USBank lease buyouts

[Mikesd23]

I am a Fall 2016 model S buyer, and am wondering based on experience for prior leases through Tesla how USBank will approach dealing with these far above market value residuals.

It seems to me assuming market values land squarely where depreciation forecast assumptions set the original lease terms, USBank would be willing to knock the tax credit amount ($7500) off lease buyouts since they recovered this on the backend. The alternative for them is selling at auction at similar discounts (or greater).

Not sure how long USBank leases with tesla have been around, but has anyone achieved these sort of buyout reductions with their Teslas?

Interested in community thoughts on this.

 

[vdiv]

I will wait for the lease to end (May of 2018) to make that negotiation/determination and to compare with similarly equipped CPO cars. My residual as stated is much higher than a new well-equipped Model 3, which makes it harder to justify buying out a soon-to-be out of warranty Model S. I do like my Model S quite a bit, but it was never a "practical" solution for my "needs".

 

[patrick40363]

You don't lease a car to purchase at the end of the lease.

 

[miimura]

You don't lease a car to purchase at the end of the lease.

...unless the manufacturer rolls the tax credit into the lease up font and you would have trouble claiming it all on your own taxes. However, this applies mostly to cheaper EVs than it would to a Tesla buyer/lessee.

 

[chillaban]

You don't lease a car to purchase at the end of the lease.

...unless the manufacturer rolls the tax credit into the lease up font and you would have trouble claiming it all on your own taxes. However, this applies mostly to cheaper EVs than it would to a Tesla buyer/lessee.

What miimura said!

In most traditional leases I don't see why would don't keep both options open. Leasing gives you a guaranteed midpoint safety net but if you really love the car, minus a couple negligible fees you can still buy out the car and own the car long term.

But the US Bank lease is structured very disadvantageously for buying out the lease.

 

[Mikesd23]

Exactly. As well, every decision is independent from another. For example, if the used car market is pressured much lower in price relative to the new car market at the time of lease completion, and Tesla has not sufficiently innovated relative to my initial purchase, it might make sense to buyout from a bank willing to be aggressive with such a sale.

The reasons for leasing are justified by each individual financial scenario as well as consumption preference. I can still depreciate a used vehicle and claim a mileage deduction, etc to get tax benefits in some scenarios that may exceed that i originally obtained leasing. So why not keep the option open and always be on the lookout for a better deal?

If i only lease because i like new and like simplified all in deductions (especially from taking the tax benefit of front end heavy depreciation), thats another story, and i get the buyout story may be unimportant.

But to some of us, there is more that goes into the process than that.

Still have not seen any replies from any people who have executed or negotiated buyouts for teslas... am curious, please chime in.

 

[chillaban]

Still have not seen any replies from any people who have executed or negotiated buyouts for teslas... am curious, please chime in.

I need to pull up the contract from last year (the only perk of getting that extra credit inquiry was finally getting a copy of that contract), but I recall that if you want to buy-out before the end of your lease term, they also force you to pay the early termination penalty fee. Traditionally, the penalty fee is only assessed if you want to get out of your lease mid-term by making the remainder of the payments: They usually charge the sum of your remaining payments (less tax) and a penalty fee ranging from one to a couple additional monthly payments.

To be perfectly honest the US Bank lease seemed like it only made sense if you knew for sure you'd be okay with keeping the car for exactly the lease term, and finish off with a mileage not too far off from what you leased (There was even an additional clause around "excessive" wear and tear that was separate from the 0.25c/mi mileage fee)