Total lease costs?

[jjrandorin]

First, congratulations on your car. If I had a Tesla, that is the exact car I would buy. Great sports car color.

I usually try to put no money down on a lease. If your cap reduction is $3,500, you have paid about $100 a month up front.. So you are paying about $725 a month before tax. That's consistent with my $717 number above.

Well worth it. Enjoy!

For some reason, lots of people who lease tend to not factor in the cap cost reduction into their monthly costs. Its one of the things I normally would caution people of, when I was advising / helping them evaluate their lease offers. A person can make their lease payment whatever they want it to be, by putting enough cap cost reduction into it.

Advertised lease offers from all brands that I have seen normally include some cap cost reduction, but "lease pro's" normally understand that cap cost reduction on a lease is just pre payment of the lease, and only really serves to hide how much someone is actually paying (never mind the gap insurance concerns with large cap cost reduction on leases).

As you mention, $3500 down on a 3 year lease is basically $100 a month, so, on any lease payment with $3500 down, the actual cost to the person is $100 higher a month than the offer is stating. I used to always use an example of leasing an apartment when I would explain this to people. If one is looking at an apartment that is 1k a month, and the lease is 3 years, than means it has a 36k cost for the 3 year lease. If one puts 10k "down" on this lease, the remaining balance on the lease is 26k.

Take the remaining 26k and divide it by the 36 month lease, and now the payment is 722.22 The person gets to tell everyone how the normal cost of the apartment is 1k a month, but due to their great negotiating skills, *they* are only paying 720 a month for that apartment. Their total cost is the exact same, but because they wrote a check for that amount up front, they normally just mentally write it off... and car salespeople at a traditional dealership know this so thats one way they manipulate a persons lease numbers.

Just as a data point here’s my breakdown for AWD, white/black, 18”:

Car price: 49,190
Down: 3,500 + tax

Other fees due at delivery:
Acquisition Fee: 695
Uniform Fee: 150
Tire Fee: 4
Registration/Transfer/Titling Fees: 74

Monthly lease payment: $501 + tax

24 month lease, 10k miles per year

The payment on this lease is actually 501+Tax plus the cap cost reduction divided by the term. So 501+tax + 3500 / 24 (145.83) so 501+ tax + 145.83 = 646.83. If one were to borrow 45k on a car loan for 6 years, on a generic loan calc at my credit union it shows 703 at 3.99% interest. I believe there are lower interest rate options available now. So, one could own the car after 2 lease terms. Of course, if one doesnt plan on keeping the car then it doesnt matter.

 

[jjrandorin]

Before someone points it out in my example above, I realize the taxes can come out different in states that dont tax cap cost reduction. In CA cap cost reduction is taxed but I believe in some states its not. The example works as a simple easy to understand exercise but is not 100% accurate from a math standpoint for total costs.

 

[MrFusion]

The payment on this lease is actually 501+Tax plus the cap cost reduction divided by the term. So 501+tax + 3500 / 24 (145.83) so 501+ tax + 145.83 = 646.83. If one were to borrow 45k on a car loan for 6 years, on a generic loan calc at my credit union it shows 703 at 3.99% interest. I believe there are lower interest rate options available now. So, one could own the car after 2 lease terms. Of course, if one doesnt plan on keeping the car then it doesnt matter.

Keep in mind that lease that I posted is for a 2 year term. So in your example it would actually take 3 lease terms.

 

[jjrandorin]

Keep in mind that lease that I posted is for a 2 year term. So in your example it would actually take 3 lease terms.

your right, 3 lease terms in your case, or, own the car in 6 years.

As another data point, my wifes X3 m40I is leased. I leased it in january of this year. MSRP on that car was 68k (yes, an X3 with a higher MSRP than most on the lot X5s, as our X3 has pretty much every option). Our lease payment on that car is $740, including california tax. The RV on that car is either 58% or 59%, I dont remember. I got a 3 year 12k per year lease. Of course, I didnt pay anywhere near MSRP... I got the car for 2.5k under invoice prior to any incentives that I qualified for, on a BMW that I ordered and was built with the exact options / color etc I asked for. I didnt put any cap cost reduction in of my own, but there were incentives that were used as cap cost reduction in addition to the sales price being 2.5k under invoice as I mentioned. I paid taxes and fees up front.

I am mentioning this as a data point in the overall discussion of "tesla lease costs" not at any specific person. The TL ; DR version is that my wifes X3 has a MSRP of 10k more than the model 3P, a much lower quoted residual value, yet my payment is very close to what is being quoted for the model 3p when the cap cost reduction (or lack thereof) is figured in. German cars tend to lease very well, if one knows how to play the game.

 

[Teedub21]

I usually try to put no money down on a lease. If your cap reduction is $3,500, you have paid about $100 a month up front.. So you are paying about $725 a month before tax. That's consistent with my $717 number above.

Well worth it. Enjoy!

Ultimately that’s why I passed on the lease. They wanted around $5k down for an SR+ lease.

 

[Petrocelli]

Also, the other thing to pay attention to are allotted miles.

The difference between a 10,000 mile lease and a 15,000 mile per year lease results in a difference of about $100 a month. I calculate it like this: there is a mileage overage of 25 cents a mile. So the 15,000 miles a year lease driver gets 15,000 more miles over 3 years. At 25 cents a miles., that equals $3,750 a year, or $104.16 a month.

For sake of comparison, I am leasing a Mercedes C300 Coupe with 15,000 miles a year for about $560 a month before taxes. If that were a 10,000 mile a year lease, it would be about $460 a month. This is compared to the Model 3 performance plus which is about $725 a month before tax. Of course, the Model 3 owner is getting a lot more car for the money.

 

[MrFusion]

Also, the other thing to pay attention to are allotted miles.

The difference between a 10,000 mile lease and a 15,000 mile per year lease results in a difference of about $100 a month. I calculate it like this: there is a mileage overage of 25 cents a mile. So the 15,000 miles a year lease driver gets 15,000 more miles over 3 years. At 25 cents a miles., that equals $3,750 a year, or $104.16 a month.

For sake of comparison, I am leasing a Mercedes C300 Coupe with 15,000 miles a year for about $560 a month before taxes. If that were a 10,000 mile a year lease, it would be about $460 a month. This is compared to the Model 3 performance plus which is about $725 a month before tax. Of course, the Model 3 owner is getting a lot more car for the money.

Also, for the 3 year lease it's 15 cents per extra mile up front if you go from 10k to 12k miles, and 12 cents per mile up front if you go from 10k to 15k miles per year.

For the 2 year lease that I'm doing it was 25 cents a mile up front going from 10k to 12k miles per year, which is the same price as the overage charge at the end of the lease. So for me it was better to just do the 10k mile lease and even if I hit 12k per year it will end up being the same price as if I paid for the extra miles up front... and of course if I end up driving less than 12k per year I'll save money since I didn't prepay for those miles.

 

[MrFusion]

The difference between a 10,000 mile lease and a 15,000 mile per year lease results in a difference of about $100 a month. I calculate it like this: there is a mileage overage of 25 cents a mile. So the 15,000 miles a year lease driver gets 15,000 more miles over 3 years. At 25 cents a miles., that equals $3,750 a year, or $104.16 a month.

It's actually $50 per month if you pay for the 15k lease up front on a 3 year lease.

 

[Dan203]

Also, the other thing to pay attention to are allotted miles.

The difference between a 10,000 mile lease and a 15,000 mile per year lease results in a difference of about $100 a month. I calculate it like this: there is a mileage overage of 25 cents a mile. So the 15,000 miles a year lease driver gets 15,000 more miles over 3 years. At 25 cents a miles., that equals $3,750 a year, or $104.16 a month.

For sake of comparison, I am leasing a Mercedes C300 Coupe with 15,000 miles a year for about $560 a month before taxes. If that were a 10,000 mile a year lease, it would be about $460 a month. This is compared to the Model 3 performance plus which is about $725 a month before tax. Of course, the Model 3 owner is getting a lot more car for the money.

This could be why the 10k lease is so cheap. They're over estimating how low mileage will affect the residual. In my case my last 3 cars have all had super low miles when I got rid of them and it made little to no difference on the resale/trade price. Yet for some reason they charge significantly more for the 12k and 15k leases. When in reality the affects of that milage on the cars value in 3 year is almost nill.

Personally I don’t drive much, so the chances of me even getting to the 30k I'm allowed is almost nill. In fact if they offered a lower mileage option for less money I probably would have taken it.

 

[jjrandorin]

Ultimately that’s why I passed on the lease. They wanted around $5k down for an SR+ lease.

One other thing, not singling you out @Teedub21 at all ... is many times people leasing get "down payment / cap cost reduction" mixed in with "drive offs". Any down payment / cap cost reduction is part of drive offs, but drive offs are not necessarily cap cost reduction / down payment.

"Drive offs" are what you need to give a dealer to leave with the car". "Down payment / Cap cost reduction" is money applied to the loan balance (down payment) or lease charges (cap cost reduction). Taxes, registration, 1st months payment, fees such as lease acquisition, documentation fees (doc fees) etc are all generally part of "drive offs" but none of those are down paymnent. If one is leasing a BMW (sorry to keep mentioning them, as I have mentioned before I used to evaluate litterally 100s of BMW leases online for people), in california, a 55-60k BMW can have drive offs of 2600-2900 with zero cap cost reduction (down payment).

In the example above, its likely that @Teedub21 was quoted the "tesla standard" 3500 cap cost reduction, but drive offs were probably 5k. Important distinction when one is calculating everything out.

Enough from me on this topic lol. Enjoy your cars everyone

 

[Dan203]

My total out the door cost was $5,216. That includes the $3,500 down, $29.25 "title fee", $695 "acquisition fee", $673 first month payment and the rest taxes.

So if they allowed you $0 down you'd likely be able to walk away for about $1,500 for the title, acquisition and first month payment. But your payment, at least for the car I got, would be over $800/mo.

In my case I was trying to get the payment as close to what I'm use to as possible. It's actually about $80/mo more than my BMW but I should save about that much in gas. The cash from selling the BMW will more than cover the down payment and give me $10-$15k cash that I can put into the bank.

 

[MrFusion]

Yes, the Tesla drive-offs are pretty standard as far as just paying tax on the down payment, the registration fees, and your first month's payment. The one that they "get you" on is charging a $695 "acquisition fee". They also charge a $395 disposition fee at lease end. So basically $1090 in charges for nothing (I say nothing because I have leased many other cars in the past and have never been charged either of these fees).

 

[jjrandorin]

Yes, the Tesla drive-offs are pretty standard as far as just paying tax on the down payment, the registration fees, and your first month's payment. The one that they "get you" on is charging a $695 "acquisition fee". They also charge a $395 disposition fee at lease end. So basically $1090 in charges for nothing (I say nothing because I have leased many other cars in the past and have never been charged either of these fees).

BMW (there I go again) charges a 925 lease acquisition fee, and a 350 lease end disposition fee. The lease end fee is waived if you get another BMW. Leases having a lease acquisition fee and lease end disposition fee are pretty common. It would be strange not to see them on a lease... but a dealer can hide them elsewhere in the paperwork too.

 

[dmurphy]

in states that dont tax cap cost reduction.

... the only reason for a cap cost reduction at all, aside from "the feels" of a smaller payment.
... and here in Jersey, without sales tax on an EV, it doesn't make a hill of beans of difference.

My last vehicle was a lease; I genuinely didn't want it more than 3 years.
The Model 3 was a purchase. I intend to drive it for 7 years, and then sell it to my son for some nominal value. Expecting a much greater life expectancy out of a software-defined vehicle with electric drivetrain, than a traditional ICE vehicle. As crazy as it sounds to give a young driver a (by then, old) Tesla, I intend for his first vehicle to be a safe one. Priority #1.

 

[dmurphy]

BMW (there I go again) charges a 925 lease acquisition fee, and a 350 lease end disposition fee. The lease end fee is waived if you get another BMW. Leases having a lease acquisition fee and lease end disposition fee are pretty common. It would be strange not to see them on a lease... but a dealer can hide them elsewhere in the paperwork too.

GM Financial charges a $595 lease end fee on Chevy/Buick/GMC, and $695 on Cadillac. Waived if you buy another GM ... OR ... if you sell the vehicle outright. Which is what I did - my original lease end date was November 2019; I sold it in April 2019. The (dealer) lease payoff amount is simply the remaining payments + residual. (Consumer buyout is that + sales tax on the residual.). My Cadillac dealer's buy offer on my XT5 was $1500 below their buyout - so I gave them the vehicle + $1500 and walked away. I knew I was going to bump up against a rapidly declining market value + halving of the fed tax credit + a set of tires that would be due before lease-end.

In the 5 months since I traded it in, it's been dropping $1k in value per month (yikes!) - So $5k in resale lost - $3250 in payments = $1,750 I'd be upside down if I tried that trick now. Plus the lost $1875 tax credit + $695 lease-end fee + $400 for used tires = $4,720 I saved by getting out of the vehicle early.

Not all lessors allow the vehicle to be purchased outright, and not all of them are as simple as GMF. But it was a no brainer for me... My wife didn't exactly grasp what I was doing at the time, but she's all good with it now. And, we've had 5 blissful months with a Tesla.

 

[dmurphy]

Personally I don’t drive much, so the chances of me even getting to the 30k I'm allowed is almost nill. In fact if they offered a lower mileage option for less money I probably would have taken it.

One thing I found vis-a-vie my old vehicle... I'm putting almost double the mileage on the Tesla that I was my XT5. Even though it's smaller, we're taking it almost every time we go anywhere as a family. My wife's got a big 'ol Buick Enclave, so when we have other family units with us, we take that thing, but otherwise, it's the Tesla every time. Save on the fuel, save on the wear-n-tear on the Buick and save on the stress since the Tesla is so much less stressful to drive. Not to mention fun! We've seen a noticeable, marked difference in the mileage on the Buick's odometer monthly since getting the Tesla.

I figure the Buick is fully depreciated at 120k miles-ish. The Tesla, I have grand expectations of at least double that. Time will tell.... but if I leased the Model 3 the way I did my Cadillac, I'd be hosed on mileage!

 

[Dan203]

... the only reason for a cap cost reduction at all, aside from "the feels" of a smaller payment.
... and here in Jersey, without sales tax on an EV, it doesn't make a hill of beans of difference.

My last vehicle was a lease; I genuinely didn't want it more than 3 years.
The Model 3 was a purchase. I intend to drive it for 7 years, and then sell it to my son for some nominal value. Expecting a much greater life expectancy out of a software-defined vehicle with electric drivetrain, than a traditional ICE vehicle. As crazy as it sounds to give a young driver a (by then, old) Tesla, I intend for his first vehicle to be a safe one. Priority #1.

I wouldn't trust a young driver with the speed. Even the standard one is faster than most ICE cars off the line. If I had a Tesla when I was 16 I'd have been in big trouble. Too bad they don't have a "teenager mode" where you could lock the car in to a slower overall performance and not just lock the top speed.

 

[dmurphy]

I wouldn't trust a young driver with the speed. Even the standard one is faster than most ICE cars off the line. If I had a Tesla when I was 16 I'd have been in big trouble. Too bad they don't have a "teenager mode" where you could lock the car in to a slower overall performance and not just lock the top speed.

Given that I’ve got 7 years to worry about it,
I’m hoping they develop a Teenager Mode between now and then. If not, we’ll re-evaluate.

One of the most amazing parts of owning a Tesla is that the vehicle continues to improve day over day. It’s incredible!

 

[Dan203]

Given that I’ve got 7 years to worry about it,
I’m hoping they develop a Teenager Mode between now and then. If not, we’ll re-evaluate.

One of the most amazing parts of owning a Tesla is that the vehicle continues to improve day over day. It’s incredible!

Just watching some videos on Valet Mode and it might actually do what I was talking about. I just got my car so I haven't played with all the features yet. But it looks like it severely limits the acceleration and allows you to cap the top speed.

 

[Bosfutureowner]

Just as a data point here’s my breakdown for AWD, white/black, 18”:

Car price: 49,190
Down: 3,500 + tax

Other fees due at delivery:
Acquisition Fee: 695
Uniform Fee: 150
Tire Fee: 4
Registration/Transfer/Titling Fees: 74

Monthly lease payment: $501 + tax

24 month lease, 10k miles per year

Can you tell me where you see this quote for a 24 month lease ? I am interested in this term lease but the Tesla website only shows 36 month leases. Thx in advance. John