the 7,500 dollars. The residual should not increase at the end of the lease. Please explain of I am not looking at this correctly

 

[dgpcolorado]

How does it increase the residual value of the car if you opt to buy when the lease is over, you're still getting the tax credit but only it's coming out of your lease payments as the lease company is getting the 7,500 dollars plus your lease payments. So how can they add the 7,500 to the value of the car at the end. It doesn't make any sense at all

No, it doesn't make any sense. But until they change how they do things, it is what it is: leasing to buy is not currently a cost effective strategy.

 

[Jskillz860]

No, it doesn't make any sense. But until they change how they do things, it is what it is: leasing to buy is not currently a cost effective strategy.

So the lease company charges a 7,500 dollar fee at buyout for the tax credit that they already recieved?

 

[dgpcolorado]

So the lease company charges a 7,500 dollar fee at buyout for the tax credit that they already recieved?

That's the way it is currently structured according to the Tesla finance representative I spoke with. Perhaps it will change by the time the Model 3 comes out. I hope so.

 

[Jskillz860]

That's the way it is currently structured according to the Tesla finance representative I spoke with. Perhaps it will change by the time the Model 3 comes out. I hope so.

Yeah that is like robbery, I'm guessing people sign without realizing? That's crazy