TCO & Lease vs Loan Cost Spreadsheet

[davesm]

As promised, here is the link to the spreadsheet I made to calculate the total cost of ownership of a Tesla Model S and to compare leasing vs. loaning.

First, some caveats. I cannot guarantee that any of the numbers or calculations on this spreadsheet are or will remain correct, and please do not rely on it to know how much you'll actually pay for a Tesla!

That said, as of the time I made it, the outputs of the spreadsheet do match what I was quoted from Tesla, and the numbers I saw on the Tesla website. And, BTW, if you just want a quick answer of whether to lease or buy and take a loan, if you plan to replace the car in 3 years it is much better to lease (even with the guaranteed buyback from the loan), and if you plan to keep the car, it's much better to buy and loan. And, BTW, for buying the car, with the low loan rates currently being offered (as well as the guaranteed buyback offer), I personally think it would always be better to take a loan as opposed to paying cash up front...

Here's the link: Tesla TCO lend vs lease - Google Sheets

This is what I made it to do that I did not see on the Tesla website:
1) Includes sales tax in the initial price of the car (after you input your state sales tax %)
2) Makes it easier to calculate a realistic amount for annual gas savings
3) Calculates lease and loan payments before and after tax
4) Calculates the total cost of ownership of both leasing and lending after both 3 years (returning the car) and 5 years (keeping the car)

• Takes into account your discount rate, or cost of money so that laying out more money up-front for a loan 'costs' more because you otherwise could have invested that money or earned interest on it
• Takes into account any additional cost to insure a Tesla vs. another car
• Takes into account additional accessories that may be needed for a Tesla vs. another car (e.g. chargers, electrician, console in car)

A few notes:
1) My goal was to compare a Tesla vs. another car, so did not include costs that would be common to all cars (e.g. garage or parking costs)
2) Re: maintenance, even though a Telsa costs less for regular maintenance, it costs more for minor repairs, so I left this out
3) The referral discount has a different effect on lease payments compared to simply getting options that cost $1K less, so if you include a referral discount, the resulting lease prices will not be replicated on the Tesla website (but were confirmed to me by Tesla finance).
4) The loan rates quoted to me were different from the ones on the Tesla website and I'm sure change all the time
5) I did not make it editable on google sheets since if multiple people were using at the same time, it would mess up all of their calculations!

How to use:
1) Download the spreadsheet into excel
2) Select which options you have in 'Column C' (1 for yes, 0 or blank for no), which should match the "Cash Price" on the Tesla website
3) Input your numbers for state tax, fees, loan, lease and usage options in column 'G'
4) The results will show up in rows 34 thru 44, hopefully with self explanatory labels!

There are possibly mistakes in the calculations, and almost definitely assumptions that others would make differently, so please leave in this thread any errors or changes you'd make (though I unfortunately can't guarantee that I'll be able to maintain it, I'll try to, at least at first!)

Hope this is helpful to folks, and again, here's the link:
Tesla TCO lend vs lease - Google Sheets

 

[ChadFeldheimer]

Nicely done!

For comparing the cost of ownership at 3 years, the loan looks much better if one plugs in the lease residual (backing out the $7500 federal tax credit) instead of the resale value guarantee. Presumably, the bank and/or Tesla are reasonably confident in the projected value implied by the lease residual.

I was happy to use the lease to "lock in" the trade-in value 3 years out.

 

[dgpcolorado]

Very interesting and easy to customize for individual circumstances. I downloaded it and used OpenOffice to open a copy to play with.

 

[ahurst]

Thank you

 

[davesm]

For comparing the cost of ownership at 3 years, the loan looks much better if one plugs in the lease residual (backing out the $7500 federal tax credit) instead of the resale value guarantee. Presumably, the bank and/or Tesla are reasonably confident in the projected value implied by the lease residual.

Yes - for the $85K 70D modeled in the spreadsheet, if Tesla and/or the bank owns the car and you want to buy it at the end of the 3-year lease, it will cost you $54,910 to buy it, but if you own the car, and want to sell it back to Tesla after 3 years, the guaranteed buyback value is only $41,800 (of course - the $7500 tax credit plays into this, since in the case of having bought the car you will presumably have gotten the tax credit, and if you add the $7500 to the $41,800 you get back for the car, it's $49,300).

- - - Updated - - -

FYI: I just found and fixed a bug in that the loan buyback value wasn't being calculated correctly (it was leaving out the value of all wheel drive and range upgrades). The current version should have this right...

 

[ChadFeldheimer]

FYI: I just found and fixed a bug in that the loan buyback value wasn't being calculated correctly (it was leaving out the value of all wheel drive and range upgrades). The current version should have this right...

Per my sales advisor, the all wheel drive and range upgrades contribute 43% (not 50%) to the RVG.

Anyone taking away that it's cheaper to lease over 3 years should note that it's only cheaper if the car ends up being worth no more than the RVG at 3 years. If, on the other hand, you think the lease residual will be a more accurate valuation (Tesla and/or the bank certainly think so!), then it is cheaper to take a loan. This result is intuitive when you consider that the lease carries a higher interest rate, you're borrowing more money, and you have extra fees (lease acquisition + disposition fees) - with these factors being potentially offset by lower sales tax, depending on your state.

 

[FlatSix911]

Well done!
I checked my Tesla sale invoice and I think the sales tax should be applied to D23, not D21. Hope this helps.

 

[davesm]

Per my sales advisor, the all wheel drive and range upgrades contribute 43% (not 50%) to the RVG.

Thanks - I made that change.

Anyone taking away that it's cheaper to lease over 3 years should note that it's only cheaper if the car ends up being worth no more than the RVG at 3 years. If, on the other hand, you think the lease residual will be a more accurate valuation (Tesla and/or the bank certainly think so!), then it is cheaper to take a loan. This result is intuitive when you consider that the lease carries a higher interest rate, you're borrowing more money, and you have extra fees (lease acquisition + disposition fees) - with these factors being potentially offset by lower sales tax, depending on your state.

Yes - if you think you can sell the car for 55%+ of its new price (before tax and incentives) after 3 years, then you would do better buying the car and selling it for that price after 3 years as opposed to leasing it (e.g. in the $85K example, if you can sell it for more than $46.5K, as opposed to the RVG price of $41,450).

 

[davesm]

I checked my Tesla sale invoice and I think the sales tax should be applied to D23, not D21. Hope this helps.

Thanks. I just made that that change.

 

[racerx43]

Nicely done!

 

[Wknapp0924]

Great spreadsheet. It was exactly the same as the offer sheet from Tesla.


After using your tool I pulled the trigger on an inventory car, but decided to purchase instead of lease because of the savings after 5 years. Thanks so much!