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MS - buy or lease?

Discussion in 'Model S: Ordering, Production, Delivery' started by Tslanwbie, Apr 4, 2017.

  1. Tslanwbie

    Tslanwbie Member

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    san jose
    Should I lease or buy? I typicLly lease my cars but I like the model s so much I may want to keep it around for 5-7 years.

    Also, apparently the interest rate on leasing is now 5% while lending rates are 1.5 to 2%.

    What I am worried about is the residual value 6 years Down the road.... what do you think is a reasonable assumption?
     
  2. tpham07

    tpham07 Member

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    Buy. Its estimated that Tesla's retain 62%+ of their value after 3 years vs an industry average of ~50%. If you want to keep the car for more than 3 years then buying is the only way to go really. Plus you'll have the freedom to drive as far as you want, and in a Tesla you'll find yourself wanting to drive a lot more.
     
  3. wamochi

    wamochi Member

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    San Diego, CA
    based on your 2nd sentence, i would say lease.

    i did exactly what you described. bought our first tesla thinking i'll hang onto it until 100k miles (7 years). then 27 months later we upgraded and got this one. first Model S was 87k, tesla bought it back 47k with 32,000 miles on it. needless to say, i decided to lease this time.

    disclosure - we got one of the generous 2016 Q3 deals that made it worthwhile. over the term of this lease i am paying less for a P90DL vs what i did on our 2014 S60. so YMMV, you'll have to crunch the numbers. we love the model S, but it has been changing rapidly so if you typically lease, you may end up doing what we did. and in CA you don't get any sales tax back when you trade it in (leasing you only pay sales tax on the part you "use", which on luxury cars amounts to several thousand dollars).
     
  4. timvracer

    timvracer Member

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    Maybe I'm foolish, but I keep cars a long time, and I plan on keeping mine for 8 years. Buy here. Also, I put a Reus audio system in, Opti-Coat, etc. - I wanted the freedom to do what I want with the car and know it's mine.

    But that's just me.
     
  5. Tslanwbie

    Tslanwbie Member

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    My OA told me that for April, Tesla is offering 1.49% for 72 months. Lease rates are closer to 5%...this choice is going to be easy
     
  6. oktane

    oktane Active Member

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    Lease if you want the latest and greatest, buy if you'd rather save money and keep the car long-term. If you lease don't expect to purchase the car at least end, since Tesla adds the Federal Tax Credit to the residual.
     
  7. Mike K

    Mike K Member

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    Los Angeles
    If this were a traditional car I'd say buy and that's what I did with my first 2013 S, thinking the same thing: "Why would I ever want to sell!?". The fact of the matter is technology is moving so rapidly at this point that I wanted to sell it (and did) about a year later.

    I now have a leased P85D which is perfect because with AP2 out I'm going to want that once they iron out of all the bugs and do a full rollout. So you know... in like 2021. :-D
     
  8. chillaban

    chillaban Active Member

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    I generally prefer leasing because of the lower interest paid (in terms of dollars) and I live in CA so financing/purchasing incurs sales tax and don't qualify for trade-in deductions…

    But the last time I tried leasing with Tesla, they gave me a financing agreement from US Bank that I didn't enjoy….
    - The money factor was quite high compared to competitors' leases
    - Large downpayment (around $5000)
    - The residual wasn't very high to begin with, and contains the $7500 tax credit (e.g. they bump the residual value by 7500 to make it look like the percentage is attractive)
    - There aren't a lot of ways to get out of it early: Exercising the lease buyout value before the 36mo term incured the early lease termination penalty (wtf!). Obviously, paying the remainder of the payments incurs a penalty too.
    - In addition to "wear and tear" defined as $0.25 per mile over the agreement, they also had a clause for arbitrary "excessive wear and tear" with no contractually listed monetary damage rate. Seems to imply if you go dramatically over the mileage, they will bill you more than 0.25/mi.
    - Had some friends who used US Bank leases during the GM bailout era, they complained that post turn-in, US Bank sent them large invoices for wear and tear.


    Overall, I honestly don't recommend Tesla's leases if the terms are similar to the ones I was offered.
     

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