Model Y leasing now available

[N1L CO2]

Given that leased M-Y can be traded to dealers, Is leasing still not a good option?

Not sure what you meant by dealers but you cannot trade leased Teslas other than to return it at end of term. Unless something changed recently, there is no option to buy-out your lease with Tesla.

Leasing is a good option if you are accustomed to getting a new car every 3 years and if you stay within or close to the allotted miles. Otherwise, you are losing money on both ends. That $4500 down payment does not include the taxes or fees at drive off. Your initial investment will be close to $6000 by the time you are handed the key card. And as you are making lease payments to a car you have no option to buy, you are basically building equity for Tesla. If you go over on the allotted miles, you are paying for that too at a much higher cost so make sure you buy the miles in the beginning.

I've leased at least a dozen cars thus far and I NEVER put any money down on a lease. That's money you won't see again unless you buy out the lease at the end. And since we lease luxury brands, the buyout doesn't make sense because the depreciation is so stupidly steep that you can buy one cheaper on the lot than to keep yours. Such is not the case with Teslas, especially for the 3 and the Y. There are people waiting anxiously to get into the EV market at a lower price point with used Teslas. That's why the resale is so high on used ones.

In any case, do your due diligence and crunch some numbers. If you have good credit, you can borrow money from Tesla for damn near free for 6 years. I got 1.9% for 72 months from Chase through Tesla. That alone ensures me that I will be ahead of the depreciation curve.

 

[MP3Mike]

Not sure what you meant by dealers but you cannot trade leased Teslas other than to return it at end of term. Unless something changed recently, there is no option to buy-out your lease with Tesla.

You can't buy out a leased Model 3 or Model Y, but a third-party dealer can buy-out your lease if you trade it in for another vehicle you are purchasing.

 

[GeorgeC1]

Having a lease bought out is a very expensive way to change cars.

 

[N1L CO2]

Having a lease bought out is a very expensive way to change cars.

Yep, totally agreed. You are almost guaranteed to be underwater/upside down in the trade. The financing people are no fools. They make sure they get their money.

 

[LADude23]

I like the lower monthly payments, and I can deduct the lion's share of the lease payments. My business is still in the initial/expansion stages so decreased monthly cash flow is a top consideration.

I don't have a crystal ball, and I'm suspicious of any 3 year resale assumptions that are based on current 2018 Model 3 resale numbers. The three years from 2021 - 2024 will see a huge expansion on fully electric car choices from existing legacy manufacturers as well as new startups. We could also see a huge jump in battery technology leading to greatly increased ranges and decreased charging times. Non-Tesla charging stations may also see an explosion. All of these things will put downward pressure on resale value in 2024. ICE tech was mature when I bought my last car, I can't say the same for EC tech.

So, FOR ME, leasing is an attractive option. I've always bought cars and driven them into the ground, but I was a W-2 employee then, and always said I would never lease until I could deduct a chunk of those lease payments. I also need to maintain a newer car, as I am now driving clients around to look at properties, and really can't use my 2011 Volvo C30 anymore.

There's more to a lease vs. buy decision than the numbers.

 

[EMdoc12]

Taking over someone’s lease on swapalease is another option. Very easy to get in with no down payment that way.

I lease for business reasons and have done this multiple times.

 

[madan005]

Honestly, with $0 down, its coming to 603/month for model y 7 seater on lease with $695 acquisition fee. whereas, loan is 703/month with $5700 down payment ( my state has 10% sales tax with no incentives on this). So, if a dealer buyout is possible, dealers buy our car for KBB cash value. As everyone else say/hope, if tesla holds resale value, we get equity when we sell our car as a dealer buyout. Why do you guys think its a costly operation to come out of the lease?. Recently, I returned my Lexus lease after 14 months and got ~$2650 cash back for which i have made ~5200 down payment + monthly lease payments. Am i missing something here?

 

[GeorgeC1]

You get the same deduction for a purchased car used for business purposes as a leased car. In fact if you go for the heavier model X as a purchase you can get a huge write off under tax section 179 bonus depreciation. The car becomes almost free if you have a business use case.

 

[N1L CO2]

Honestly, with $0 down, its coming to 603/month for model y 7 seater on lease with $695 acquisition fee. whereas, loan is 703/month with $5700 down payment ( my state has 10% sales tax with no incentives on this). So, if a dealer buyout is possible, dealers buy our car for KBB cash value. As everyone else say/hope, if tesla holds resale value, we get equity when we sell our car as a dealer buyout. Why do you guys think its a costly operation to come out of the lease?. Recently, I returned my Lexus lease after 14 months and got ~$2650 cash back for which i have made ~5200 down payment + monthly lease payments. Am i missing something here?

You were very fortunate with Lexus to have them let you terminate your lease early without huge penalties. Typically, you'd be responsible for all remaining monthly payments plus a disposition fee. And getting money back is unheard of, at least in my experience. Perhaps the lease contracts are different in NC from CA.

Dealers never buy out leases at face/book value. They use the wholesale value and start at the bottom (which is WAY less than what you'd owe on the lease). You typically have to haggle on getting more for your trade-in, even if it is a Tesla. Moreover, this is depending on whether or not you are buying/leasing one of their cars. They'd be happy take whatever gap, again rarely in your favor, and apply it towards the new loan and "hide" in the new payments. Here's the kicker though. Depending on your credit worthiness, they'll play with the interest rate on your new loan. Even it's a .25% higher than what you are paying now (which may seem insignificant), you'd be making fee and interest payments on the gap now.

Trust me, I have a few friends in the car business. They are in it to make the most money possible, period. When they say "that's below my cost", "we'd be losing money" or "you're stealing it", it's only to make you feel like you are getting what you want. The only way to "win" is by sticking to your number. And don't feel bad when you decline weatherproof floor mats, paint protection or wheel saver warranties in the finance office. That is their last attempt at trying to get some cash out of your pocket.

 

[240W]

You get the same deduction for a purchased car used for business purposes as a leased car. In fact if you go for the heavier model X as a purchase you can get a huge write off under tax section 179 bonus depreciation. The car becomes almost free if you have a business use case.

How is it almost free? Doesn’t it lower your business income only?

So I spend $100k on the X, business makes $100k, subtract the $100k due to the 179, business income is zero. So I save the $100k tax rate, not the $100k spent out of pocket.

let’s say tax rate is 25%, so I’m saving $100k x 25% = $25k?

 

[GeorgeC1]

The savings in tax each year can cover a large chunk of the cost to operate. It’s possible with 179 to avoid recapture on the depreciation by rolling into another asset. Your cost to operate is reduced by the value of the vehicle when you roll it into another asset.