I leased a Tesla 2022 model y performance in March 2022, now I want to return it early, the vehicle has no accidents and damages, the kilometers are 17100, I just clicked early termination on my mobile app lease, and then the estimated price given is $0.00 final payment, I saw in the forum that many people also have a final payment of $0.00 and there is no problem, but after the final quotation, it suddenly becomes that I need to pay nearly $15,000 The final payment, I don't know what to do now, I think Tesla miscalculated the quotation? Can anyone help me and tell me what to do next?
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Tesla early termination of lease issue
- Thread starter Letian He
- Start date
I leased a Tesla 2022 model y performance in March 2022, now I want to return it early, the vehicle has no accidents and damages, the kilometers are 17100, I just clicked early termination on my mobile app lease, and then the estimated price given is $0.00 final payment, I saw in the forum that many people also have a final payment of $0.00 and there is no problem, but after the final quotation, it suddenly becomes that I need to pay nearly $15,000 The final payment, I don't know what to do now, I think Tesla miscalculated the quotation? Can anyone help me and tell me what to do next?
You owe the balance of your lease payments. There is no way (none, zip, zero) you are returning a leased car the first year you leased it without paying a bunch of money.
its all right there on the doc. the gross capitalized cost is $97,080 (this is the cost of the car including all fees etc). You have paid $8,737.20. The vehicle value at the end of the lease is calculated as 73,400 (all this should have been on the original lease agreement as well).
$97,080 (cost of car) - 73,400 (value of car at end) = $23,680 (amount you will need to pay over the lease term). $23,680 (amount you owe on the lease) - $8,737.20 = $14,942.79
It all there, all proper, and there is no way you will be returning this car with a zero cost.
"What do you do?" you either carry the car to the lease term that you agreed to in your lease agreement, or get someone to assume your lease, or pay the $14,942.79 to get out of it. There is absolutely zero "issue" here if "issue" means "tesla made a mistake here.
Since the OP is in Canada, and that thread is in the UK subforum, I didnt even look at it but its probably not applicable to this OP (especially since the thread was posted in September, and used car values have gone down since then).
Thank you, but why the first quote he gave me was $0. I have another question, because Tesla can only be transferred once. My car has already been transferred once. Can I apply for a second transfer?
I dont work for tesla, thats a question for them. No idea about any workflow with paperwork they sent you that says zero on it, but all those numbers (your capitalized cost, the residual, etc) should be on that contract.
Snow Drift
[Off-Road Assist] Activated
I just returned a leased car early and paid $0 to Tesla. However, you will see that from the 1st quote to the 2nd, Tesla has drastically reduced the resale value from $91k to $73k. That is why you now owe them money. The used car market has collapsed.
If you think it is an error, request a new quote and see if it is any better.
If you think it is an error, request a new quote and see if it is any better.
Snow Drift
[Off-Road Assist] Activated
For the US, you can just cancel the quote in the app, and then go through the app to request a new quote. I did that many times over the months to make sure it was still $0.
Based on my experience with leasing, I think calculation is correct. What I would do is dig deeper into "Residual Early termination cost" and try to understand a bit better.
To explain the calculations, take a look in your lease agreement for the following parameters,
MSRP
Residual value
Lease term
Number of miles or kms
a) Divide (Residual Value/MSRP)*100
b) Monthly %depreciation will be the (value from a) /(Lease Term).
c) Do the following (MSRP)* (value from b)*(Number of months you have paid so far)/100
Not sure how Canadian leases are written however there might be a row saying (Base Monthly payment), if that is there you might be able to skip a), b) and c). Then use the following calculation - MSRP - (Base Monthly Payment* number of months you paid so far) = Value of the car you agreed with Tesla's bank which will be $91400 most likely
Now the "Residual Early termination cost) might include the following mileage overage, additional fees agreed with Tesla on termination, the agreement should have this + any taxes etc.
Now how everyone is getting a $0.00 value, it all depends on their lease terms i.e. MSRP, interest rate on the lease , mileage etc, as Tesla has increased their prices over time, since they can get more for the car today vs what it was in say November 2020, the price in US has gone up by over $15K. Again Tesla's lease is Captive also but I am guessing they are forgiving the amount owed as the current value is much higher and they do not want to pass the profit to the customer, which is fair as you agreed to that in your lease terms. This all blows out when your is declared a Total Loss. Also Tesla does not let you buy leases in US
Hopefully this helps you understand what is going on
To explain the calculations, take a look in your lease agreement for the following parameters,
MSRP
Residual value
Lease term
Number of miles or kms
a) Divide (Residual Value/MSRP)*100
b) Monthly %depreciation will be the (value from a) /(Lease Term).
c) Do the following (MSRP)* (value from b)*(Number of months you have paid so far)/100
Not sure how Canadian leases are written however there might be a row saying (Base Monthly payment), if that is there you might be able to skip a), b) and c). Then use the following calculation - MSRP - (Base Monthly Payment* number of months you paid so far) = Value of the car you agreed with Tesla's bank which will be $91400 most likely
Now the "Residual Early termination cost) might include the following mileage overage, additional fees agreed with Tesla on termination, the agreement should have this + any taxes etc.
Now how everyone is getting a $0.00 value, it all depends on their lease terms i.e. MSRP, interest rate on the lease , mileage etc, as Tesla has increased their prices over time, since they can get more for the car today vs what it was in say November 2020, the price in US has gone up by over $15K. Again Tesla's lease is Captive also but I am guessing they are forgiving the amount owed as the current value is much higher and they do not want to pass the profit to the customer, which is fair as you agreed to that in your lease terms. This all blows out when your is declared a Total Loss. Also Tesla does not let you buy leases in US
Hopefully this helps you understand what is going on
Judging from this link and the documents, the lease buyout should be comparing the Adjusted Lease Balance to the Current Market Value Ending Your Lease Early | Tesla Support
Three or more months left until your lease end date: Pay the difference between your adjusted lease balance and the current market value of your vehicle.”
Adjusted Lease Balance = Gross Cost - Payments Made = 97,080 - 8737 = 88,343
(It can also be described as = Residual Value + Remaining Payments)
Looks to me like Snow Drift is right, as the market value for the car was higher than the ALB in early November (and Tesla took the rest as profit with a “Residual Early Termination Fee”). But then later in the month, the price unfortunately for OP dropped hard with the market
The only way you would have maybe not had to pay the remaining lease balance is if you had positive equity in the car before the used car market dropped. Sometimes you may even get money back if the used car is more than a new one. This was common before when the used market was doing good. But with the current condition , you may be lucky to leasebust your car but it will be hard with the recent price drop. So you will be upside down a lot. Better to just finish the lease.
Zer0Her0
Member
I was considering the same thing when my lease turn in was only $1222, but now it's $13K given the slash in prices...guess I'm keeping it for the rest of the lease time...
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