Model X Refresh Lease vs. Purchase

[mikey_bs]

I placed my order for a LR Model X refresh and I was reviewing the difference between buying vs leasing. I was shocked to see that the leasing factors dont appear to be enticing whatsoever. Typically when you lease vs buy its anywhere from $100-$200 difference per month. In this case I have uploaded images of apples to apples comparison of buying vs leasing with $10k deposit on each option.


Model X Refresh LR
Black
Black
22's
Total price out the door - $104,486.95


Lease payment - $1,371.47 (10k miles annually) / $1,397.77 (12k miles annually)
Loan Payment - $1,414.40


For what its worth I am a business owner. I have leased many vehicles but this time around I will be purchasing as this is a no brainier. Also, by purchasing I can use section 179. For those who are not business owners it would make absolutely no sense to lease when you can purchase. I ran the finance numbers, at the end of 3 years of financing at 72 months 2.49% the remaining balance would be about 48k. Historically speaking a 3yr old model X would be worth 60k+.

I want to shed some light for other individuals who are purchasing the new Model X and can look at their options between financing and leasing.

Is June here yet?!?!?!

 

[elguapo]

Leasing a Tesla has never been compelling from an economic perspective unless, as you say, you’re a business owner. Unlike normal manufacturers, they’re not interested in leasing.

 

[jboy210]

We are going to lease again. Don't want to own have the company since there is no way to justify the exemption.

 

[elguapo]

We are going to lease again. Don't want to own have the company since there is no way to justify the exemption.

So you have a tax reason to lease, right?

 

[Darmie]

If phone leasing was an option, I would do it. Every couple of years, your phone is outdated. I think a Tesla is similar with the technology. Your example is very compelling to make a purchase.

 

[elguapo]

If phone leasing was an option, I would do it. Every couple of years, your phone is outdated. I think a Tesla is similar with the technology. Your example is very compelling to make a purchase.

@Darmie Totally agree on tech, I’d love to lease, but just from a numbers perspective, I don’t know how it’s possible to justify leasing without any tax benefits from a business.

 

[jboy210]

So you have a tax reason to lease, right?

Sort of. Lease is an operational expense, and not a capital asset. But honestly, the biggest reason we lease is that we like driving new vehicles, especially with Tesla changing things (improving?). And no issues with being out of warranty is also nice.

 

[elguapo]

Sort of. Lease is an operational expense, and not a capital asset. But honestly, the biggest reason we lease is that we like driving new vehicles, especially with Tesla changing things (improving?). And no issues with being out of warranty is also nice.

I hear you. Honestly, I’d pay the lease “premium” to hedge the Tesla tech specifically, but I have three kids and I’d end up paying so much in “damage” penalties, it’s just not worth it. Tesla is the only car I’ve ever considered leasing because, as was stated, like a phone, it’s totally outdated in 2 years.

 

[Tloan150]

Sort of. Lease is an operational expense, and not a capital asset. But honestly, the biggest reason we lease is that we like driving new vehicles, especially with Tesla changing things (improving?). And no issues with being out of warranty is also nice.

I prefer to lease as well, mostly for convenience and less risk.

But what the OP is saying is that even if you buy this car and sell it in three years, you will have more money in your pocket. As long as everything goes as planned.

 

[jboy210]

I prefer to lease as well, mostly for convenience and less risk.

But what the OP is saying is that even if you buy this car and sell it in three years, you will have more money in your pocket. As long as everything goes as planned.

True you can end up with more money, if as you say everything goes as planned. One accident though, and no matter how well the car is fixed, and the economics change dramatically.

 

[blinkme323]

True you can end up with more money, if as you say everything goes as planned. One accident though, and no matter how well the car is fixed, and the economics change dramatically.

Right, the statements can be couched either way though. If I get in no accidents and only drive 5k miles per year, then I would be way ahead of any lease. It all comes down to personal preference, but Tesla sure as hell doesn't make it easy when it comes to leasing... I don't think anyone would argue that.

 

[Bigriver]

Total price out the door - $104,486.95
Lease payment - $1,371.47 (10k miles annually) / $1,397.77 (12k miles annually)
Loan Payment - $1,414.40

I ran the finance numbers, at the end of 3 years of financing at 72 months 2.49% the remaining balance would be about 48k. Historically speaking a 3yr old model X would be worth 60k+.

For a 72 month 2.49% loan and a monthly payment of $1414, the borrowed amount is $94,500. So you are assuming $10k plus tax being paid up front? What are the corresponding upfront costs for the lease?

I am just a little past that 3 year point that you theorized. I paid about $25k out of pocket up front (that included all taxes and fees), $1380/month, and I don’t think I’ve ever been very much to the positive side if I were to trade in the car. Over the past 3 years Tesla has decreased the price of the new model X’s a lot, which has always made the comparison of what I owe vs the price of a new car somewhat painful to look at.

I want to buy rather than lease because I don’t want the mileage restriction and I take good care of my cars and typically keep them a long time. But I totally respect those who lease to keep updated on technology, and the financial advantage of owning is not clear to me, at least for the past 3 years.

 

[jboy210]

For a 72 month 2.49% loan and a monthly payment of $1414, the borrowed amount is $94,500. So you are assuming $10k plus tax being paid up front? What are the corresponding upfront costs for the lease?

I am just a little past that 3 year point that you theorized. I paid about $25k out of pocket up front (that included all taxes and fees), $1380/month, and I don’t think I’ve ever been very much to the positive side if I were to trade in the car. Over the past 3 years Tesla has decreased the price of the new model X’s a lot, which has always made the comparison of what I owe vs the price of a new car somewhat painful to look at.

I want to buy rather than lease because I don’t want the mileage restriction and I take good care of my cars and typically keep them a long time. But I totally respect those who lease to keep updated on technology, and the financial advantage of owning is not clear to me, at least for the past 3 years.

The upfront lease costs vary depending upon the programs they are running. Off the top of my head, we paid $4K and got free Supercharging. I believe now it is closer to $7K and no free Supercharging. We are paying $1000/mo on X75 5-seater 36-month lease. This is with a 10,000 miles/year. I don't know what the overage rate is. We will turn in the car with around 22,000 miles over 3 years.

 

[HuntsHeating]

Forget leases and loans. Pay cash.

 

[Uncle Paul]

With the fantastic Section 179 business deductions and accelerated depreciation, a lease is never going to make financial sense.

Many manufacturers offer subsidized leases to move their iron. Tesla has no need to do this as they are production contrained with amazing demand for their products.

 

[mikey_bs]

With the fantastic Section 179 business deductions and accelerated depreciation, a lease is never going to make financial sense.

Many manufacturers offer subsidized leases to move their iron. Tesla has no need to do this as they are production contrained with amazing demand for their products.

Very well said.

 

[SabrToothSqrl]

With 1k/month depreciation, and the hassle of selling private, I see why people lease...

 

[mikey_bs]

With 1k/month depreciation, and the hassle of selling private, I see why people lease...

I dont agree with the depreciation or with the hassle of selling. Teslas in general are some of the most sought after vehicles.

 

[SabrToothSqrl]

I dont agree with the depreciation or with the hassle of selling. Teslas in general are some of the most sought after vehicles.

Well, I've sold 2 privately now, and know what I paid and what they sold for, and how much hassle I incurred.... so... that's nice?

 

[Uncle Paul]

Used private party Tesla prices are holding very strong.