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Tesla Dealership question [Correction: Tesla does not have dealerships, it sells direct]
- Thread starter Solobaric
- Start date
Wouldn't that be something you'd do with the same manufacturer? Is this a leased Tesla?
Tesla doesn't resell used cars btw unlike other dealerships who might keep the car on their lot. They go directly to auction, the current geo area and make, year, mileage, condition and trim will determine that week what they will quote you. I just don't see any negotiating with Tesla. Didn't happen with my husband's trade-in. They came in low and suggested to him that he go to CarMaxx which he did. They came in with a $2k higher price and at that time Tesla did match it. Not sure what their policy is currently.
srs5694
Active Member
You're correct, at least in my (limited) experience. I leased a 2017 Chevy Volt starting in 2016 and replaced it with a Tesla Model 3 (which I purchased) this year. I turned the Volt in to the Chevy dealership after taking delivery of my Model 3. @Solobaric should check the details of his/her lease agreement to figure out when the last payment will be due; and with the lender (or Tesla, if the Model 3 is to be a lease) to figure out what the payment schedule will be on the new loan or lease. This may be affected by things like an early lease turn-in, if that's done. Also, note that you may get hit by fees for excessive wear, excessive mileage, etc., on the lease, so you may owe more than you expect at the end of the lease.
In theory, Tesla should refuse to take delivery of a leased car as a trade-in, since you don't own it and therefore don't have the legal right to sell it. In practice, who knows? There are enough reports of Tesla screw-ups on deliveries, titles, etc., that I could believe a mistake being made and creating a ton of headaches as a result.
I can answer the question in a general sense as I am very familiar with leasing as I have mentioned in other places.
Its true that, for most car leases, you turn them in to the car maker you leased it from. That is called a lease turn in. Most leases also have an "option to purchase" attached to them. This is the price to buy the car outright. It normally consists of the balance of your lease payments left, whatever residual (balance due on the car after the lease) is left, and any lease end charges / fees assessed.
Depending on what the residual amount is set at, and what the car is actually worth on the open market, its "possible" for the car to be worth more than the residual amount left on it. As a fictitious example, lets say the residual amount (amount balance due to purchase car at end of lease) is 20k. Lets say your payment is 500 a month, and you have 2 payments left. Lets say lease end charges will be 500 (using round numbers for ease of fictitious calculations). Lets say that the manufacturer says this is all you owe, so the full buyout price is 21.5k.
If this car is "worth" (on the open market), say 23k, you have a situation where the car is worth more than what is owed. In such a case, you can just give it back to the dealer (and they will realize this difference), or you can SELL the car to the dealer, or some other dealer. They pay off the car, and pay you any difference in value left.
So, you can either do a lease turn in to a dealer of the car manufacturer, or you can SELL the car to anyone, for any price you want / can get, and pay off the balance on the car and realize any money savings.
Saying all that, it almost NEVER works the way I detailed above. The "normal" way it works, is the car is worth less than its residual, so if you sell it to someone there is a balance due (if you didnt put a large down payment down on a lease which you should never do). If its the same manufacturer that your car is, sometimes there are special lease turn in prices the dealer gets to absorb this negative equity.
There is NEVER a special buy out price for a different car manufacturer (say selling a leased BMW to mercedes or porsche). Its almost always a losing money proposition to sell a leased car to a different car manufacturer. There is almost always negative equity in that transaction. Even if one does not see it (regular car purchases), its normally buried in the price of the NEW car.
So, its normally not a good idea to try to sell a leased car to a dealership that is not the manufacturer of the car. It CAN be sometimes a decent deal to sell the car back to a dealer for the SAME manufacturer, if the "stars align" properly. Takes some calculations, and knowledge of how it works.
Saying ALL that, its fairly clear to me that this OP does not understand how tesla works at all. First, tesla does not have any dealerships as we all know. Second, tesla is not going to pay top dollar for any lease purchase. There will almost certainly be negative equity, unless this OP is used to putting large money down on his leases. That negative equity would be transfered to the tesla.
There is almost NEVER a good excuse for absorbing negative equity near the end of a lease, when one can simply pay the last couple of payments and turn the car in. This OP will almost assuredly not make money selling the lease return to tesla, as tesla has no way to bury the costs in a new car the way traditional dealerships do (with back end factory to dealer cash, or hiding it in other fees, warranty extensions, leather treatments, window etchings, etc charges).
Back to OP.
OP, if you are getting a tesla model 3, you need to cancel your plan to "negotiate the sale price during purchase" as tesla simply doesnt operate that way. You should be turning the car into whatever manufacturer you bought from, and be done with that car, and then buy / lease your tesla. You wont be "negotiating" on a tesla at a "dealership".
Uncle Paul
Well-Known Member
Many dealerships will offer early lease turn in, but only if you are buying another car from them. They can either handle the financial issues internally, or often the manufacturer is offering this early turn in as an incentive. Part of their "move the iron" strategy.
Tesla is in a different situation, since you did not lease your car from them.
Believe your situation would be best resolved by stopping by your friendly local Tesla location and speaking with a sales guy. They will give you all your options.
Right now, new Tesla are in short supply, as most of the production is going to Europe/Asia. They might be able to match you up with an inventory vehicle, and do the transaction quickly.
Tesla is in a different situation, since you did not lease your car from them.
Believe your situation would be best resolved by stopping by your friendly local Tesla location and speaking with a sales guy. They will give you all your options.
Right now, new Tesla are in short supply, as most of the production is going to Europe/Asia. They might be able to match you up with an inventory vehicle, and do the transaction quickly.
I havent tried, but I am fairly certain he could, in fact sell that leased car to tesla if he wanted to, and have any negative balance added to the new tesla as long as he qualifies for the loan at that amount. Its not any different than selling a car to tesla with a negative balance (which in effect is what would be happening).
It doesnt make sense to do it, but I doubt they will tell him to "pound sand". You cant lease return it but I am sure they would purchase it.. they would contact the lease holder, ask for payoff, and then tell him he would need to either pay the difference in cash, or add it to the loan, just like every other car transaction. Would not make sense but almost assuredly can be done.
eladts
Member
When I did my trade in, Tesla wanted a photo of my the title before giving me a quote and handing over the actual paper when I turned the car in. The title is there exactly for this purpose - so that you can only sell a car if you legally own it. You have to be really clueless to buy a car without the title, so it is very unlikely Tesla would do that. A leased car is not yours, it is really kind of a long-tem rental. Do you think that if you rented a car from Hertz and tried to return it to Avis they will accept it?
Thanks for all the responses guys. Think we got a bit off the rails here. Lol. I apologize for calling it a dealership, should have said showroom. The question was more about the timing of the trade in and when Tesla would take my car, not about my lease. And for everyone's reference, most lease vehicles still have a payoff amount just like any other vehicle. I have traded in plenty of leased vehicles to other dealerships. With my discounts and super low mileage I usually have positive equity left in my leases.
If, say, you have an expiring tax credit coming up ... and the sale avoids lease-end fees ... and would avoid the lease-end inspection, where you know tires are below 4/32” ... and, you know the vehicle’s book value is about at peak value ....
Hypothetically, of course
ps - in the 6 months since selling, my previous car’s dropped $6k in book value. I won. Hard.
