P100D Leasing - Wow?

[Racerx22b]

So my wife and I are love our MS85 and she's now hooked on the power. I told her she'd freak if she had the P100D and she said when we replace it that is what we are gonna get. Yeah for me!

So just for the heck of it I looked at the leasing offer. We purchased our MS85 as she is one to keep cars for 8yrs or so (it's her car). But with how much change is occurring every 6 months or so with Tesla I was thinking we'd lease so we could just "upgrade" every 3yrs instead of holding onto the car for an extended period of time.

My understanding with a lease is that you basically pay down the depreciation (I know that is oversimplification). The per month charge on a loaded P100D has you laying out about $90,000 over 3yrs (including the down payment). So they're basically saying that your $160,000 car will be worth $70k in 3yrs.

I know high end cars take a big hit but this seems a bit excessive. Or am I crazy to think it'd be worth more in 3yrs?

 

[SabrToothSqrl]

I've never found lease math to be to my advantage vs. just a normal loan and then selling it at the same time period... someone with excel feel free to show us the numbers!

 

[byan1232]

I completely agree with @SabrToothSqrl there. Honestly I would only lease if it were a tax write off.

 

[Boourns]

Generally, more loaded cars depreciate more steeply than cars with fewer options. Also, remember you're still paying interest with a lease. How much you pay in interest is dependent on the rate, referred to as the "money factor" in a lease. This is often times higher than someone with excellent credit could get on a car loan -- something like 4% or more. Not sure what Tesla's current money factor is.

 

[sandpiper]

So my wife and I are love our MS85 and she's now hooked on the power. I told her she'd freak if she had the P100D and she said when we replace it that is what we are gonna get. Yeah for me!

So just for the heck of it I looked at the leasing offer. We purchased our MS85 as she is one to keep cars for 8yrs or so (it's her car). But with how much change is occurring every 6 months or so with Tesla I was thinking we'd lease so we could just "upgrade" every 3yrs instead of holding onto the car for an extended period of time.

My understanding with a lease is that you basically pay down the depreciation (I know that is oversimplification). The per month charge on a loaded P100D has you laying out about $90,000 over 3yrs (including the down payment). So they're basically saying that your $160,000 car will be worth $70k in 3yrs.

I know high end cars take a big hit but this seems a bit excessive. Or am I crazy to think it'd be worth more in 3yrs?

Personally I think it is excessive. But Tesla's is not going to take any risk on this. They want to ensure that your vehicle is worth more than what they have into it when you return it.

That said, when 3 years is up, if you figure that the vehicle is worth more than the residual, you can buy out the lease and resell it. I leased my P85D for business reasons, and because of the drop in the CAD$, my vehicle will be worth a lot more than the residual. So my intent is to buy it out and resell it.

 

[wesley888]

Tesla set the residual quite high at 59% after 3 years, but the rate is high as well at 4.5%. I just put 160,000 into my Excel spreadsheet that I created for my own comparison between leasing and lending. For 3 years, you'll paid about $16K interest. Plus the tax and all kind of fee, total out of pocket is about $92K.

 

[sandpiper]

Tesla set the residual quite high at 59% after 3 years, but the rate is high as well at 4.5%. I just put 160,000 into my Excel spreadsheet that I created for my own comparison between leasing and lending. For 3 years, you'll paid about $16K interest. Plus the tax and all kind of fee, total out of pocket is about $92K.

Of course. But what's your opportunity cost? Can you earn 4.5% on your money? Historically I've done a lot better than that.

Anyway... my point is that for the most part leasing and purchase financing aren't really much different.

 

[wesley888]

I do not know a thing about investment.

 

[zambono]

Maybe 90k after 3 years but I don't see anybody paying more than that in the secondary market. Remember that in 3 years time that person will be able to compare with all the newer bells and whistles not to mention other automakers with electric vehicles.

 

[shokunin]

3 years is a long time in Tesla years. There could AP3.0 with redundant sensors/systems needed for regulatory approval for L5. The Model S would 7 years old and due for a Model S 2.0.

Lots of depreciation forces between now and the next redesign of the S. By then I may be more interested in a maximum plaid Roadster 2.0

 

[number12]

Depends how your state does taxes.

Cpo ?

 

[thefortunes]

.....By then I may be more interested in a maximum plaid Roadster 2.0

You do know there is already a Roadster 2.0 (and 2.5), right? Or are you one of those Tesla owners that think life started with the Model S?

 

[Blueeyedme]

I think of it this way. What is the market for a 2013 Model S in 2016? I wouldn't want one. Tesla's are all about technology - who knows what will be available 3 years from now. I lease technology, I don't buy it.

 

[Az_Rael]

. What is the market for a 2013 Model S in 2016? I wouldn't want one

Hey now! (I am buying a 2013 right now )

But you are right, I am getting a CPO P85 that was probably just north of 100k new for $58k

 

[shokunin]

You do know there is already a Roadster 2.0 (and 2.5), right? Or are you one of those Tesla owners that think life started with the Model S?

Yes, there's even Roadster 3.0 BATTERY packs. I'm talking specifically about next-gen Roadster redesign. I've been around before the Model S went into production.

 

[CSFTN]

So my wife and I are love our MS85 and she's now hooked on the power. I told her she'd freak if she had the P100D and she said when we replace it that is what we are gonna get. Yeah for me!

So just for the heck of it I looked at the leasing offer. We purchased our MS85 as she is one to keep cars for 8yrs or so (it's her car). But with how much change is occurring every 6 months or so with Tesla I was thinking we'd lease so we could just "upgrade" every 3yrs instead of holding onto the car for an extended period of time.

My understanding with a lease is that you basically pay down the depreciation (I know that is oversimplification). The per month charge on a loaded P100D has you laying out about $90,000 over 3yrs (including the down payment). So they're basically saying that your $160,000 car will be worth $70k in 3yrs.

I know high end cars take a big hit but this seems a bit excessive. Or am I crazy to think it'd be worth more in 3yrs?

Not sure that anyone precisely has answered your question. IMO the answer is 41% depreciation plus ~4-5% interest on a 3 year lease, high-end/expensive car not on a sales promotion is pretty much par for the course.

 

[dhcp]

I agonized over the leasing thing back with an AMG Mercedes that we fully intended to buy outright. For us we were able to write off a significant amount of the lease payment due to self-employment and then just buy out the car at the end of the lease. If I remember right, we had had the highest lease payment possible because that was the tax-deductible part and we ended up with the lower buy-out at the end.

The only reason it made sense (leasing) was because of the tax deduction, which is easy if you are self-employed and lease. Buying outright isn't nearly as easy to deduct. If it wasn't for the deductions then leasing would not have made financial sense in our case.

 

[theslimshadyist]

Tesla set the residual quite high at 59% after 3 years, but the rate is high as well at 4.5%. I just put 160,000 into my Excel spreadsheet that I created for my own comparison between leasing and lending. For 3 years, you'll paid about $16K interest. Plus the tax and all kind of fee, total out of pocket is about $92K.

Mega OUCH!

 

[Camera-Cruiser]

Hey now! (I am buying a 2013 right now )

But you are right, I am getting a CPO P85 that was probably just north of 100k new for $58k

You'll be just fine with your new 2013 CPO. I've had mine for 13 months and love it. Do I lust for P100? Sure, but not for $100K more than mine.

 

[Canuck]

I lease technology, I don't buy it.

You lease your cell phone, computer, tv, laptop, etc.?

It would bother me to lease my vehicle and have someone else tell me how much I can drive it per year without paying additional fees. Plus, it's not like you're avoiding depreciation with a lease. It's factored into the equation, along with all the other limiting terms.