Question about tesla lease

[sloth]

I was thinking about leasing a tesla model y. I wanted to trade in my current car. I was wondering if anyone had experience with leasing with tesla. Does the trade in go towards the Dow payment and lower your monthly payments for the lease?

 

[jjrandorin]

Leasing X car is the same as leasing Y car, from a money point of view. If you put money down on a lease, it goes toward paying off the lease fee. You can make the monthly payment whatever you want to on a lease, by putting more money down, but it doesnt change how much you are paying overall.

I use to use this example a lot, to try to help people understand what I just said above. Here is a post I made previously here explaining Leasing, from this thread:

Returning lease but lease balance is greater than Vehicle Value and Tesla is charging the difference, does it make sense?

hi guys, I am returning my model 3 lease next month and getting a new model Y. but after getting my early lease termination quote, it’s charging the difference between Adjusted lease balance and Vehicle Value. I believe the $26,400 vehicle value on 2019 model 3 makes no sense, should I call...

teslamotorsclub.com

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No (although they would likely have the lease disposition fee unless Tesla waives that.

There is some additional math involved in leasing, and money factors (instead of interest rates) but for conceptual purposes, it is likely easier to think of leasing a car like renting an apartment, with or without the option to buy it at the end (tesla = without)

1. You are renting the apartment (car). This means YOU are not the owner of the apartment, you are just using it for a period of time, then returning it.

2. If you are renting an apartment (car) for $1000 a month, for a term of 3 years, that means the total cost of the apartment (car) for you to rent is $36,000.

3. If you choose to pre pay some of that money to get a lower payment on the apartment (car) it doesnt change what your cost to rent is, just what your monthly outley of cash is.

If your apartment rental (car lease) agreement is for 36k, but you decide to pre pay 12k of it up front, now your balance (whats left) is 24k over the next 3 years. The payment will still be 36 = rent payments so you get to tell all your friends that the swanky new apartment you rented that is going for 1k for everyone else, YOU are only paying $667 (rounded up) a month for due to your negotiation skills. Its really because you pre paid part of the rent, but you may either not know that, or know and omit that fact when you are talking about it, because, hey, the rent payment you are making every month IS $667 a month, and that 12k you put as a cap cost reduction is gone.

4. If you want to move early (turn in the car early) you still owe that money, whatever is left on the 24k balance above. The further you are into the rental (the more payments you have made) the less you have remaining as a balance, but you still have that balance at the end.

5. The apartment owner may have limits on how many people you can have over for a party, where they might be able to park, how the apartment clubhouse gets used, etc ( Car = Number of miles on a lease)

6. The apartment owner (company that owns the car) "might" let you out of the lease early with no cost, if for some reason rental property prices have skyrocketed and they know they can rent it out to the next person for a lot more than what you are paying (car worth more than residual at the end). They certainly dont have to do this however, as THEY own the property and the only agreement you have other than a rental agreement is a price to buy the property at the end of the rental period (if they offer that, Tesla does not).

7. They are going to charge you a cleaning fee to clean the apartment no matter how well you clean it, when you move (car = lease end disposition fee). They "might" waive the apartment cleaning fee if you choose to simply move into another apartment on the premises, or they might not. Its completely up to them if they waive that fee because its in your contract.

8. Since you are renting the apartment, if you damage things, you are liable to pay for that damage before you move, to return the apartment to the state it was when you rented it. Even if YOU think you improved the apartment with the Highlighter Green paint you painted every room with, or the Ceiling fan you put up (car = tinted windows, rear diffusers, spoilers, carbon fiber bits, etc etc), they do not have to accept that on return.

If you leave the Ceiling fan, and the Highlighter Green paint, they can not only keep the Ceiling fan (and perhaps move it to their own house) they can charge you for removing it and re painting, and thats not part of the cleaning.

Minor damages like nail holes from hanging simple paintings etc, are excluded as they spell that out in the rental agreement (lease end agreement for small damages being waived, and what those are)

9. Since you are renting the apartment, if the bottom falls out of the market because crime shoots up in your area, making your apartment worth a lot less, your only obligation is to fulfill your rental agreement, then you can move (car = car not worth residual value at lease end). You dont have to sell apartment, etc, but you do have to deal with the timing of the lease end and what you might do at the end to move to another apartment (car = lease end and acquiring another vehicle).


Does that help?

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It makes almost no sense to me to take an asset you theoretically own (or have equity in), in a current car, and trade it in as a cap cost reduction (which is what its called on a lease, instead of a down payment). At the end of the lease, you would neither be able to buy the car you have (under current rules anyway) NOR have the asset (car) you previously had.

 

[sloth]

Leasing X car is the same as leasing Y car, from a money point of view. If you put money down on a lease, it goes toward paying off the lease fee. You can make the monthly payment whatever you want to on a lease, by putting more money down, but it doesnt change how much you are paying overall.

I use to use this example a lot, to try to help people understand what I just said above. Here is a post I made previously here explaining Leasing, from this thread:

Returning lease but lease balance is greater than Vehicle Value and Tesla is charging the difference, does it make sense?

hi guys, I am returning my model 3 lease next month and getting a new model Y. but after getting my early lease termination quote, it’s charging the difference between Adjusted lease balance and Vehicle Value. I believe the $26,400 vehicle value on 2019 model 3 makes no sense, should I call...

teslamotorsclub.com

=================================



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It makes almost no sense to me to take an asset you theoretically own (or have equity in), in a current car, and trade it in as a cap cost reduction (which is what its called on a lease, instead of a down payment). At the end of the lease, you would neither be able to buy the car you have (under current rules anyway) NOR have the asset (car) you previously had.

Ok so a lease is not a good idea then. Is the financing apr advertised on Tesla's website the lowest they offer?

 

[jjrandorin]

Ok so a lease is not a good idea then. Is the financing apr advertised on Tesla's website the lowest they offer?

I have no idea, but just like with any loan, I would suggest shopping around for financing.

 

[exfed2001]

Ok so a lease is not a good idea then. Is the financing apr advertised on Tesla's website the lowest they offer?

Whether it is a good idea to lease is dependent on your circumstances.

One thing you DO NOT want to do is put a down payment or trade towards something you will not own.