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New Situation on Purchase vs Lease

Discussion in 'Model S' started by Kingira, Nov 26, 2016.

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  1. Kingira

    Kingira New Member

    Joined:
    Nov 20, 2016
    Messages:
    2
    Location:
    The Villages, Florida
    I am different than many of the people who have posted here.
    I have the money up front to purchase with no problem. Here is my dilemma

    Let’s start with the assumption that I can easily afford to buy the car outright. I am expecting delivery of my car in December of 2016

    Paying cash:
    1) If I buy it outright I get a $7,500 dollar tax break
    2) I have no restrictions on mileage
    3) I can always sell it back to the dealer after 3 years
    4) This car has unlimited free use of the Tesla supercharger. Which means theoretically and especially on any trips out of The Villages it will cost nothing to charge. When at home I can charge it there. All new cars purchased after Dec 31 will have a restriction on free use. Roughly only 1,000 miles. Then they must pay.
    5) The sales tax here is going up 1% as of Jan 2017. So, my lease payments will be increased at that time. But not if I purchase
    Taking a lease for 12,00 miles a year:
    1) Since I am planning on buy a new car in three years people tell me that a lease is better
    2) Battery technology is improving very fast so a new car in 3 years might be a significant difference
    a) however, i can always sell it after three years. Since Tesla is no longer going to offer unlimited supercharging for free it might be a good selling point.
    3) Easier to get rid of the car after three years because it is theirs.
     
  2. justg0

    justg0 Member

    Joined:
    Oct 26, 2016
    Messages:
    224
    Location:
    Redmond, WA
    I have been leasing cars for the past 6 years now. I don't get any tax/business benefit on a lease. I only was leasing because I didn't want to pay a huge amount or finance for something that depreciates so much and I wanted a new car every 3 years. But this is the last time I will lease and here's why. My driving pattern changed and I am over my miles, way over. I will have to pay extra to cover that. I want to get out early in my lease, as I am getting a tesla soon, but it is not easy. My car is worth way less than the payoff amount (BMW is known to keep their residuals very high to make lease payments attractive). So I want the flexibility to drive as many miles as I want and I want to decide when I will change my car. So i am deciding to buy - actually finance as the interest rates are so good.
     
  3. Kenx008

    Kenx008 Member

    Joined:
    Oct 22, 2016
    Messages:
    28
    Location:
    Minnesota
    For 2a on leasing, they add the tax credit back in when you purchase the vehicle thereby nullifying the tax credit.

    If you can write off any mileage for business than leasing sounds like an ideal solution for you. It also depends on how much you plan on driving, there's a surcharge of $.25 a mileage overage on leases. It's hard to predict how much the cars will resell for in 3 years especially with how fast Tesla changes but if you know you will be trading it in when 3 years comes up than I would suggest lease. This way you know exactly how much you will be spending.
     
  4. Uncle Paul

    Uncle Paul Member

    Joined:
    Nov 1, 2013
    Messages:
    767
    Location:
    Canyon Lake,CA
    Leasing usually gives the best results if you know, in advance, exactly how many miles you will be putting on your car and exactly when you will be wanting to trade in in on a new vehicle.

    If you put more miles on it, you will be charged a premium for every mile driven. If you put less miles on it, you will not recieve anything back for the remaining miles.

    It is pretty much a challenge to know in advance which will work out best for you, as every purchase and every lease is customized for every purchaser.

    Electric vehicles make this even more difficult, as there is little certainty in the precise value of your unique car at the end of your lease.

    Many leasers gestimated the mileage they might be putting on their vehicles, but then tended to drive their amazing electric vehicles more than they expected.

    Leases are very popular for people who just want to walk away from their cars every 3 years. Very convenient, but often more expensive than a straight purchase.
     
  5. Tdriver

    Tdriver Member

    Joined:
    Jan 20, 2015
    Messages:
    224
    Location:
    Palm Desert, CA
    Don't forget you will be paying sales tax on the full amount on a purchase.
     
  6. sdorn

    sdorn Director of Awesome

    Joined:
    Oct 9, 2016
    Messages:
    906
    Location:
    Georgia
    Some states (like Georgia) charge you the full tax on a lease as well.
     
  7. patrick40363

    patrick40363 Member

    Joined:
    Mar 25, 2014
    Messages:
    503
    Location:
    Cali
    Tesla leases are not very good. I use mine for business but purchased instead of leasing. I will get a new car after the warranty is reached and by then most of the big depreciation will have been smoothed out.
     
  8. bswn1

    bswn1 Member

    Joined:
    Feb 13, 2016
    Messages:
    415
    Location:
    CA
    I chose a lease, but most on the forums say it's a bad decision if you're not doing it through your business. Fair enough but for my situation it worked.

    It's hard to predict the values of these cars with technology moving so quickly!
     
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