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The wacky world of Tesla leasing early termination pricing.

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Darthlaw

Darthlaw

Member
Nov 30, 2020
19
6
UK
#1
In August I had the pleasure of starting with a new employer who unfortunately for me enforced their company car policy, meaning I've now inherited a Diesel VW golf from the last guy, which is not due for changing until April 2025.

That now leaves my Model 3 LR redundant until the end of the personal contract hire agreement in December 2024. As I had a Kia previously on a similar agreement in the past, I managed to make arrangements to pay 50% of the remaining payments and hand it back early. No big deal I thought.

So, for all you Rachel Rileys out there, if you can figure out how they calculate early termination fee's, I'll be mightily impressed. For info, my monthly payment is approx £595 inc VAT

August - 15 payments remaining
Settlement £8039 (equal to 13.5 payments)

September - 14 Payments remaining
Settlement £7020 (equal to 11.8 payments)

October - 13 Payments remaining
Settlement £7080 (equal to 11.9 payments)

and now (drum roll.....)

November - 12 Payments remaining
Settlement £10,517 (equal to 17.7 payments!!!!)

Answers on a postcard as to how Tesla calculate their termination fee and where the logic is for it to be higher than what they would receive if I let the car rot on the driveway vs them putting it on the market a year early!
 
#4
ACarneiro said:
I very much suspect it signals that they would rather have it rot on your driveway than it showing in Inventory on their books…
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Odd, isn't it or has the market bombed that much?

Have an asset 12 months earlier, which they can no doubt sell at a higher price or price the settlement high enough that it stays with me and they have a 4yr old tesla to sell instead of a three year old one.
 
#5
Durzel said:
I'm probably being seriously dumb, but how can the settlement figure change? I thought that was known & fixed at the policy inception?
Click to expand...
Not with a lease.

Darthlaw said:
Answers on a postcard as to how Tesla calculate their termination fee and where the logic is for it to be higher than what they would receive if I let the car rot on the driveway vs them putting it on the market a year early!
Click to expand...
I'd imagine they are basing it on current trade-in price and you are being asked to pay any shortfall, and it is depreciating faster than your payments.
 
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#6
MrT3 said:
I'd imagine they are basing it on current trade-in price and you are being asked to pay any shortfall, and it is depreciating faster than your payments.
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You'd imagine theyre not loopy enough to suggest a figure higher than the outstanding balance though.

Clearly not, or very much a 'computer says no' moment.
 
#8
With the early termination fees & BIK wouldn't you be better not having the golf and driving your model 3? Your employer can park it in their car park till 2025 or you only take the car up once your lease goes back in a year.

Unless it's a PHEV I can't imagine your better off in any scenario paying that early termination fee and then having the BIK on top but I may be wrong.
 
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#9
Also as said it probably points to the market and them not wanting the car back to go into inventory. When the used market was the other way I terminated a PCH early with no penalty because they were happy to get the car back in and sell at an inflated value.

It is crazy they are asking for more than the outstanding lease months, you'd think it would be capped as a maximum essentially paying out the contract. You'd have to think it's an error. Mind boggling.
 
#10
Well, you are asking to break the contract. Is it outrageous that the cost to do this is entirely up to them?

I would agree though that the settlement figures are ridiculous on their face, given you'd be paying more in one lump sum than if you just held on to the car and never drove it again.
 
#14
This is the inevitable consequence of the volume that everyone cheers, and Tesla's own price cuts.

Tesla will low ball you because they're selling their new cars for less than when you bought yours. Other dealers will be wondering if they're going to take a £5k-£10k haircut after taking in your car in part-ex or whatever if Elon decides to lower prices again, and will bid you in the balls accordingly.
 
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#17
One could make an argument that the price of cars nowadays doesn't really mean anything at all, because the vast majority of people use finance. All it dictates is the monthlies.

As to your question - I presume that car would be worth ~£35k?
 
#18
Durzel said:
Tesla will low ball you because they're selling their new cars for less than when you bought yours.
Click to expand...

But if you are then buying a nice shiny new Tesla that will be less too ... maybe the other Marque you hanker after too ('coz Batteries cheaper than last year, and Tesla price drop means the others have to MeToo)

EVs can only get cheaper, relatively, as economises of scale and factory upgrade amortisation kick in - price of batteries will fall (or more-range-for-same-£)
 
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