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Own vs Lease?

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When I watch YouTube reviews of the Model Y or Model 3 there’s one thing that tends to come up in most of the reviews, which is:

“You should probably lease a Tesla instead of buying one because the tech advances at such a rapid rate each year.” (or some variation of that statement)

What do y’all think about that statement? I know you can’t lease a Model Y, but just in general, do y’all agree with that statement at all?

I plan to take delivery of a MYP within the next two months, and I plan on buying it and owning it for 8+ years. I figured that if the hardware or MCU became out of date I could just pay the money to have it upgraded. Am I wrong in thinking that?
 
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One big thing with the Model 3 that makes it a horrible lease is you have zero option to buy it at the end. So 100% of the money you paid is guaranteed to be gone. Generally with a lease, if you decide to keep the car, then you can buy it at the end. In that case, you can get some of your equity back. You can't with the M3 lease.

The model 3 came out in 2017-2018. It's been almost 3 years. There really haven't been any groundbreaking changes in the last 3 years that haven't been added to the cars via software updates. So I bought mine. I'm rolling the dice that even if I decide to get a new car in 3 years, the resale value will still be high enough to make it make sense (Model 3 was rated the car with the least amount of depreciation. 2 year old used sales weren't drastically than a new car). It still gives me the option to keep the car though if i want.
 
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In my opinion, the only reasons to lease are:
1) You want a new car every 3 years or,
2) You can write off the expense for business purposes or,
3) You can afford the lease payment but can’t afford the monthly loan payment and are considering buying at the end of the lease (not possible due to Tesla not giving the buy option at the end of lease on M3).
4) You don't actually drive many miles. Most leases have clauses for penalties for exceeding a set total of miles that is at or below average per year numbers. One thing that can really jump up on you is how much you'll end up driving. I was high 40K in the first 12 months. But there's sort of a divide among Tesla owners in that there are a lot of owners out there, especially among S and X owners, that drive very few miles. It is certainly not unheard of to find a 2+ year old Model S with less than 10,000 miles on it. I've heard this from Ranger techs, too.
 
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In my opinion, the only reasons to lease are:
1) You want a new car every 3 years or,
2) You can write off the expense for business purposes or,
3) You can afford the lease payment but can’t afford the monthly loan payment and are considering buying at the end of the lease (not possible due to Tesla not giving the buy option at the end of lease on M3).

the amount of people that use #2, and then use the "business" vehicle for doing things like taking little Jimmy and Sally to soccer, road trips, etc… grrrr.
 
“You should probably lease a Tesla instead of buying one because the tech advances at such a rapid rate each year.” (or some variation of that statement)

The underlying technology of the car (motors, computers, batteries, charging) is in general not being developed. Tesla is working on scaling their production of batteries so that they are able to produce more batteries at a lower production cost. Its not clear how their battery projects will turn out, whether Tesla will make more money, sell cars cheaper, lower weight, or increased range. Tesla already sells cars with 300+ miles range so there is really no upcoming advantage that will justify the money-wasting lease.

The motors, electronics, screens, and computers themselves have been around for a long time. They won't hardly be developing at all. The software updates electronically.
 
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When I watch YouTube reviews of the Model Y or Model 3 there’s one thing that tends to come up in most of the reviews, which is:

“You should probably lease a Tesla instead of buying one because the tech advances at such a rapid rate each year.” (or some variation of that statement)

What do y’all think about that statement? I know you can’t lease a Model Y, but just in general, do y’all agree with that statement at all?

I plan to take delivery of a MYP within the next two months, and I plan on buying it and owning it for 8+ years. I figured that if the hardware or MCU became out of date I could just pay the money to have it upgraded. Am I wrong in thinking that?
I don’t agree with the statement you referenced. I agree with your thinking. For so many reasons, leases are a choice for fools IMO.
 
Some version of this lease vs buy argument has been on car forums as long as leasing vs buying has existed, and normally starts a big @#$%Q@$ argument when people post it.

I have seen several arguments for and against, and have both a purchased model 3 and a leased late model BMW in my garage at present time. Blanket statements like "leasing is dumb" or "buying these cars are for silly people" simply dont work for any car. It depends on the individual, their buying needs and habits etc.

One thing I would say is, on THIS car (tesla) there is less "angst" at owning it for a long time, they have been sending out over the air updates to their cars for several years now. While technology continues to advance, and its inevitable that at some point the current model 3s will fall behind whatever the new ones are, that does NOT preclude one from owning the car for a long time.

In general, since there are fewer moving parts than a typical gas car, the averages say that it "should" be cheaper to maintain over time. Couple that with the OTA upgrades, and a tesla is a great car to "own" in my opinion.... and I put my money where my mouth is, by buying one vs the last 15 years of BMW leases I have been doing.

In general, buying a car vs leasing one makes sense if you are the type to drive a car for a long time (6+ years). IF one is the type to want a new car every 3-4 years, you are going to have a payment either way you go, so you might as well pay that payment on a new car and lease one over 3 years or so. After two sets of 3 year lease cycles, you can normally tell yourself you would have bought a car.

You still only save money if you dont pay the car off in 5 years and then want to trade it in on something newer. Buy it and hold it for a good long while.. 6, 7, 8 or even longer years, and buying always comes out on top. For the person who buys a car then turns around and wantw a new one in 2-3 years, the math usually works out to be the same either way.

One thing leasing a car does is FORCE you to make a decision on what to do at the end of the lease, regardless of what is going on at the time in your life, or in the world. Plenty of people have leased cars coming up they need to turn in, and have had difficulty doing so. They also have to buy, extend, take some action. In exchange for that, they never drive a car outside of warranty, and give it back when they are done with it, and get the new version of whatever it is.

Same argument as lease vs buy at any car line... I just personally think that, with tesla model 3s, it makes sense to buy and hold one, as its likely higher mileage versions will not cost appreciably more to run than lower mileage versions.....unlike the average BMW leased. BMW gets a bad wrap, but their cars are fairly reliable actually.. they just cost a lot to fix when you need to fix them, especially if you take it to a dealer outside of warranty).

TL ; DR?

Blanket statements are bad in general, because very few things are one size fits all. In this case, for most people, I think the model 3 / Y makes a compelling argument to buy rather than lease, for a few different reasons previously stated.
 
I don’t agree with the statement you referenced. I agree with your thinking. For so many reasons, leases are a choice for fools IMO.

Stupid comment. I lease all the time, as I like new cars and get them every 24 to 36 months. Guess what - no depreciation effect of trading in that way. So, no leases are not choice for fools, but an option for me that loves getting the latest and greatest. Even when I bought cars before, I ended up trading out within 3 years or less, so that is very stupid, unless it was a hot car. BMW and Mercedes are better off to lease most of time and would usually be foolish not too. I could own two new BMW’s for less than what I can pay for a brand new one over 6 years and have full warranty to boot.

My wife on the other hand, pays cash for all of her cars and keeps them much longer, so opposite of me. I definitely don’t call her a fool for doing that, as that is why there are choices and different people like different things.

The fools is the person who says that and knows nothing..... LOL
 
I lease all the time, as I like new cars and get them every 24 to 36 months. Guess what - no depreciation effect of trading in that way.
While leasing can be a perfectly fine choice, it’s not true about leases avoiding depreciation. In fact, the lease factor and residual values used to calculate the lease payment incorporate the predicted depreciation over the term of the lease. More miles and longer period incorporate higher depreciation.

I have leased many cars, including our current X. Sometimes I have purchased them at the end because the residual value is less than the market value (as our X will be due to super low miles). I purchased my 3P outright.

It’s easy to forget that no new car purchase or lease is a “good” financial decision. Want a good financial decision? Buy a used, low mileage car and then drive it until it basically rusts out. The vast majority of us don’t want to drive a used, crappy car - so we buy or lease new.
 
While leasing can be a perfectly fine choice, it’s not true about leases avoiding depreciation. In fact, the lease factor and residual values used to calculate the lease payment incorporate the predicted depreciation over the term of the lease. More miles and longer period incorporate higher depreciation.

I have leased many cars, including our current X. Sometimes I have purchased them at the end because the residual value is less than the market value (as our X will be due to super low miles). I purchased my 3P outright.

It’s easy to forget that no new car purchase or lease is a “good” financial decision. Want a good financial decision? Buy a used, low mileage car and then drive it until it basically rusts out. The vast majority of us don’t want to drive a used, crappy car - so we buy or lease new.

Totally agree with you. :)
 
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I used to always say I will own this new car for 10 years every time I bought a new car.
I sold after 4 years.
Then I used to say I will own this new car for 5 years.
I sold after 3 years.
Then I used to say I will own this new car for 3 years and sold after barely 2 years.

Then I leased a car for 3 years thinking I will have to own it for 3 years for sure.
And then I traded it in after 2.5 years.

I had no option to lease when I bought my model 3. I will probably lease next time.
 
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It's up to the individual to spend their money any way they want to.

Leases are a good way to own fairly expensive new cars often without having to fork out a ton of money.

I prefer that I do not "feel" the expense of a car in any major way. So I don't lease cars anymore. But that is what I want, not what others may want.

I don't know about Tesla leases in general as they are "no buyback" closed end leases. They are also cars that depreciate much less than ICE cars, even during COVID times. It may change the equation.
 
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Leases are a good way to own fairly expensive new cars often without having to fork out a ton of money.
That's actually one of the best advantages of leasing. But the best one is just purely cash flow. If you take the difference between the car payment vs lease of exactly the same car, then invest it wisely you might actually come out financially ahead. Might. Present value is a great thing, but unless you're an actuary or other numbers person then you probably aren't interested in that level of money management.
 
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4) You don't actually drive many miles. Most leases have clauses for penalties for exceeding a set total of miles that is at or below average per year numbers. One thing that can really jump up on you is how much you'll end up driving. I was high 40K in the first 12 months. But there's sort of a divide among Tesla owners in that there are a lot of owners out there, especially among S and X owners, that drive very few miles. It is certainly not unheard of to find a 2+ year old Model S with less than 10,000 miles on it. I've heard this from Ranger techs, too.

There’s a balance, though. I drive very few miles (under 3k a year in my first year with my 3, and its my only vehicle) and leasing does not generally make sense for me because at the end of the lease term, my car will have so few miles that the calculated residual value for the lease undervalues it. The ideal situation for a lease is to drive almost exactly your allotted number of miles per year but no more.

I’ve never found Tesla’s lease rates particularly competitive, so I’d never consider leasing one. On the other hand, I’d never buy something like a Bolt because lease rates are competitive and I worry about it holding its value.
 
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There are good points with both leasing and owning, I prefer to buy and own it and keep it without continuous monthly payments. Also by owning my ride I can do what the Fuzz I want to do to it. Now let’s say I am much older like the high 70’s and I don’t want to worry about maintenance, replacing new tires and not having to worry about a car breaking down etc. at that point I would lease.

Fred