Tesla specific lease v buy

[GSBJackson]

As a current BMW owner looking to convert, I have leased and purchased BMW’s over the last 25 years. From that experience, I have learned that an “out of warranty” BMW can cost $2k+ per year to maintain (on top of normal wear, $125 oil changes, tires, $300 detailing, etc.). For that reason, and because I get bored with the lack of new features, I have leaned toward leasing BMWs.

Venturing into the world of Tesla, OTA updates will likely quench my boredom from new features. However, the lack of history on post warranty maintenance costs is concerning, or not knowing the trade-in value of a 4 year old Model 3, is making me lean towards leasing. Knowing if I like the BMW, I could always keep it post-lease (not financially smart I know, but comforting). With a Model 3, there is no such option to retain the car. This makes me lean toward purchasing.

Without the historical (lease v. buy) financial debate, are there any other aspects I should consider specific to Tesla’s? Again, not looking for generic lease v. buy that would apply to any car. I’m specifically seeking Tesla related considerations.

Thanks in advance for your thoughts...

 

[Ken-E]

I can totally relate!

I too have been driving BMW's - always on lease, and always sending them back at the end of the 4 year term, knowing full well that keeping the car post warranty is risky / expensive. My 1st Tesla M3 Performance is being delivered next week, and I decided to buy it.

2 reasons.

1 - The lease has no RV / Buyback option - I am forced to return the Tesla at the end of term if I lease it (at least that how it's structured in Canada).
2 - Seeing how easily these cars seems to sell on the second hand market, how they maintain their value, and how few options you have to select when ordering... it makes buying feel low risk. If I wanted to sell and flip into a new / different model in a year or two from now, it seems pretty easy to do so. If I choose to keep it beyond the 4 years, I'm free to make that decision sometime before 2024

 

[dmurphy]

Paging @jjrandorin : Leasemeister!

 

[Michelle_eriw]

The earliest Model 3's sold was only three years and two months ago, so none are out of warranty yet. And they didn't start leasing the Model 3 until April 2019, so none of the leases have expired yet. So there really aren't any data to support any answer to your question.

 

[jjrandorin]

Paging @jjrandorin : Leasemeister!

Hi @dmurphy !

(lol)

To OP, as far as "specific to Tesla" (and reading the thread a bit more it appears that @Ken-E covered this already but)

1. You can not currently buy the model 3 at the end of the lease term. It must be returned to tesla. That might change, but currently, if you lease a tesla model 3, you are guaranteeing that you have to return it at lease end, unlike BMW (and virtually any other lease agreement from a mainline brand) where you can purchase it at the end of the lease.

2. Tesla RVs in the lease calculation are not subsidized by tesla, unlike BMW leases which tend to have the RV subsidized.

3. Teslas model 3s are CURRENTLY holding their value VERY well. The ACTUAL residual value is in the 60s, unlike for example a BMW 3 series which normally has a RV set by BMW in the low 60s but in actuality at lease end is closer to 50-55% for your typical 36 month 10k a year lease.

4. For the same payment that you will pay on a tesla lease, you can lease a BMW with a higher MSRP (generally).

5. If you suffer from FOMO (like I do), tesla tends to scratch that itch because the car gets feature OTA updates. I have not yet had an issue where I was sad that "my car doesnt do that", and I bought my model 3 in Dec of 2018. My car does everything a model 3 bought right now does. My wifes 2019 X3, however, will not get android auto.. only the new 2021 bmws will. Annoying to me, but its how BMW does it.. not how tesla does it (at least until your MCU cant handle the updates, kind of like an old iPhone).

The TL ; DR version is, if you are worried about battery tech advancing and that might bother you, maybe you should lease... but the leases are not as favorable as other brands on a payment for MSRP basis, so your payment will be higher than on a BMW / Merc with the equivalent MSRP, and you cant buy it at the end.

I (serial BMW leaser) chose to buy my model 3 in 2018, and am still as happy with it as when I made the decision in 2018.

 

[GSBJackson]

I bought my model 3 in Dec of 2018. My car does everything a model 3 bought right now does.

Love that line...!

Okay, so far, two votes “buy” for a number of legit reasons. I guess we will all experience the “post warranty” period together! I just hope, unlike other technologies (iPhone, TV’s, etc), the Model 3 retains a reasonable resale value after warranty.

I’m in no rush with 3 months left on my BMW lease. Although I doubt “Battery Day” will have much of an impact, I will likely place my order late September/early October just to see what’s coming.

Thanks for sharing your thoughts as former BMW owners.

 

[dmurphy]

Love that line...!

Okay, so far, two votes “buy” for a number of legit reasons. I guess we will all experience the “post warranty” period together! I just hope, unlike other technologies (iPhone, TV’s, etc), the Model 3 retains a reasonable resale value after warranty.

I’m in no rush with 3 months left on my BMW lease. Although I doubt “Battery Day” will have much of an impact, I will likely place my order late September/early October just to see what’s coming.

Thanks for sharing your thoughts as former BMW owners.

He ain’t lyin’!!

Former Cadillac owner here and I’m still in LOVE with my Model 3. I’ve never ever driven a car that’s *better* on day 2. Seriously - think about that. Ever other car you’ve ever had - its best day is the day you drive it home. My Model 3 is a year and a half old, and I can’t even remember all the things it does now, that it didn’t do the day I bought it.

Just a fantastic vehicle all around.

 

[UncertainTimes]

I was also a serial BMW leaser and bought my 2020 Performance. Tesla's lease numbers are terrible and I got tired of wasting money on leasing and having to re-up every 3 years. Nothing really exciting from BMW coming up even the new M3/M4. Pretty much same car horrible grille. Maybe if BMW steps up their EV game I’ll go back.

 

[jjrandorin]

OP, one more thing.. if you are interested in the driving experience, there is a (now older) thread from a user here who asked how BMW drivers liked the transition, and it got great feedback. That person now not only has a model 3P, but has solar and powerwalls to go along with it D).

It was a great thread, with lots of BMW drivers who chimed in. Im going to pull a @dmurphy here (rofl, just teasin buddy lol) and page @destructure00 to see if he can link to his thread from back in the day that had all that great feedback in it on the switch.

 

[jjrandorin]

So, decided to do my own legwork on this one and pull up the thread I mentioned in my last post.

@GSBJackson this thread is older but has a ton of feedback that you are likely looking for:

Feedback from BMW or other premium brand converts?

One other note i will make on this. I believe BMW specifically has been hardest hit by Tesla. A lot of BMW owners bought them for "the driving experience", especially 3 series. While tesla lacks in the luxury deparment (quite a bit ), they nailed the driving experience.

BMW is getting its proverbial lunch handed to them in this market segment (4 door performance sedan), a market segment they dominated. There are a lot (and I mean a LOT) of people here who come from years of BMW ownership specifically. Other brands too, of course, but being a person who drove only BMWs for around 15-16 years or so prior to this, it stands out to me.

Enjoy reading through that thread, even though its older, its still relevant imo (everything except pricing anyway, if there is any of that in there).

 

[destructure00]

So, decided to do my own legwork on this one and pull up the thread I mentioned in my last post.

@GSBJackson this thread is older but has a ton of feedback that you are likely looking for:

Feedback from BMW or other premium brand converts?

One other note i will make on this. I believe BMW specifically has been hardest hit by Tesla. A lot of BMW owners bought them for "the driving experience", especially 3 series. While tesla lacks in the luxury deparment (quite a bit ), they nailed the driving experience.

BMW is getting its proverbial lunch handed to them in this market segment (4 door performance sedan), a market segment they dominated. There are a lot (and I mean a LOT) of people here who come from years of BMW ownership specifically. Other brands too, of course, but being a person who drove only BMWs for around 15-16 years or so prior to this, it stands out to me.

Enjoy reading through that thread, even though its older, its still relevant imo (everything except pricing anyway, if there is any of that in there).

Well I came here to find that thread, but you beat me to it by a couple days. Just want to say 18 months later that I have not missed my BMW once, and still look forward to driving my Model 3 every day! Just keeps getting better.

 

[XeRoM3]

Well I came here to find that thread, but you beat me to it by a couple days. Just want to say 18 months later that I have not missed my BMW once, and still look forward to driving my Model 3 every day! Just keeps getting better.

This is comforting ... I've owned a BMW M3 for the entirety of my driving career and leaving my E92 M3 for the Tesla leap to an M3P.

 

[jjrandorin]

This is comforting ... I've owned a BMW M3 for the entirety of my driving career and leaving my E92 M3 for the Tesla leap to an M3P.

The E92 M3 is a really good one. Most BMW people really like that one. If thats where you are coming from, you definitely want the performance model 3.

 

[UncertainTimes]

Came from a 6MT F80 myself

 

[Jim R]

No experience leasing - I have always bought. Now I am considering a lease, and one of my concerns is the possible range improvements that might come with new battery technology. How will a 4 year old Tesla compare with a new one in 2024? If range goes up considerably, selling might be harder.

A second concern is that I might love the car so much I put mega miles on it, well beyond the lease miles allotment.

 

[jjrandorin]

No experience leasing - I have always bought. Now I am considering a lease, and one of my concerns is the possible range improvements that might come with new battery technology. How will a 4 year old Tesla compare with a new one in 2024? If range goes up considerably, selling might be harder.

A second concern is that I might love the car so much I put mega miles on it, well beyond the lease miles allotment.

Both are possible. I still sometimes volunteer to go to the store just to have an excuse to drive my car, especially with the fact that I am driving MUCH less due to covid.

 

[bruce4000]

With battery day completed, wondering about lease vs buy. New battery improvements are impressive but no mention if / when would be applied to model Y. In the past I have always bought new and held for 10 or 15 years but ice cars don’t change much.

 

[jaywar]

We leased our last two Subarus. Great cars but we sold one lease to CarMax (with 2 years left) and trading in the other to Tesla (18 months left) and picking up a M3 LR. We are doing a 3 year lease and hoping at the end of the lease the Cybertruck has been out for a good year. We cant wait to pickup the M3 on Saturday!

 

[Gasaraki]

So, decided to do my own legwork on this one and pull up the thread I mentioned in my last post.

@GSBJackson this thread is older but has a ton of feedback that you are likely looking for:

Feedback from BMW or other premium brand converts?

One other note i will make on this. I believe BMW specifically has been hardest hit by Tesla. A lot of BMW owners bought them for "the driving experience", especially 3 series. While tesla lacks in the luxury deparment (quite a bit ), they nailed the driving experience.

BMW is getting its proverbial lunch handed to them in this market segment (4 door performance sedan), a market segment they dominated. There are a lot (and I mean a LOT) of people here who come from years of BMW ownership specifically. Other brands too, of course, but being a person who drove only BMWs for around 15-16 years or so prior to this, it stands out to me.

Enjoy reading through that thread, even though its older, its still relevant imo (everything except pricing anyway, if there is any of that in there).

I came from WRXs, that's all I bought. My main criteria was AWD performance 4-door (or 5-door) sedan or hatch. Subaru was too slow to release a performance hydrid. Jumped on the Tesla. Probably never going back to ICE.