More Model 3 changes and leasing now available

[voip-ninja]

Okay here's my math, its obviously estimates but I am pretty sure its close numbers.

Can any of you give me input I am torn between Leasing or Buying, I am coming from a lease, I like to usually change every 3-4 years however I do see Model 3 as being fun and me able to stay with it longer but I don't really see a huge advantage of the lease if it's really only about 1-2k less in total out of pocket cost over 3 years compared to a 72 month loan payment and paid costs at 36 months. Also the 3750 refund for buying makes buying actually cheaper... I think the question is if I buy and I decide to trade it..would I really be upside down? Based on amortization I shouldn't be...and if I break even...its the same as leasing..since leasing doesn't give you money towards another vehicle..

Lease Black M3 LR AWD 15k miles with AP
Due at signing $5376. $681/month
Total payments in 36 months $35222.65
I included 7.95% sales tax on $50,700 price of car on lease
and about $650 per year of Prop Taxes



Buy Black M3 LR AWD with AP
Down payment $5376. $714/month (Tesla financing, so a little less with CU financing)
Total payments by 36th month $36410.65
I included 7.95% sales tax on $50,700 price of car on lease
and about $650 per year of Prop Taxes

Plus $3750 refund for purchase, which would actually drop the total payments for buying lower than leasing I believe. Unless the sales tax is paid partially for lease I don't see how leasing is better even if I was to trade in the M3 with a 72 month loan at the 36 month mark.


Difference between both by 36 months is $1188. Does sales tax for the lease
get charged at the full 7.95% of the total cost of car or only for the
portion of the depreciation you pay on the car for 36 months? If you only
pay for a part of the car cost then it would be a much bigger savings compared
to buying.


Any input would be greatly appreciated

I don't see where in your costing you are calculating out what the purchased car will be worth at the 3 year mark when you would, per your own comments, likely flee to a newer car.

Let's say that at the end of the 3 year lease the car residual is 50% and that's approximately what you will get if you sell the car privately.

In the case of the lease you hand them your key cards and you walk away, you have in your pocket zero dollars.... it's also worth noting that any lease acquisition costs you paid are pure profit. This also assumes that there is not enough wear/tear on the car to affect the value of the car when you turn it in. BMW and others are quite generous about normal wear and tear, I have no idea how Tesla is.

In the case of the purchase you owe a little less on the car than it is worth, so you walk away from the transaction with something even if it's only a couple thousand bucks.

Now it changes if the resale of the car tanks at the three year mark, it changes if you have wear and tear, can't find a buyer, etc.

There is a lot of convenience in serial leasing and it makes great sense when dealing with a massive automaker who heavily subsidizes serial leasing since this keeps the cost premium of leasing to a minimum.

 

[Curt Renz]

We'll see. I'd believe the blog post over an unnamed spokesman. The blog post says all version of the M3 get AP at an increased cost.

From the Tesla blog:

As a result, Model 3 Standard will now be a software-limited version of the Standard Plus, and we are taking it off the online ordering menu, which just means that to get it, customers will need to call us or visit any one of the several hundred Tesla stores.

If a $35,000 version is what you want, I suggest contacting a Tesla salesman fairly quickly. He should be able to claify the situation for you. It would not surprise me if even this offer becomes withdrawn before too long. As we often hear on TV, "Call now as this special pricing will end soon."

 

[Rawlings2019]

I don't see where in your costing you are calculating out what the purchased car will be worth at the 3 year mark when you would, per your own comments, likely flee to a newer car.

Let's say that at the end of the 3 year lease the car residual is 50% and that's approximately what you will get if you sell the car privately.

In the case of the lease you hand them your key cards and you walk away, you have in your pocket zero dollars.... it's also worth noting that any lease acquisition costs you paid are pure profit. This also assumes that there is not enough wear/tear on the car to affect the value of the car when you turn it in. BMW and others are quite generous about normal wear and tear, I have no idea how Tesla is.

In the case of the purchase you owe a little less on the car than it is worth, so you walk away from the transaction with something even if it's only a couple thousand bucks.

Now it changes if the resale of the car tanks at the three year mark, it changes if you have wear and tear, can't find a buyer, etc.

There is a lot of convenience in serial leasing and it makes great sense when dealing with a massive automaker who heavily subsidizes serial leasing since this keeps the cost premium of leasing to a minimum.

Thanks, I think I am gearing more to buying because in the numbers I posted , yes I did not include the value of the car at the 3 year mark but even at 50% value at 3rd year. I think I would still come ahead by $1-3k also these numbers did not include the tax refund ( I mentioned it in it but did not deduct that from the 3 year cost) which I will actually deduct once I receive it..I would also be allowed to drive the car w.e amount of milage I want... (this can be good or bad for value if I plan to trade in) so I really don't see how this new lease program is really convenient if I am not actually going to "save at least 4-5k at the 36 month mark in total costs going with lease. I am saving on monthly going with lease but I come away with nothing...while buying I spend more per month but pay less in total 36 month cost after tax deduction and possibly make some money on it when selling or even breaking even...plus I have a say on amount of mileage I can put on it. You are right as long as the M3 doesn't sell for 40-45% of value at 3 year mark...buying seems better than leasing am I correct to assume this based on the numbers and your input?

 

[dnvr-ev]

Why is everyone complaining? You thought the car was worth it when you bought it. Who cares if someone else gets it for cheaper. Good on them. I want as many people as possible in these cars. Guess what, prices change. And Tesla just reacts faster than the other auto manufacturers.

Because I am driving down the street and someone pulls up to me in the exact same looking car and brags that his car is $500 a month and mine is $1000 a month. I know that Tesla sold his car at a loss and sold mine at a profit. Every month I make my payment, several hundred dollars is going to him.

It’s basically car welfare.

 

[voip-ninja]

Thanks, I think I am gearing more to buying because in the numbers I posted , yes I did not include the value of the car at the 3 year mark but even at 50% value at 3rd year. I think I would still come ahead by $1-3k also these numbers did not include the tax refund ( I mentioned it in it but did not deduct that from the 3 year cost) which I will actually deduct once I receive it..I would also be allowed to drive the car w.e amount of milage I want... (this can be good or bad for value if I plan to trade in) so I really don't see how this new lease program is really convenient if I am not actually going to "save at least 4-5k at the 36 month mark in total costs going with lease. I am saving on monthly going with lease but I come away with nothing...while buying I spend more per month but pay less in total 36 month cost after tax deduction and possibly make some money on it when selling or even breaking even...plus I have a say on amount of mileage I can put on it. You are right as long as the M3 doesn't sell for 40-45% of value at 3 year mark...buying seems better than leasing am I correct to assume this based on the numbers and your input?

Yeah my assumption was based around you getting no tax benefit, so that's also worth something, much more in states that still have their own incentives.

 

[Rawlings2019]

Yeah my assumption was based around you getting no tax benefit, so that's also worth something, much more in states that still have their own incentives.

Thanks for your input man!

 

[voip-ninja]

Because I am driving down the street and someone pulls up to me in the exact same looking car and brags that his car is $500 a month and mine is $1000 a month. I know that Tesla sold his car at a loss and sold mine at a profit. Every month I make my payment, several hundred dollars is going to him.

It’s basically car welfare.

Your priorities are really messed up if you feel some kind of mental anguish because someone driving an entry level Tesla that looks the same as your optioned one is paying less than you are for their car.

The money is literally not going from you to him. The money is going to your bank. Tesla already booked the revenue from your purchase.

You don't understand what welfare is.

 

[dnvr-ev]

Ugh. This again.

Going to go out on a limb here and guess your income is well into six figures. Out amongst us peasants, I'm fairly confident that twenty thousand dollars difference is quite significant to a lot of buyers. If it weren't, there wouldn't be Hyundai Accents sold every day. Or do you think some people are just frugal for amusement sake?

Just a tip, you sound like an elitist ass when you say stuff like this.



It's not, but you know there is this inconvenient fact that Elon told the world he would be selling $35K Teslas. He technically is, but just barely, and who knows for how long. It's a far cry from "finally a Tesla for the masses".

Don't fault folks for wanting a $35K Tesla when it was Tesla who told them it would be so. They painted themselves into this corner all on their own, and so this is where they are now.



They wouldn't have had to worry about any of this if either A) Tesla's accountants were presumably any good at predicting costs only two years into the future, despite being in the business of selling cars for five full years before then at that point, or B) Elon not just making sh!t up out of thin air, like how soon he will be able sell something and at what price.

No, I don’t make well into six figures. I bought a $60k car because I believed in Tesla and I also believed that they would protect my investment. So unless you make less than $100k, bought a model 3, and the price is now at least $5k less, your opinion is not relevant to my points.

I am not being elitist. I am saying Tesla needs to make a PROFIT, a term lost on so many people. Instead of barely going bankrupt every quarter and overestimating everything and selling everything at cost, here’s a novel idea, make a PROFIT.

And please, don’t respond by talking about economies of scale because the scale is not there. Bottom line, figure out how to make 60,000 Model 3’s a quarter and make a profit and don’t screw up your two flagship cars in the process.

 

[voip-ninja]

Thanks for your input man!

The bottom line is that there are only two scenarios where you are better off leasing;

1. The car resale tanks. This always benefits someone who leased because they are insulated from swings in resale value.
2. The person who needs to fit into a monthly payment that accommodates a lease but not a purchase.

Merits vs foolishness of option #2 would be good fodder for a different discussion thread.

 

[SageBrush]

Grab an SR while you can unless you want AP. Software limited cars are a real bargain.

 

[Garlan Garner]

Oh well.

It appears that everything that I purchased 7 months ago is cheaper now...including the car and its features.

Oh well.



Let me correct that - my insurance isn't cheaper.

 

[dnvr-ev]

Your priorities are really messed up if you feel some kind of mental anguish because someone driving an entry level Tesla that looks the same as your optioned one is paying less than you are for their car.

The money is literally not going from you to him. The money is going to your bank. Tesla already booked the revenue from your purchase.

You don't understand what welfare is.

I wish that I could see the world the way you do. At the times in my life where I was making lots of money I did. When things are tight and I stretched my budget to buy a Model 3, no I absolutely do not believe in car philanthropy.

 

[voip-ninja]

Oh well.

It appears that everything that I purchased 7 months ago is cheaper now...including the car and its features.

Oh well.



Let me correct that - my insurance isn't cheaper.

I'm insured with AIG now and they just ask you how much you want to insure for and it's full replacement.

I'm wondering if it's worth going back to them and asking for less coverage since my car would cost much less to replace now.

 

[Garlan Garner]

No, I don’t make well into six figures. I bought a $60k car because I believed in Tesla and I also believed that they would protect my investment. So unless you make less than $100k, bought a model 3, and the price is now at least $5k less, your opinion is not relevant to my points.

I am not being elitist. I am saying Tesla needs to make a PROFIT, a term lost on so many people. Instead of barely going bankrupt every quarter and overestimating everything and selling everything at cost, here’s a novel idea, make a PROFIT.

And please, don’t respond by talking about economies of scale because the scale is not there. Bottom line, figure out how to make 60,000 Model 3’s a quarter and make a profit and don’t screw up your two flagship cars in the process.

I love this response.

 

[Rawlings2019]

No, I don’t make well into six figures. I bought a $60k car because I believed in Tesla and I also believed that they would protect my investment. So unless you make less than $100k, bought a model 3, and the price is now at least $5k less, your opinion is not relevant to my points.

I am not being elitist. I am saying Tesla needs to make a PROFIT, a term lost on so many people. Instead of barely going bankrupt every quarter and overestimating everything and selling everything at cost, here’s a novel idea, make a PROFIT.

And please, don’t respond by talking about economies of scale because the scale is not there. Bottom line, figure out how to make 60,000 Model 3’s a quarter and make a profit and don’t screw up your two flagship cars in the process.

Hey I am not economy major person but the minute you said protect your investment..I lost it..haha A CAR IS NEVER AN INVESTMENT! Its a depreciating asset. Sure you can view it as investment if that car is going to generate cash through your business but for the most part its not an investment for the 99% of people...The minute you drive off the lot the car will lose value and everyday after that too...unless the car happens to become a collectible it will never be an "Investment". Your other comment on welfare is laughable... W.e money you pay goes to the company...its up to the company to do as it pleases with that money, whether its to invest in making more cars at higher profit or selling lower priced vehicles to eventually sell higher volume to the world... Selling 50,000 vehicles at 10,000 profit Vs Selling 300,000 vehicles at 2,000 profit is lower....I would take the 300,000 vehicle orders at $2000 profit. It would yield 100Mil more in profit and I would be happier every night I was able to get it in the hands of more people who desire it.

 

[Garlan Garner]

I'm insured with AIG now and they just ask you how much you want to insure for and it's full replacement.

I'm wondering if it's worth going back to them and asking for less coverage since my car would cost much less to replace now.

That's a shame that …… the replacement cost is so much lower.

 

[Garlan Garner]

Hey I am not economy major person but the minute you said protect your investment..I lost it..haha A CAR IS NEVER AN INVESTMENT! Its a depreciating asset. Sure you can view it as investment if that car is going to generate cash through your business but for the most part its not an investment for the 99% of people...The minute you drive off the lot the car will lose value and everyday after that too...unless the car happens to become a collectible it will never be an "Investment". Your other comment on welfare is laughable... W.e money you pay goes to the company...its up to the company to do as it pleases with that money, whether its to invest in making more cars at higher profit or selling lower priced vehicles to eventually sell higher volume to the world... Selling 50,000 vehicles at 10,000 profit Vs Selling 300,000 vehicles at 2,000 profit is lower....I would take the 300,000 vehicle orders at $2000 profit. It would yield 100Mil more in profit and I would be happier every night I was able to get it in the hands of more people who desire it.

Sometimes we have to understand the meaning behind what someone says....not the literal of it.

My Model 3 is an investment into my happiness.....its not depreciating at all.

 

[Cnasty]

Any SR+ peeps calling Tesla yet to explore a refund?

I got my car 13 days ago and may take them up on their refund offer as I don't need heated seats. Hell even just to get AP added as the price difference I am ok with!

 

[jamessmooth007]

I was looking at the LR RWD model 3 so I called my local Tesla to see if the price had changed since now you can supposedly order it “off menu.” The woman told me they don’t have pricing now but should by this evening. Would be sweet if it ended up being a tad cheaper!

 

[voip-ninja]

I wish that I could see the world the way you do. At the times in my life where I was making lots of money I did. When things are tight and I stretched my budget to buy a Model 3, no I absolutely do not believe in car philanthropy.

Well if you are expecting sympathy, I'm sorry, you won't be getting it from me. I live quite a bit below my means intentionally so that I can live well and retire at a reasonable age at some point in my life. That means making sacrifices, like buying a Tesla Model 3 instead of an Aston Martin Vanquish.