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Model Y Buy or Lease?

Mpzona11

Member
Jul 6, 2021
69
125
Rochester, NY
Hello All-

New Tesla member here; I thought that my 2018 Honda Accord Sport 2.0T (6-speed manual) would be the last car I bought for a long time 3 years ago. Fast forward to 2021 and my brother-in-law let me drive his Model 3; it was all over from there. I’ve been obsessed with getting my hands on a Model Y ever since and placed my order to purchase a white MYLR with 20” induction wheels, white interior and a tow hitch last month. My order is due 8/9-8/29 right now but now I am considering switching from purchase to lease (if you are allowed to do that??) even though I’m not a big fan of leasing, personally. Here are some of my thoughts on this:

1. It really seems like a new federal tax credit could be coming in the near future. I would kick myself in the ass if I lost out on $7,500-$10k because I didn’t wait 5 months to take delivery (if it does indeed pass in time for 2022). I already lost $1,500 from NYS as they recently updated their Drive Clean Program from under $60k to under $42k only qualify for the full $2,000 rebate, dropping my rebate to a measly $500.
2. Leasing at 15k miles/year would save me roughly $7,500 of my out of pocket deposit to get to the same monthly payment to purchase the car.
3. I had planned to get a ceramic coating, interior coating, and all season mats. If I leased I would not purchase all of this saving another $2,500.
4. I’m really watching all the news about the giga factory Texas and would love to get a new MY with the 4680 battery and all the great updates that Musk has been saying will be so advanced for the next MY. Who knows when exactly this will be realized in volume production?
5. My biggest hesitation with leasing is that I am locking myself in for 3 years, even though I’d be saving a ton of money up front, I would have no equity or money when my lease is up to put down on a new Tesla. I would have to hope that if a federal EV credit did pass that it would still be available in 2024, but I would obviously get access to the most up to date MY vehicle at that point. I would have to shell out some cash then for down payment, etc. and who knows where prices will be in 2024, hopefully down?

My alternative is to move forward with the purchase and if the federal credit does come to fruition and/or the MY update does happen next year as they say, I could hope my cars resale value is high enough to get most of what I paid back (which will be about $62k after taxes).

I know there is no right or wrong answer here, but hoping for some dialogue and other thoughts from the community. Thanks in advance!
 

Mpzona11

Member
Jul 6, 2021
69
125
Rochester, NY
One thing I forgot to mention is that I am set on moving now with either a purchase or lease as opposed to delaying my order as long as possible. Biggest reason being is that my Accord will return nearly $25k with how high car prices are right now. I’d like to get the most out of my current car now as opposed to waiting to see what happens to vehicle prices in early 2022 and put more miles and wear/tear on it.
 

Cjacktesmy

Member
May 14, 2021
23
33
Newton
We ended up leasing, mostly because this is our first foray into EVs. Our lease ended up being cheaper than an id4. I think if we had it to do over again, we would’ve bought the car instead of leasing. We have only had the car for about 45 days, so yet to see what our electric bill is going to increase. Understanding how the resale for Teslas are going (even considering the current increase in used car prices), I think we would’ve been able to get a fair chunk of invested money back. That being said, if you lease, you are ‘only’ locked in for 3 years, and you’ll be able to take advantage of a new MY every 36 months. Think of all the improvements that you’ll be able to enjoy in 3 years. Either way, you’re going to love your car, with that, I have no doubts. Treat it as your own, whether you lease or buy, and enjoy the H-E-double hockey stick out of it!
 

Mpzona11

Member
Jul 6, 2021
69
125
Rochester, NY
I'm sorry, I am not really understanding your thought. A lease and a loan are different.

If you get a loan, you own at the end, not with a lease.
Right, I wouldn’t own the car if I lease it, but I would be putting down a down payment of close to $14k if I buy to get to a monthly payment I’m comfortable with. Then add the protection services on top of that. If I lease I would only have to put down about $6k to get to that same monthly payment and also no protection services. But at the end of the lease I’d have nothing to your point. I guess the biggest question is how well will the car hold its value and would I get a big enough return on investment if/when I do decide to sell over the next 3 years…
 

ffeingol

Member
Apr 18, 2021
23
11
Earth
I'm not going to get into the lease vs buy, as there are plenty of threads, YouTube videos etc. that can go over the pro's/con's of that. What I would suggest if you are thinking about leasing is check out more than just Tesla's lease. There is no option to purchase the vehicle at lease end with the Tesla lease. More than likely you would not want to do that, but it's not an option. I'd suggest checking some local credit union's (assuming you are in the US). If you have a local one that will do a Tesla lease you may find that their rates are better.
 

TravelFree

Member
Mar 23, 2020
788
705
Jacksonville, Florida
Only a couple reasons to lease over own.
1. You have a business and lease it in the business.
2. You don't plan on keeping the car more than the lease term and desire to have the latest every couple years. With a Tesla that has meaning as the cars keep getting better.

Buy it if you want to save money. Buy it if you plan to keep it. Buy it if you want to also buy FSD. Keep in mind the cost if leasing also will include higher insurance rates. And a lease does not get you the tax credits if they ever happen.

I've said before, tax credit is not a reason to buy a Tesla. Right now it doesn't look like it's going to happen. The only EV to buy if you want to road trip is a Tesla. All others have issues with fast charging away from home. If you don't road trip with an EV than any of the others can be a good buy.

Never buy a Tesla without a referral code link. You throw away good money by failing to start your purchase with the referral link.
 

ffeingol

Member
Apr 18, 2021
23
11
Earth
And a lease does not get you the tax credits if they ever happen.
I would not say that is a blanket true statement. The lease company gets the credit, and they can do with it as they please. A couple of vehicles ago I leased a PEHV Ford C-Max. They were not doing well (the C-Max's) so Ford gave customer the 7.5K credit. I'm not saying that would ever happen with a Tesla, but the possibility does exist with a 3rd party lease.
 
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TravelFree

Member
Mar 23, 2020
788
705
Jacksonville, Florida
I would not say that is a blanket true statement. The lease company gets the credit, and they can do with it as they please. A couple of vehicles ago I leased a PEHV Ford C-Max. They were not doing well (the C-Max's) so Ford gave customer the 7.5K credit. I'm not saying that would ever happen with a Tesla, but the possibility does exist with a 3rd party lease.
How is selling (that is what they did) a tax credit legal? What you got was a discount on your lease deal based on the tax credit the leasing company got. But I suppose you or your salesman can make up any excuse for the discount you want to believe. Tax credits are government laws, not something the seller can monkey with. :)
 

Celeritas

Member
Jun 25, 2017
89
42
Chicago
How is selling (that is what they did) a tax credit legal? What you got was a discount on your lease deal based on the tax credit the leasing company got. But I suppose you or your salesman can make up any excuse for the discount you want to believe. Tax credits are government laws, not something the seller can monkey with. :)
The dealer likely made the same amount part of the capital cost reduction in order to sell it quicker, just like any other seller wanting to move inventory. It has nothing do with being legal/illegal.
 
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ffeingol

Member
Apr 18, 2021
23
11
Earth
How is selling (that is what they did) a tax credit legal? What you got was a discount on your lease deal based on the tax credit the leasing company got. But I suppose you or your salesman can make up any excuse for the discount you want to believe. Tax credits are government laws, not something the seller can monkey with. :)
They did not sell the tax credit. Ford Capital (their leasing company) owns the vehicle and therefore is able to get the credit. What they do with that credit is up to them. In the case of the C-Max, those chose to offer that credit as a rebate back to the customer because the vehicles were not moving. The dealer was extremely surprised by this, and they said it was the biggest rebate they had ever seen.

My point really was that if you got with a Tesla lease from Tesla, the terms of the lease are pretty fixed and non-negotiable. If you can go with a 3rd party lease then things may become a bit more flexible.
 

tomagucci

Member
Jul 21, 2020
140
133
San Francisco
IF a tax credit ever comes to pass (lets say in 5 years) and Tesla see's a huge bump in demand due to it, they'll just increase pricing. You already see this now as they have been increasing pricing over the last three months (you can bet it's because more people are ordering, not less)
 

TravelFree

Member
Mar 23, 2020
788
705
Jacksonville, Florida
My point really was that if you got with a Tesla lease from Tesla, the terms of the lease are pretty fixed and non-negotiable. If you can go with a 3rd party lease then things may become a bit more flexible.
And that I agree with!
I do not agree that a lease company even 3rd party can transfer his tax credits to a leasee. It is wrong to tell a person who may be wanting to lease that there are ways he can get a tax credit too. Best to just state that leases are negotiable and what one person gets is not going to be what everyone gets.

I once leased a van in my business and when the lease was up the terms in the contract for returning the Van became negotiable because I made an offer that was 60% of the contract terms. It took them 2 days to decide to accept my offer. As for Tesla- if you really wanted to keep a leased car, make an offer. Tesla can always say no. But they might accept a buy out too. Why would you want to do that? Maybe you have added stuff to the leased car that you wish to keep. Like PPF, Ceramic, Window heat shield, any number of reasons, to make an offer.
 

phantom701

Member
Apr 16, 2016
17
15
San Francisco Bay Area
I love leasing cars and have done so successfully with my last few vehicles.

However, I won't do it with Tesla. I just placed my very first order for a Tesla and the lease terms are quite bad. Here are a few things that you must adhere to when leasing a car:
1. Absolutely no money down. So when you see the deposit option, move that all the way to zero. This is because you will never get the deposit back.
2. Residual value. The residual value offered by Tesla for leasing is not good. Which means huge profit for them.
3. Money factor is very high.

So financially, it doesn't make much sense to lease a Tesla. You are better off using other financial vehicle. And this is coming from someone who had leased multiple vehicles.
 

Watts_Up

Active Member
Mar 4, 2019
3,648
2,461
In a galaxy far, far away
Right, I wouldn’t own the car if I lease it, but I would be putting down a down payment of close to $14k if I buy to get to a monthly payment I’m comfortable with. Then add the protection services on top of that. If I lease I would only have to put down about $6k to get to that same monthly payment and also no protection services. But at the end of the lease I’d have nothing to your point. I guess the biggest question is how well will the car hold its value and would I get a big enough return on investment if/when I do decide to sell over the next 3 years…
Thank you for your comments and point of view, however I am not following your need for the protection service? Is it an additional warranty coverage?

I have a Model 3 for about three years, which basically didn't cost me anything as I mostly use free L2 chargers or occasionally charge at home for $.12/kWh.​
If I was solely charging at home it would cost me $1,350 or $37.50 a month, based on 75 kWh for 300 miles and a 15,000 miles/year.​

With your current car, based on a 15,000 miles/year, a $4/ gallon, and a 30 miles/gallon, you would spend about $6k or $167/month just in gas plus additional oil change...​
So another point you have to evaluate is the cost of ownership, something to consider when calculating your car payments.
 

FatherTo1

Member
Mar 7, 2019
886
877
California
I am not against leasing, but have never leased simply due to the mileage limits being too restrictive for me. I know the math can, and sometimes does, favor leasing, especially now with some folks able to work from home and driving a lot less than usual. However, some employers are requiring staff to return to the office in the coming months so that makes the mileage piece unpredictable again.

We are still awaiting delivery of our Y and will stick to a loan instead of a lease. I definitely supported a lease if someone was buying a Model S back in 2015 or so because I could see prices falling as they offered more standard equipment. Now though I don't see Teslas getting much cheaper, and prices have been steadily climbing for all their models and demand is sky high.

The other factor is the low interest rates. Historically, I do a 36-month loan but we are approved for 1.79% (or 1.24% with direct deposit) for up to 72 months. At those terms, the difference between lease vs loan is only $50-100. With a 72-month loan, I could take the money saved from the lower payment (compared to 36-month term) and confidently invest that and easily offset the extra interest on the longer loan term. On top of that, if my proclivities change then I can sell the Model Y at any time, whereas a lease locks me in for 36 months and is a little trickier to get out of.

TL;DR version: With potential for more driving as the pandemic recovers and low interest rates, I'm more comfortable with the flexibility of loan over lease.
 

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