Buy always with cash. If you can't afford to do it, then buy what you can afford.
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You're right, the $7.5k looks to be deducted. I didn't see it explicitly mentioned.
Would you be able to put your spreadsheet on google docs or drop box and PM me a link, I'd love to play around with the numbers to see what I come up with.
I'm not concerned with monthly payments, I'm just trying to get the best overall estimated cost of ownership.
XLR8OR
Member
I leased a P90DL for $670 a month and $5k down, so I don't really agree with the people that are saying that it "never" makes financial sense to lease. It can if you find a well priced car.
That said with your car, I would probably purchase it as long as the options are things you would have actually paid for and aren't getting just because the car is discounted, and will want to keep the car >4-5 years. Aside from 40 miles of range, the 90D isnt different than a 75D anymore, so you can get brand new model S in the upper $80s at any time.
That said, while Tesla depreciation has been relatively good up to this point, it's hard to predict the future with Model 3, interior refresh, etc. I wouldn't assume your $81k after rebate car is going to be worth 60+ in 3 years. I doubt I would pay that for it.
That said with your car, I would probably purchase it as long as the options are things you would have actually paid for and aren't getting just because the car is discounted, and will want to keep the car >4-5 years. Aside from 40 miles of range, the 90D isnt different than a 75D anymore, so you can get brand new model S in the upper $80s at any time.
That said, while Tesla depreciation has been relatively good up to this point, it's hard to predict the future with Model 3, interior refresh, etc. I wouldn't assume your $81k after rebate car is going to be worth 60+ in 3 years. I doubt I would pay that for it.
Canuck
Well-Known Member
I look at it the opposite way. I've never leased or financed any vehicles. When I was young and working my way up, I bought cheap vehicles that I could afford in cash. When I earned enough to buy investments, and had those investments paying me, including dividends from stocks, and rent from rental properties, I bought my Tesla with cash.
I've never felt uncomfortable one bit doing it this way. But I grew up without much food in the cupboards and I didn't want that for my kids so I did everything I could to build up a good nest egg before throwing my money away on a significantly depreciating asset. In fact, I never thought I'd pay over $100k for a vehicle - that seemed nuts to me. But then Tesla came along and I became obsessed -- so I ignored my fiscally conservative self and made the purchase -- and I'm sure glad I did.
Destiny1701
22’ M3LR ‘DrkNite’/ 22’ MYP BliueRocket
Quick math...given the fact that the P90DL itself depreciates at more than $8000/yr, I'd love to know how this price was even achievable? Either you had one amazing discount at purchase or the residual is artificially high or interest rate is 0% or some combo thereof? That lease price seems impossible no matter how it's sliced and diced.
Please prove me wrong!!
I dont have it right in front of me, but the MSRP was ~$140k, and the "selling price" of the lease was ~$100k. Residual value (calc'd off the MSRP) was ~$94k. And it's only a 2 year lease. So 6k of depreciation + finance charge of 4.3xx% or whatever it was over 2 years.
Destiny1701
22’ M3LR ‘DrkNite’/ 22’ MYP BliueRocket
Well that would do it then! You managed to get a lease at 28% off MSRP with the residual base not upon the actual purchase price.
Wow.
Whose your lessor?! Who would willingly lease at the price?
It was at the end of q3 2016 from USBank. There were a few people that got big discounts on performance cars (and to a lesser extent non-p cars) as part of Teslas 2 year lease program / EOQ push.
And this is only my second lease, but I thought the residual was always based off the MSRP?
Thanks for all of the responses, it's nice to see an active and helpful car forum!
I finally have the numbers in front of me.
MSRP $110,250 (incl doc & dest)
Discount: $21,082
Cash price: $89,168
36/10K Lease:
Using a slightly modified version of James's spreadsheet and 36 months as a line in the sand.
however, the principal balance on the loan will be $45,875
which means I would need to sell it for $52,211 to break even. anything over that, the Loan route comes out ahead.
I'm seeing a bunch of 2015 90D's retail for $67-75K depending on miles and options. with an added year of depreciation, they'll be $59-65K. So I think it's a safe bet that I'd get over $52K for my 90D in 3yrs, don't you think?
I finally have the numbers in front of me.
MSRP $110,250 (incl doc & dest)
Discount: $21,082
Cash price: $89,168
36/10K Lease:
$67,036 residual
$793/mnth
36/12K Lease:$793/mnth
$65,933 residual
$822/mnth
36/15K Lease$822/mnth
$64,830 residual
$850/mnth
lease out of pocket: $5K + $1,090 fees + ~$2,450 TTL$850/mnth
Using a slightly modified version of James's spreadsheet and 36 months as a line in the sand.
Leasing will result in $37,743 being paid out.
Loan will result in $44,079 being paid out.
a difference of $6,336 in favor of leasingLoan will result in $44,079 being paid out.
however, the principal balance on the loan will be $45,875
which means I would need to sell it for $52,211 to break even. anything over that, the Loan route comes out ahead.
I'm seeing a bunch of 2015 90D's retail for $67-75K depending on miles and options. with an added year of depreciation, they'll be $59-65K. So I think it's a safe bet that I'd get over $52K for my 90D in 3yrs, don't you think?
I dunno, it seems as long as the car is worth more than $52,211 after 3 years, I'd come out ahead on owning it, and I wouldn't be restricted by the lease terms (mileage, when I can turn it in, etc)
It seems to me that the only way leasing would make sense for me would be for the following reasons
- Favorable tax write-off (I'm primarily a W2)
- If I cared about a lower monthly payment (I don't)
- If I think the value of the car would be less than $52k after three years (I don't)
Lease vs. Purchase
The decision turns on many factors, both those set by the dealer and those set by your own personal wants & needs.
For me, realizing the age of the ICE was soon to end, I leased a 6 speed manual BMW just about a year ago. It took a nationwide search to even find a manual transmission. (I did own Prius #3 off the boat back when it first came out and they only took internet orders, so I knew I would be returning to an EV when the time was right). But anyway, back to the factors that were/are most important to me:
1. RESIDUAL vis-a-vis MONTHLY PAYMENTS vis-a-vis BUYOUT. My BMW dealer set the residual very high, making payments very low. Result: very easy to afford. I don't know how Tesla sets residuals, but that's a significant factor. If it's high, then that makes payments so much easier. If is low, then perhaps might as well purchase, as you are close to doing so anyway. This then ties to the following if you lease: With a high residual, the car is more likely to be worth less then the lease-end buyout price. My leased BMW already is worth less than the residual per KBB, and it is just 12 months in, so I would not purchase at lease end even if I weren't switching to Tesla.
2. FLEXIBILITY. This is the personal factor that once made the lease/purchase decision so difficult, but has since been virtually removed. Flexibility means the ability to swap out cars to take advantage of, e.g., technology changes, or changed personal circumstances. With major sites like swapalease, the buy vs. lease decision vis-a-vis Flexibility is essentially gone. In other words, at one time, you leased and were stuck for the term (unless you wanted to essentially "buy" the car out of the lease, when possible without additional penalties, converting a lease to a purchase). But that could require a loan or considerable cash on hand up front. But it is much easier now. I called swapalease and, as it happens, a stick shift BMW is in demand. So even though I'm only 12 months into a 36 month lease, I can lose the car tomorrow -- without having to find the cash to buy it before selling it (BMW leases are incredibly forgiving, so no early out penalties). Someone would take over the lease and I would not be out a dime, in fact, I would be paid back some of my down payment. The same ability to get out of -- and into -- a Tesla lease exists. I just happened to look and found these: Tesla Lease Deals | Swapalease.com ... and at least one of these folks needed to get out of the lease due to personal circumstances. Now, Tesla technology changes rapidly, so cars with earlier hardware may be discounted more than otherwise, but that wouldn't be much different than what would happen with a purchased car.
3. I'm a reservation holder on a Tesla 3. If it arrives in 12 months, I can lose the BMW lease (without having to buy it out) in favor of the 3. Or I can lose the BMW lease now and take over an S lease for X months until the 3 is available.
4. Then, whether to buy or lease the 3? Well, loop back to item #1 above.
gckmac
The decision turns on many factors, both those set by the dealer and those set by your own personal wants & needs.
For me, realizing the age of the ICE was soon to end, I leased a 6 speed manual BMW just about a year ago. It took a nationwide search to even find a manual transmission. (I did own Prius #3 off the boat back when it first came out and they only took internet orders, so I knew I would be returning to an EV when the time was right). But anyway, back to the factors that were/are most important to me:
1. RESIDUAL vis-a-vis MONTHLY PAYMENTS vis-a-vis BUYOUT. My BMW dealer set the residual very high, making payments very low. Result: very easy to afford. I don't know how Tesla sets residuals, but that's a significant factor. If it's high, then that makes payments so much easier. If is low, then perhaps might as well purchase, as you are close to doing so anyway. This then ties to the following if you lease: With a high residual, the car is more likely to be worth less then the lease-end buyout price. My leased BMW already is worth less than the residual per KBB, and it is just 12 months in, so I would not purchase at lease end even if I weren't switching to Tesla.
2. FLEXIBILITY. This is the personal factor that once made the lease/purchase decision so difficult, but has since been virtually removed. Flexibility means the ability to swap out cars to take advantage of, e.g., technology changes, or changed personal circumstances. With major sites like swapalease, the buy vs. lease decision vis-a-vis Flexibility is essentially gone. In other words, at one time, you leased and were stuck for the term (unless you wanted to essentially "buy" the car out of the lease, when possible without additional penalties, converting a lease to a purchase). But that could require a loan or considerable cash on hand up front. But it is much easier now. I called swapalease and, as it happens, a stick shift BMW is in demand. So even though I'm only 12 months into a 36 month lease, I can lose the car tomorrow -- without having to find the cash to buy it before selling it (BMW leases are incredibly forgiving, so no early out penalties). Someone would take over the lease and I would not be out a dime, in fact, I would be paid back some of my down payment. The same ability to get out of -- and into -- a Tesla lease exists. I just happened to look and found these: Tesla Lease Deals | Swapalease.com ... and at least one of these folks needed to get out of the lease due to personal circumstances. Now, Tesla technology changes rapidly, so cars with earlier hardware may be discounted more than otherwise, but that wouldn't be much different than what would happen with a purchased car.
3. I'm a reservation holder on a Tesla 3. If it arrives in 12 months, I can lose the BMW lease (without having to buy it out) in favor of the 3. Or I can lose the BMW lease now and take over an S lease for X months until the 3 is available.
4. Then, whether to buy or lease the 3? Well, loop back to item #1 above.
gckmac
OP,
In general it is not advised to lease a tesla. In your case however, considering the massive 20 percent discount, leasing is likely advised
It's a no brainer in my opinion and I suspect that the people here who advise you to buy don't understand how a lease works.
In your case you are paying 80 percent of MSRP. The residual value is 60 percent if I remember. So you are only paying 20 percent of the entire car over 3 years of ownership (+finance charges). That is a good deal.
You do not have to take my words for granted. You should go to a dedicated lease forums and show them the numbers and have them weigh in. I recommend leasehackr.
Note that I am making some assumptions here:
- you are not in a lease unfriendly state like Georgia that forces you to pay the entire sales tax of the vehicle
- you will take well care of the vehicle
- I did not run the run the entire numbers (money factor etc)
I am 95 percent confident that buying is a very foolish thing to do here. I suspect knowledgeable people who lease will side with me. Again use a dedicated forum.
In general it is not advised to lease a tesla. In your case however, considering the massive 20 percent discount, leasing is likely advised
It's a no brainer in my opinion and I suspect that the people here who advise you to buy don't understand how a lease works.
In your case you are paying 80 percent of MSRP. The residual value is 60 percent if I remember. So you are only paying 20 percent of the entire car over 3 years of ownership (+finance charges). That is a good deal.
You do not have to take my words for granted. You should go to a dedicated lease forums and show them the numbers and have them weigh in. I recommend leasehackr.
Note that I am making some assumptions here:
- you are not in a lease unfriendly state like Georgia that forces you to pay the entire sales tax of the vehicle
- you will take well care of the vehicle
- I did not run the run the entire numbers (money factor etc)
I am 95 percent confident that buying is a very foolish thing to do here. I suspect knowledgeable people who lease will side with me. Again use a dedicated forum.
P100DHG.
Member
@JackIT You can sell the car prior to the termination of the lease to Carmax as I did with our Audi Allroad and got a check for $1100 rather then just turning it in. If you think the car is worth more then the residual this is a good option to explore. My brother did it with his A3 also and walked away with $4000. But if you buy it you can sell it at anytime to anyone. With a lease you can buy it but often times they won't let you sell it to a private party. You'd have to buy it, pay sales tax and then sell it so you'd have to have quite a bit of positive equity to pull that off. In the Carmax example, dealers have a resale license and sales tax is irrelevant, it makes it easier to get equity out if it but they offer less then a private party would. though undoubtedly leasing is better off over 3 years the issue that you are aquiring a car that is still in development and continues to improve over time is one you might find yourself realizing that you saved.
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