Tesla lease vs purchase

[Insureit1]

I have leased at least a dozen cars over the years. Everything from Lexus, BMW to Mercedes and even two Nissan Leafs for my business. Never put more than the first monthly payment down. I take delivery of the X this Saturday and have been approved for financing with Alliant. Just for kicks and to check on the leasing (as it it is MUCH easier as a business write off) I got a lease estimate from Tesla. I have to say it is perhaps the worst lease deal I have seen in 25 years of car buying. Like the OP it required over $14k up front and the monthly payment was higher than the 72 months at 1.49%. Not a chance I would put $14k up front on a lease. I hope the X is fantastic. My experience with several issue with my order has been far from a pleasant experience and Tesla corporate has been difficult to deal with. Some of the things Telsa does are going to have to change if they plan on selling 500k cars a year. I thought some Lexus dealers were a bit arrogant how they approached some customers but in my case Tesla was worse.....but that is for another thread.

 

[xav-]

Some cars like the leaf are great to lease. Those who bought new really got screwed especially at the beginning.

Tesla is pretty bad, that said those loaded S P90Ds demos with ludicrous at $1,150 a month with $7.5k drive off are a descent deal (for those who can afford this stuff).

 

[Scrith]

Wow, maybe something has changed...an unusually high up-front payment for a lease wasn't my experience at all a few months ago. It was about the same as any other lease I've done, as far as the initial cost was concerned (actually a bit higher, given that I had put a $5K deposit down, but it is a Tesla after all).

Honestly, if I had to guess, I would say Tesla is seeing fewer buyers for the X than they anticipated, and they want to be stuck with as few of them in 3 years as possible (when who-knows-what batter technology is available via their new battery plant).

 

[Insureit1]

Wow, maybe something has changed...an unusually high up-front payment for a lease wasn't my experience at all a few months ago. It was about the same as any other lease I've done, as far as the initial cost was concerned (actually a bit higher, given that I had put a $5K deposit down, but it is a Tesla after all).

Honestly, if I had to guess, I would say Tesla is seeing fewer buyers for the X than they anticipated, and they want to be stuck with as few of them in 3 years as possible (when who-knows-what batter technology is available via their new battery plant).

This is exactly why I was looking to lease. What does it say that Tesla is worried about residual values three years from now. I am rolling the dice and purchasing.

 

[Hitman007]

I have leased at least a dozen cars over the years. Everything from Lexus, BMW to Mercedes and even two Nissan Leafs for my business. Never put more than the first monthly payment down. I take delivery of the X this Saturday and have been approved for financing with Alliant. Just for kicks and to check on the leasing (as it it is MUCH easier as a business write off) I got a lease estimate from Tesla. I have to say it is perhaps the worst lease deal I have seen in 25 years of car buying. Like the OP it required over $14k up front and the monthly payment was higher than the 72 months at 1.49%. Not a chance I would put $14k up front on a lease. I hope the X is fantastic. My experience with several issue with my order has been far from a pleasant experience and Tesla corporate has been difficult to deal with. Some of the things Telsa does are going to have to change if they plan on selling 500k cars a year. I thought some Lexus dealers were a bit arrogant how they approached some customers but in my case Tesla was worse.....but that is for another thread.

Why did you say a lease is much easier to write off?

 

[llngoc]

Why did you say a lease is much easier to write off?

If you lease it under your business, it is just a simple expense.

 

[Hitman007]

If you lease it under your business, it is just a simple expense.

I alway buy my business cars because of mileage. My CPA does all the calculations so I have never compared the two but it makes sense that a lease is just like rent. Do you get the $7500 tax credit when you lease since you are not buying the car? I think in a lease it's the lease company who buys and owns the car.

 

[xav-]

Wow, maybe something has changed...an unusually high up-front payment for a lease wasn't my experience at all a few months ago. It was about the same as any other lease I've done, as far as the initial cost was concerned (actually a bit higher, given that I had put a $5K deposit down, but it is a Tesla after all).

Honestly, if I had to guess, I would say Tesla is seeing fewer buyers for the X than they anticipated, and they want to be stuck with as few of them in 3 years as possible (when who-knows-what batter technology is available via their new battery plant).

Nothing has changed. You are in CA he is in GA. Tax on entire vehicle is due up front for him.

 

[Insureit1]

If you lease it under your business, it is just a simple expense.

Exactly. You can still deduct if a purchase but not as easy and deductions are limited and you could have to recapture some of the depreciation. Leasing is much simpler.

 

[llngoc]

I alway buy my business cars because of mileage. My CPA does all the calculations so I have never compared the two but it makes sense that a lease is just like rent. Do you get the $7500 tax credit when you lease since you are not buying the car? I think in a lease it's the lease company who buys and owns the car.

When the Tesla Leasing program first came out 2 years ago, the $7500 goes to the lease company and 6 months after that it was changed so it is going to the cap reduction. So you can say that it is a "better" deal now.

I think the other EV makers are doing the same with the Federal Tax Credit going into cap reduction and that's why there is some $100/mo lease for the Nissan Leaf.

 

[Kristine]

Now I am looking at buying an S60 and trying to decide whether to lease or buy with all the same confusion as everything I've read. In California so up to 10k in tax credit and rebates on a buy BUT the Tesla 3 is due to arrive in 12 Months of so and I'm afraid the S60 will not be as valuAble on resale (if I buy) because of mileage range similarity to the 3. (Though the S 60 can be upgraded to S75 range over the internet). Lease rate is like 4.6%. Buy is 1.99 for 36-84 months. I don't know what to do. Am talking to CPA to ask about deducting lease (have a business but not a "Inc" or any other legal business tax status). Bought a BMW last year and BMW did put my business name on the paperwork though. Who knows. Tax credit (small business under 100k per year) or lease Hmmm

 

[gmtom1]

I went with the 2-year Tesla lease for my X75 in September vs. a 7-year loan via Tesla finance. I only plan to keep the X for two years and the convenience of the turn in process vs. trade in or sale of my X outweighed the slightly higher additional cost.

The tax credit is factored into the lease payments, so you're still getting the same economics as buying, basically.

 

[rjdoc74]

Except that if you drive off the lot and total your tesla (which is very easy to do on a tesla since repairs are so expensive) you don't get the money you put down on your lease back. This is the reason you never put money down on the lease. I've leased over a dozen bmws over the years and I never even brought a check book to the dealer at car pick up.

I am it saying tesla lease is not right for you, but you need to know all the facts.

 

[jmanning]

If you are even thinking of keeping the car long term, I would out right buy....no worries about mileage, which you will have, and you can do what you want with it. Trust me you will drive more than you think....we all do. Forget about costs for a second, if you like the vehicle a great deal, buy. If not sure and want to get out in 3 years, or less for a fee, then lease.....

 

[jmanning]

Don't get tax credit if lease btw.

 

[rjdoc74]

Well you kinda do. Leasing bank applies it to as cap cost reduction. So your payments are lower. I leased a 2012 chevy volt with msrp of 46k for $350 per month plus tax and 0 drive off.

 

[essmd]

I am not a tax expert, but in my mind, the only reason to lease is if you have the ability to write-off the payments for tax benefits, as W-2 employee, 1099 recipient, or own your own business. However, since the MX qualifies for Sect 179 being over 6K lbs, there is also the "Hummer Loophole" which allows up to a $30K tax benefit plus accelerated depreciation.

The residual for Tesla leases are about 65% of orig price, so after 3 years chances are the resale will exceed the residual, making it worthwhile to purchase after the lease and sell or keep.

I may be way off on this, so feel welcome to correct my perspective... I may learn something.

 

[Dr Doom]

I am not a tax expert, but in my mind, the only reason to lease is if you have the ability to write-off the payments for tax benefits, as W-2 employee, 1099 recipient, or own your own business. However, since the MX qualifies for Sect 179 being over 6K lbs, there is also the "Hummer Loophole" which allows up to a $30K tax benefit plus accelerated depreciation.

The residual for Tesla leases are about 65% of orig price, so after 3 years chances are the resale will exceed the residual, making it worthwhile to purchase after the lease and sell or keep.

I may be way off on this, so feel welcome to correct my perspective... I may learn something.

how does the hummer loophole tax benefit help?
Like you can write off 30,000 if you buy the car?

 

[TJtv]

The residual for Tesla leases are about 65% of orig price, so after 3 years chances are the resale will exceed the residual, making it worthwhile to purchase after the lease and sell or keep.

I may be way off on this, so feel welcome to correct my perspective... I may learn something.

You are indeed WAY off base with this advice. The way tesla leases are structured to have the $7500 added to the residual value, they are NEVER financially worthwhile to buy out at the end of the lease.

 

[chillaban]

The residual for Tesla leases are about 65% of orig price, so after 3 years chances are the resale will exceed the residual, making it worthwhile to purchase after the lease and sell or keep.

More than 65% of original value after 3 years? I'm not sure what planet you're on... I just barely did better than that on a trade-in after 10 months and 17k miles.