Strongly considering a lease vs buy (MYP). Pros/Cons?

[danpass]

I’m strongly considering a two year lease. Pros / Cons?

I had leased way back and went way over miles. That mileage has been the case for years but since the world ended many of us work from home.

This means that mileage is no longer a factor.

Being able to let the car go at the end of the lease without any drama is actually a Pro for me (at this time)

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[Zer0Her0]

I leased both of my MY's. Don't like to keep cars past 3 years. And with such volatile price adjustments, I have many friends who are so underwater on the value vs loan payoff, it's not a position I envy...

 

[danpass]

I leased both of my MY's. Don't like to keep cars past 3 years. And with such volatile price adjustments, I have many friends who are so underwater on the value vs loan payoff, it's not a position I envy...

That was also in my thoughts, part of the ‘letting go without drama’ factor

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[ewoodrick]

I’m strongly considering a two year lease. Pros / Cons?

I had leased way back and went way over miles. That mileage has been the case for years but since the world ended many of us work from home.

This means that mileage is no longer a factor.

Being able to let the car go at the end of the lease without any drama is actually a Pro for me (at this time)

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Ask yourself the question, why would a dealer/manufacturer offer a lease. It's because they can make more money off the vehicle.

By default, a lease is (New Price - Anticipated sale price) / months + commercial interest + $$PROFIT$$.

A two-year lease is one of the most expensive ways to own a vehicle. All you are paying for is depreciation, the expensive phase.

There aren't any expectations of problems with technology in a Tesla anymore.

Unless you want to throw away money....

 

[Zer0Her0]

24 months, yea, definitely not a good decision but say an 18 month like Lucid's offer, yes...

It's not about any obsolete technology fears but rather when you go to sell it, the value is more often than not going to be underwater

 

[OCR1]

What is the reason you want to lease vs buy the car? It helps to know details, otherwise you will just get a bunch of random responses. If you own your own business and can write off the entire lease amount as an expense it’s much more financially attractive than if you can’t.

 

[BroncoAZ]

I posted this in another lease question thread this week:

I considered leasing until I ran the numbers. It appears that the residual value is crazy strong meaning the lease should be much cheaper. Our current lease on my wife’s Tacoma was $14,500 for 39 months and 39K miles, the Tesla with a similar capitalized cost shows a stronger residual value but that lease costs $6K more for 36 months and 30K miles.

I agree that the value may take a hit when a new model comes out, but Tesla doesn’t seem to do radical redesigns like other manufacturers. My Ford Lightning was an example of what to do to tank resale value, announcing shortly after release that a completely new platform would be released in a couple years. Glad I sold mine quickly, the 2 month residual value was over 100%.

 

[danpass]

That’s where my two year idea comes from, the Juniper coming out.

Any lease is just a long term rental. If the value goes up you don’t make anything.

But if the value tanks you don’t lose anything.

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[phxazcraig]

Keep in mind that for some cars, you only get the tax break, or a better tax break, on a lease. Tax breaks totally distort the economics of the game.

 

[jay1122]

There is only one reason why one would choose lease over purchase. You have money and you want to drive new cars every few years. Everything else does not matter much. Your monthly payment is the depreciation of the car. And it usually is very hefty. I love buying low mile off lease luxury vehicles. The 1st owner took the major hit. just whip out your calculator and calculate your lease payments. You will find it is pretty similar to purchase and sell. It just saves you the hassle.

 

[OCR1]

There is only one reason why one would choose lease over purchase. You have money and you want to drive new cars every few years. Everything else does not matter much. Your monthly payment is the depreciation of the car. And it usually is very hefty. I love buying low mile off lease luxury vehicles. The 1st owner took the major hit. just whip out your calculator and calculate your lease payments. You will find it is pretty similar to purchase and sell. It just saves you the hassle.

My experience is people who lease fall into one of three categories:

1) Business owners who can write of the entire lease amount against their income. If they are high earners this can save them as much as 50% of the cost of the lease on their taxes.

2) People who can afford it and just want a new car every three years.

3) People who can’t afford to finance a vehicle and are attracted to the lower lease payments.

People in #3 are driving cars they really can’t afford.

 

[danpass]

I’m still leaning toward the lease but more strongly considering creating an LLC to lease the vehicle. Will write off the MYP against Youtube review videos. Working from home makes using the MYP mainly for youtube a realistic scenario. Planned road trips, track days, etc.

I’d like to own but with prices in flux, and an imminent-ish Juniper release, the lease has the fewest question marks as there is no final value / sell / trade-in issue.

 

[ewoodrick]

I’m still leaning toward the lease but more strongly considering creating an LLC to lease the vehicle. Will write off the MYP against Youtube review videos. Working from home makes using the MYP mainly for youtube a realistic scenario. Planned road trips, track days, etc.

I’d like to own but with prices in flux, and an imminent-ish Juniper release, the lease has the fewest question marks as there is no final value / sell / trade-in issue.

Be careful with a LLC, it can mean a big increase for your insurance.

Juniper is not imminent, unless you call next year imminent.

 

[Zer0Her0]

No other cars out there are catching my eye...I just gravitate towards MXLR over and over again

But being in SC I am no longer allowed to lease a Tesla so looks like it's a short list of options

 

[elambo]

I also don't keep cars longer than three years, and I have no qualms about owning or "renting" so I take the lower monthly payments and invest the rest.
In my history I've gone after owning about half the time and leasing the other half. A couple cars depreciated faster than I could pay them off, and a couple of times I made a solid profit at the end of ownership. So my experiences have varied. This time around, with this car, the lease felt best.

 

[vindroid]

What does everyone think about these occasionally reported excessive use charges when returning leases?

 

[BroncoAZ]

What does everyone think about these occasionally reported excessive use charges when returning leases?

Seems like every company has some BS damage charges or similar when returning a lease. They want the nicest possible car to sell to the next buyer and expect you to pay for it. The only lease I got out of clean was a 2006 Honda Accord. The car had a tree branch fall on the fender and dent it, I had a lot lizard dealership guy repair it on the cheap. The person who inspected the car noted the poor repair, but told me there was a $1400 damage allowance and I wouldn’t have to pay anything additional. On a 2017 Subaru Outback that had a rear end accident I got charged an extra $2K for diminished value on the turn in. The repair was through a reputable body shop, but the accident showed up on carfax so the dealer said the car wouldn’t sell for full retail. My insurance company refused to reimburse the $2K, not that I can blame them a couple years after the claim.

 

[elambo]

What does everyone think about these occasionally reported excessive use charges when returning leases?

Every company allows a certain degree of "normal wear and tear" but the verbiage isn't fully defined, and each company views "normal" differently, as does each employee who takes in the lease (this is the one person whose opinion matters most).

I've never had a dealer red flag an item that I felt was undeserving. Tesla, however, has earned a reputation for being... let's say "quirky and inconsistent" when it comes to the condition of their vehicles, so it's anyone's guess what you'll get when you turn it back in.

 

[gregory.balan@]

I leased both of my MY's. Don't like to keep cars past 3 years. And with such volatile price adjustments, I have many friends who are so underwater on the value vs loan payoff, it's not a position I envy...

I agree. I am going to lease until 2035. This is when all cars have to be electric in the states. When this happens I assume price cuts, better battery production and longevity, in addition to possible more teslas. Buying you end up over/under and not worth it right now.

 

[danpass]

still pondering the LLC route though perhaps it would be an S corp

going to start a new thread on that