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Model X 100D Lease vs Purchase w/ Loan

RVD98072

Member
Oct 9, 2017
214
92
Seattle, WA
I've read through the previous lease vs buy posts here but I have a few additional thoughts. My car is a $122k car marked down to $110k (due to referral credit + price adjustment).

In the past, I have always leased cars. Over the past 15 years I have leased many cars by BMW, Nissan, Toyota, and even Chrysler. My cars have ranged from around $40k MSRP to around $120k MSRP. I like getting in and out of a new car every 2-3 years. I also have kids so it's nice to give back a trashed minivan that kids messed up with sticky food, barf, juice spills, etc. after 3 years.

The lease deals have always been pretty good with interest rates <1% (usually <0.5%). With the Nissan Leaf, the federal tax credit was also pretty straightforward as it showed up as a cap cost reduction. It was really a no brainer for me to lease instead of buy.

Even my most expensive car lease (around a $120k BMW) had monthly payments of around $1100.

But these Tesla lease deals don't look so good:

1) Interest rate is 5.04%. On a $100k car, you're talking about paying another $300/mo over the rates that I'm used to paying so my monthly payment is around $1500.
2) The $7,500 federal tax credit is added to the residual so your monthly lease payments are lower but I don't know if that means you get access to all of it over time of your lease or just part of it (it's not straightforward to me). In addition, if you were to buy the car at the end of the lease, your residual is likely going to be higher than the used market because of this addition so you may as well buy a CPO or one in the used market for cheaper.
3) The $7,500 federal tax credit is going to be phased out likely by the end of 2018 so buying a new Tesla at lease end will not have the tax credit so you may as well buy now to take advantage of it.

Of course with leasing you get the advantage of not committing to buy so you can always walk away after 3 years so that's worth something. According to my calculations of lease vs buy, if I were to buy this car at the end of the 3 year lease, it would cost me around $17k more than if I had purchased the car with a loan at 1.49%.

Not as relevant to me:
1) I don't have a business so I will not be writing this off so there is no additional tax benefit for me.
2) I don't drive a ton of miles (usually around 10-12k/year) so a 15k miles/year lease is more than enough for me.

A few questions to ponder:

1) Is it worth $17k to have this option to walk away from the car?
2) This car has unlimited supercharger access but it seems like Tesla will be getting rid of this and instead will include 400 kWh per year limit as they are going to do for the 3. Of course Tesla might continue with unlimited charging for S and X cars and/or for current owners but I think the direction will be limiting so in that sense, buying now is better.
3) The X has so much new technology that I don't know if this stuff will all work well in the long term (FWD, panels coming loose, doors not closing properly, AP getting upgraded over time, battery degradation, etc.). With new technology like this, leasing seems much better. I don't really see this car being all that viable 10 years, 15 years from now.

So I'm not exactly sure what I will do. I was going to lease but am thinking of buying w/ a loan due to the numbers. Any thoughts?
 

PARNY

Member
Aug 28, 2017
38
52
Roslyn, NY
A lease is just a long term loan that is not fully paid off during the term of the lease. You are paying $17K more for the option to turn the car in - putting the residual risk on the lessor. Just purchase the car on a 6 year, 1.5% loan. Put down the same cash required to get into a lease. The loan will have a lower monthly payment and about the same payoff at 3 years as the lease. At the end of three years trade it the car or sell it privately. No repair costs, no lease termination fee, no overage on miles. You can "get out" any time you want. To lose, the trade in or private sale value would have to be significantly below the projected value.
 

RVD98072

Member
Oct 9, 2017
214
92
Seattle, WA
Yeah, I get all that. In most leases, if you were to buy and then sell after 3 years, you'd come out better if you just lease for 3 years. With the way Tesla has their lease programs, I think you're probably right in that you'd come out ahead buying and then selling after 3 years.

As for the monthly loan payments, they are actually higher over a 6 year 1.5% loan than my monthly lease payment.

See the uploaded image...higher down payment + higher monthly payment with the loan vs the lease. If I put the same down payment, the monthly loan payment would be even higher.
 

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RVD98072

Member
Oct 9, 2017
214
92
Seattle, WA
Due to these issues, I ended up successfully moving my lease to a loan. My biggest holdup was having to pay an additional $300/mo in interest. I'm ok paying interest if it's low but this was just too much. Just for reference, my previous Nissan Leaf lease payment a couple of years ago was around $300/mo.

My second holdup was on how they handle the federal tax credit. I'd prefer to just get the tax credit rather than have it built into my lease in an unclear way.
 

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