New Leasing Details?

[Thundalicious]

Has anyone started the leasing process since the adoption of the new program ... with USA Bank.

I don't intend for this to be a pro/con thread of leasing vs buying.

I notice the fine print of the lease states that a down payment is due @ the time of signing, of course, that includes $5,000 down, 1st lease payment, and $700 acquisition fee.
Understandable of any lease. My question is with the next line: "Tax, title, license, registration and other fees are additional fees that are due at the time of signing."

Does this mean that in addition to the lease down payment above, there will be an ADDITIONAL down payment for those additional fees, or are these incorporated into the lease payment?

I put my $2500 down yesterday, filled out the financing application today. I expect Tesla to get back to me next week for more specific details on the lease.
I don't want to push my car into production obviously until I have all the leasing info up front.

There is a big difference between closing on the car with $6,900 versus $6,900 PLUS tax/title/registration on a $95,000 car. Seems like the up front cash for a lease would be closer to $12,000+.
Not much detailed information on the website about the specifics of the new leasing program.

I know I'm just jumping the gun, excited to pull the trigger. I'm expecting a call from Tesla Financing early next week to clarify. I just really want to push that car into production!!!

 

[Max Power]

I just finished up leasing terms for a P85D last week. Here are the terms as they were sent to me from Tesla Financing. I asked for them to break everything out. I'm in California w/ a 8% tax.



Sale Price $131,470
Leasing- 36 months; 15,000 miles per year ($0.25 per mile over)
Monthly payment: approx. $2,091
Due at delivery:
Capital cost reduction: $5,000 minimum, on approved credit ($2,500 already on file from your deposit)
Acquisition fee: $700 + $56 sales tax
Est. first monthly payment: $2,091
Est. title/registration fees: $695
Sales tax on capital cost reduction: approx. $400 (dependent on the capital cost reduction placed)
Residual value: approx. $67,976
Disposition fee: $300 (applicable if you turn your car back in at the end of the lease term)

After my initial $2,500 down, I'll owe approx. $6,400 at delivery.

Keep in mind that the $5,000 down is on approved credit - it is not guaranteed for everyone. The original terms presented to me required a higher down payment which obviously lowered my monthly payment, but I wasn't willing to put down any more than the $5K for a lease. I had to provide some additional documentation and proof of income in order to get my terms back down to the minimum down payment - it took about a week to get everything squared away after receiving the initial terms.

I hope this helps. Let me know if I can answer any other questions in regards to my leasing experience.

 

[drsaab]

Looks like a money factor of 0.001521 or interest rate of 3.65%

And they keep the 7500 credit.

correct?

 

[Max Power]

I forgot to mention the $2,091/mo. includes tax ($1,936 w/o) so the rate should be slightly less. I don't get the $7,500 credit but I do get a $2,500 rebate from California.

 

[MsElectric]

I forgot to mention the $2,091/mo. includes tax ($1,936 w/o) so the rate should be slightly less. I don't get the $7,500 credit but I do get a $2,500 rebate from California.

That's horrible and so wrong that they don't reduce the value of the car by $7,500. That's just wrong as they are essentially screwing customers out of the $7,500. Say it ain't so Tesla.

 

[shrink]

That's horrible and so wrong that they don't reduce the value of the car by $7,500. That's just wrong as they are essentially screwing customers out of the $7,500. Say it ain't so Tesla.

This was discussed in another thread, but Tesla essentially wasn't adding $7500 to the cap cost reduction on a lease because Tesla couldn't claim it as a company since they weren't turning enough of a profit. That is unfortunate but makes sense.

However, now that leases seem to be going through US Bank, they are presumably a profitable company and can claim the $7500. However, it does not seem to be passed on to the buyer and that's perplexing to me.

I was considering leasing an MS 60 as my daily driver and making my Roadster a garage queen. We are also lucky enough to have an MS 85 paid in full that my wife drives. However, if leases aren't crediting the $7500, then for me personally, I won't leave that money on the table. I'd rather purchase, claim the credit individually, and I'd have to take a loan out, but the interest would be much lower than 3%.

 

[Thundalicious]

Max Power,

So you rolled the "tax" on the car (8% in CA of $131,470) into the lease payments, correct?

Thanks

 

[http.com]

I just finished up leasing terms for a P85D last week. Here are the terms as they were sent to me from Tesla Financing. I asked for them to break everything out. I'm in California w/ a 8% tax.



Sale Price $131,470
Leasing- 36 months; 15,000 miles per year ($0.25 per mile over)
Monthly payment: approx. $2,091
Due at delivery:
Capital cost reduction: $5,000 minimum, on approved credit ($2,500 already on file from your deposit)
Acquisition fee: $700 + $56 sales tax
Est. first monthly payment: $2,091
Est. title/registration fees: $695
Sales tax on capital cost reduction: approx. $400 (dependent on the capital cost reduction placed)
Residual value: approx. $67,976
Disposition fee: $300 (applicable if you turn your car back in at the end of the lease term)

After my initial $2,500 down, I'll owe approx. $6,400 at delivery.

Keep in mind that the $5,000 down is on approved credit - it is not guaranteed for everyone. The original terms presented to me required a higher down payment which obviously lowered my monthly payment, but I wasn't willing to put down any more than the $5K for a lease. I had to provide some additional documentation and proof of income in order to get my terms back down to the minimum down payment - it took about a week to get everything squared away after receiving the initial terms.

I hope this helps. Let me know if I can answer any other questions in regards to my leasing experience.

Thanks for sharing Max, but WOW....that seems like terrible leasing terms. I've leased expensive bmw's before (including $100K+ 750il), and the leasing terms was far superior......my payment was around $1300K/mo., and less down. So if this is the better leasing terms that tesla recently announced, I cant for the life of me imagine what the leasing terms were like before the improved relationship with US Bank. This is truly disappointing to say the least. One would think if Tesla was so confident about their vehicles and the later resale market (after 3+ years), then the residual value and more attractive leasing terms would be reflected in that expression of confidence. Sheesh.

By my calculation according to your figures Max, you will have paid approx. $82K over a 36mo. period, to lease this vehicle. That leaves just $48K or so of the remainder of the original sticker price. This does not seem very favorable or desirable in the slightest, unless I'm missing something here?

 

[MsElectric]

Thanks for sharing Max, but WOW....that seems like terrible leasing terms. I've leased expensive bmw's before (including $100K+ 750il), and the leasing terms was far superior......my payment was around $1300K/mo., and less down. So if this is the better leasing terms that tesla recently announced, I cant for the life of me imagine what the leasing terms were like before the improved relationship with US Bank. This is truly disappointing to say the least. One would think if Tesla was so confident about their vehicles and the later resale market (after 3+ years), then the residual value and more attractive leasing terms would be reflected in that expression of confidence. Sheesh.

By my calculation according to your figures Max, you will have paid approx. $82K over a 36mo. period, to lease this vehicle. That leaves just $48K or so of the remainder of the original sticker price. This does not seem very favorable or desirable in the slightest, unless I'm missing something here?

I agree and it seems this lease is a rip off. They even essentially steal away the $7,500 rebate for the car and you get no benefit of that. SO after 3 years you have given them $82K and though that leaves $48K they still want to charge you $67,976 if you want to buy the car at the end of the lease period. What a horrible deal. It seems like the lease is designed to screw customers every which way possible. Higher monthly payments, Higher down payment, no benefit of the rebate if you decide to buy the car, absurd buyback price at the end of the lease.

These lease terms are especially designed so they can steal away the car you are leasing at the end of the lease period for nothing so they can turn around and sell it as a CPO for a nice markup after the lease is over. And to add insult to injury you get no benefit of the $7,500 rebate if you want to buy the car you are leasing. A horrible deal.

 

[Thundalicious]

agreed. definitely gonna avoid the lease.

with purchase, you can get the $7500 and still take advantage of the 50/43% buyback between 36-39 months.
if you are able to push the $7500 back into the loan, you should definitely be above water @ 36-39 months.
additionally, you have the freedom of financing/purchase over leasing.
this would apply to most loan scenarios with as little as 10-15% down (10 is required anyway) and 3% over 72 months.
financing outside of Tesla could result in more attractive terms, but I'm not sure they guarantee the 50/43% resale value buyback if you finance outside of Tesla.

 

[Max Power]

@Thundalicious - yes, the tax is part of each payment in a lease - so it's $1,936/mo. w/o tax, $2,091/mo. after tax.

@http.com and @mselectric - while I agree it's not the best lease terms I don't think they're entirely out of line as the total monthly payments to Tesla will be approx. $70K (w/o tax) after 36 months. I'm also with you that I expected a higher residual value than the approx. 47% Tesla estimates as I've leased other high-end vehicles with noticeably better residuals.

I can tell you that prior to the US Bank announcement the lease payment estimator in the Design Studio showed a significantly higher payment. If I remember correctly, the same optioned P85D prior the US Bank announcement had an estimated monthly payment of around $2,200 and required $7,500 down.

 

[Max Power]

I tried to reply to this yesterday, so I apologize in advance if a response suddenly pops up twice.

@Thundalicious - yes, each lease payment has sales tax (a downside of leasing in sales tax state). So the initial payment is $1,936/mo. - with 8% sales tax, it brings it up to $2,091.

@http.com and @MsElectric - I agree w/ both of you that they aren't the best terms, but I don't think they're entirely out of line w/ other lease rates I've had w/ different Audi and MB leases I've had in the past. After 36 months, total payments (not including tax) will total roughly $70K. I was more disappointed in the residual value than the money factor as I expected it to be higher than the 47% Tesla estimates.

I can say the US Bank announcement significantly reduced the payments as prior to the US Bank backing, the same optioned P85D had an estimated pre-tax payment of about $2,200 and required a $7,500 down.

 

[MsElectric]

As much as I love Tesla I can't believe they are pretty much ripping off their lease customers every which way possible and not applying the $7,500 rebate as a cap cost reduction is absolutely unacceptable. I can't imagine leasing a Tesla on principle on that alone. To add insult to injury if you try to buy back the car at the end of the lease they add the tax rebate to the depreciated value to make the car too expensive for you to consider buying. Not only are they not sharing the tax rebate with you, they actually use it against you if you decide to buy the car you are leasing. What a horrible lease deal they have going.

 

[http.com]

As much as I love Tesla I can't believe they are pretty much ripping off their lease customers every which way possible and not applying the $7,500 rebate as a cap cost reduction is absolutely unacceptable. I can't imagine leasing a Tesla on principle on that alone. To add insult to injury if you try to buy back the car at the end of the lease they add the tax rebate to the depreciated value to make the car too expensive for you to consider buying. Not only are they not sharing the tax rebate with you, they actually use it against you if you decide to buy the car you are leasing. What a horrible lease deal they have going.

Agreed. It's really unfortunate & quite upsetting actually.

 

[broncophil]

well, we were gonna go from a 2 tesla household to a zero tesla house due to these details. the model x is delayed, again, so we are going to cancel our reservation and get our $5k back. we are probably just gonna get another range rover. and for me, my model s, even though i have not got the details, if it are even remotely similar to the above, i'll just get a lexus LS. the LS is much more luxurious anyways.

 

[eye.surgeon]

I'm not sure I understand the outrage. If the $7500 federal rebate is added to the residual value, that reduces what you pay during the lease by $7500. The only way this would hurt you and not help you is if you decide to purchase after the lease, which generally speaking is not a good idea anyways unless you are confident that you can win the residual value guessing game with the bank, and the bank is much better at it than you are. In the end, if you treat the lease as a lease, you get your $7500 in the form of a lower monthly lease payment.

 

[Lloyd]

That is true as long as the car is worth the residual value at the end of the lease. If it is not, then you could be owing at the end to turn it in. I assume that this lease is an open ended, and not a closed lease.

 

[eye.surgeon]

That's incorrect. All the risk of the residual value lies with TM's financial partners underwriting the loan. That value is agreed upon in the terms of the lease.

 

[Lloyd]

That's incorrect. All the risk of the residual value lies with TM's financial partners underwriting the loan. That value is agreed upon in the terms of the lease.

If that is true, then it is a closed end lease.

Open-End Lease Definition | Investopedia

Closed-end leasing - Wikipedia, the free encyclopedia

Open vs Closed End Leasing: Which Is Right For You? - Articles - Leasing - Articles - Government Fleet

 

[broncophil]

I'm not sure I understand the outrage. If the $7500 federal rebate is added to the residual value, that reduces what you pay during the lease by $7500. The only way this would hurt you and not help you is if you decide to purchase after the lease, which generally speaking is not a good idea anyways unless you are confident that you can win the residual value guessing game with the bank, and the bank is much better at it than you are. In the end, if you treat the lease as a lease, you get your $7500 in the form of a lower monthly lease payment.

well a lot of people, like myself have actually leased a car for business purposes, and made a solid 3k - 4k profit by selling the car to carmax before your lease expires ... obviously that will not be feasible with the model s... also, judging by the calculations provided, their "BUYOUT" is not traditional in the sense that they are coming up with the end of lease buyout amount out of thin air .. in this case, the buyout looks like it should be about 20k less?