Why buy a used Tesla vs leasing brand new one?

[Tezla1]

I’m in the market to buy/lease a new M3.

At first, I was thinking to buy used 2022 m3 and take advantage of the 4k EV credit, so maybe I buy for 25k + 3k taxes and fees -4k rebate = 24k for a used 2022 / 2021 model 3.

Let’s assume I pay cash, drive 15k miles per year and sell the car at end of year 3.

In 3 years, I will most likely sell the vehicle, maybe for around 12k ? (Is this too low?)

So, over 3 years, the car would cost me 12k.
Also, add the borrowing “cost” of 24k , which is earning 5% APY in a savings acct currently, so I lose out on $3600 interest income, which brings cost up to: $15,600

This is assuming I pay all cash to buy the car, 24k. Cash taken from savings account

Now compare that to a lease: 2024 highland base

$479/mo for a base 2024 M3, $2500 Due At signing, no down payment.

Total lease Cost is: $19,744
(deduct interest income for keeping $24k in bank = $3600)
Net lease cost: $16,144


So, in summary:

Buy 2 year old used Tesla M3 = $15,600
Lease 2024 M3 new = $16,144

Difference: +$544 extra cost to lease brand new 2024 vs buying 2-3 year old used Model 3.

Does it really make sense to buy used, if the difference is so small?

Or did I miss something in my thinking?

 

[jjrandorin]

I’m in the market to buy/lease a new M3.

At first, I was thinking to buy used 2022 m3 and take advantage of the 4k EV credit, so maybe I buy for 25k + 3k taxes and fees -4k rebate = 24k for a used 2022 / 2021 model 3.

Let’s assume I pay cash, drive 15k miles per year and sell the car at end of year 3.

In 3 years, I will most likely sell the vehicle, maybe for around 12k ? (Is this too low?)

So, over 3 years, the car would cost me 12k.
Also, add the borrowing “cost” of 24k , which is earning 5% APY in a savings acct currently, so I lose out on $3600 interest income, which brings cost up to: $15,600

This is assuming I pay all cash to buy the car, 24k. Cash taken from savings account

Now compare that to a lease: 2024 highland base

$479/mo for a base 2024 M3, $2500 Due At signing, no down payment.

Total lease Cost is: $19,744
(deduct interest income for keeping $24k in bank = $3600)
Net lease cost: $16,144


So, in summary:

Buy 2 year old used Tesla M3 = $15,600
Lease 2024 M3 new = $16,144

Difference: +$544 extra cost to lease brand new 2024 vs buying 2-3 year old used Model 3.

Does it really make sense to buy used, if the difference is so small?

Or did I miss something in my thinking?

Im not going to check your math, but while you mentioned "sell the car in year 3", leasing the car you are locked in to having to turn the car in, in year 3, no matter what is going on in your life at the time, whether you want to or not.

With a purchase, its always your choice.

With a lease, if you are one who likes to "do stuff" to your car, if you do anything with a lease you have to return it to stock before you turn it in, or they may charge you for doing so. Stuff like window tint, non OEM wheels, etc etc.

With a purchase, any car sale is basically "as is". You can choose to remove stuff, or not, your choice.

Those are considerations, but as long as you know them, you can make a decision. Im not against leasing, I leased vehicles for like 18 straight years. If the choice was "buy used Tesla" or "lease new Tesla" I would probably lease a new one. I prefer new cars. Specifically with a used Tesla, I am not that interested in these as used cars.

 

[Sephiroth]

Why are you selling in 3 years? Run that thing into the ground like it’s meant to.

 

[Jangy]

A 2020 model 3 is already OLD. I could see buying a used 2021 as a "better" ONLY if you plan to drive it into the ground. Otherwise I would lease. But why lease a Highland that has terrible lease rates and no tax incentive? I say lease a new Y (get good lease rates). Run those numbers. There is a new model coming out in a year, so a 2-3 year lease is a sweetspot

 

[Tezla1]

A 2020 model 3 is already OLD. I could see buying a used 2021 as a "better" ONLY if you plan to drive it into the ground. Otherwise I would lease. But why lease a Highland that has terrible lease rates and no tax incentive? I say lease a new Y (get good lease rates). Run those numbers. There is a new model coming out in a year, so a 2-3 year lease is a sweetspot

The new 2024 highland has really good lease rates. Trust me

I just got a check for $7,400 for “positive equity” after leasing the 2024 M3 base model , I had it 3 months and put $0 down

The previous model 3 (2023 and older) leases were garbage, but they’re artificially increasing residual values for 2024 M4 to make it a great lease

 

[OCR1]

The new 2024 highland has really good lease rates. Trust me

I just got a check for $7,400 for “positive equity” after leasing the 2024 M3 base model , I had it 3 months and put $0 down

The previous model 3 (2023 and older) leases were garbage, but they’re artificially increasing residual values for 2024 M4 to make it a great lease

They do seem pretty aggressive. Do these prices already reflect the $7,500 tax credit? Why is the M3P twice the price of the base model? Seems out of proportion.

 

[Tezla1]

Why are you selling in 3 years? Run that thing into the ground like it’s meant to.

This is bad for several reason. #1 being safety, I do not want to put my family in a car in road trip in a Tesla w 120k miles lol

Run into ground isnt always the best play

No thanks

 

[Jangy]

The new 2024 highland has really good lease rates. Trust me

I just got a check for $7,400 for “positive equity” after leasing the 2024 M3 base model , I had it 3 months and put $0 down

The previous model 3 (2023 and older) leases were garbage, but they’re artificially increasing residual values for 2024 M4 to make it a great lease

They do seem pretty aggressive. Do these prices already reflect the $7,500 tax credit? Why is the M3P twice the price of the base model? Seems out of proportion.

How are you guys calculating it to say it is a good deal? Leasing a new MP3 for 36 months (even with just 10000 miles per year) comes to just over $30k. That's roughly 50% of the "out the door" cash price. With a Y, it is closer to 40%.
Tesla hides the money factors and rates, so it's hard to compare. I guess context matters, too. I wasn't comparing Leasing to Financing. I was comparing it to paying cash because then I'd get the $7500. When I did that, I estimated that the cost to lease was about $10k so I'd be losing over $2500.
It would be nice if anyone with a better grasp of financial methods than I understand could break down the tesla leases for me.

 

[Sephiroth]

This is bad for several reason. #1 being safety, I do not want to put my family in a car in road trip in a Tesla w 120k miles lol

Run into ground isnt always the best play

No thanks

What safety issue? These cars are the best in crash safety! 120k miles is nothing lol. I suppose you see the car like a cell phone, disposable after a short time.

 

[OCR1]

How are you guys calculating it to say it is a good deal? Leasing a new MP3 for 36 months (even with just 10000 miles per year) comes to just over $30k. That's roughly 50% of the "out the door" cash price. With a Y, it is closer to 40%.
Tesla hides the money factors and rates, so it's hard to compare. I guess context matters, too. I wasn't comparing Leasing to Financing. I was comparing it to paying cash because then I'd get the $7500. When I did that, I estimated that the cost to lease was about $10k so I'd be losing over $2500.
It would be nice if anyone with a better grasp of financial methods than I understand could break down the tesla leases for me.

The RWD and LR AWD models at $299 and $399 are the more aggressive deals.

 

[HackingLZ]

The rate at which new/improved tech is coming out and lowered prices as Tesla becomes more efficient kept me from buying.

 

[Tezla1]

What safety issue? These cars are the best in crash safety! 120k miles is nothing lol. I suppose you see the car like a cell phone, disposable after a short time.

plenty of stories of battery dying close to 100k or 120k. Not to mention significant loss of range at 100k mile battery.

I could be wrong. If anyone has any data on this, would love to know how it holds up.

In fact, I am looking to buy a used Tesla myself, since there is a $4k rebate (without this rebate, Leasing is a clear winner imo), but only with low mileage. I don't like to keep any car past 100k miles, unless its a toyota/honda. Don't trust any other car to last past 100k without major $$ needed for mechnical issues.

 

[Dear_OP]

Used will shelter you from major depreciation if your have short car ownership lifecycle. Therefore buying a 2-3year old car is a good bet. You still have some remaining warranty.

Lease = long term rental. Unless I can write off as business expense, I'd avoid lease altogether. For the snowflake generation, please stop reading now.










Alot of BMW and MB forummers dislike when I post the following.
If you have to lease in order to get into a car, then you really cannot afford that said car. Rethink needs vs desires.

 

[cmaster]

Leasing gives you the option to buy after three years. However, by then, newer models will be available. Consider if it's worth making long-term payments, or if buying a used model would satisfy your desire and free up funds for future experiences. Life is short, so prioritize what truly matters to you.

 

[Kram3]

Leasing gives you the option to buy after three years. However, by then, newer models will be available. Consider if it's worth making long-term payments, or if buying a used model would satisfy your desire and free up funds for future experiences. Life is short, so prioritize what truly matters to you.

But Tesla does not allow you to buy the car at the end of the lease. Never heard of such a thing..

 

[Sephiroth]

plenty of stories of battery dying close to 100k or 120k. Not to mention significant loss of range at 100k mile battery.

I could be wrong. If anyone has any data on this, would love to know how it holds up.

In fact, I am looking to buy a used Tesla myself, since there is a $4k rebate (without this rebate, Leasing is a clear winner imo), but only with low mileage. I don't like to keep any car past 100k miles, unless it’s a toyota/honda. Don't trust any other car to last past 100k without major $$ needed for mechnical issues.

You are telling us lots of stories and cherry-picking numbers to fit. Hey it’s your money, good luck

 

[HackingLZ]

Leasing gives you the option to buy after three years. However, by then, newer models will be available. Consider if it's worth making long-term payments, or if buying a used model would satisfy your desire and free up funds for future experiences. Life is short, so prioritize what truly matters to you.

You can't buy out the lease

Lease

 

[cmaster]

But Tesla does not allow you to buy the car at the end of the lease. Never heard of such a thing..

You can buy it out in certain states. Not all states.

 

[father_of_6]

plenty of stories of battery dying close to 100k or 120k. Not to mention significant loss of range at 100k mile battery.

I could be wrong. If anyone has any data on this, would love to know how it holds up.

I don't believe this to be true at all. I do a fair amount of reading on these forums, and I've definitely not seen a pattern of 100k battery failures.

Although Tesla started with the Roadster, S, and X, the 3/Y now comprise the overwhelming majority of their sales. The oldest of the 3/Ys are from 2017, with 2018 being where they really started manufacturing in volume.

At this time, the majority of 3/Ys on the road are probably far under 100k miles... but for those over 100k miles, there isn't a high number of 3/Ys having battery failures. For millions sold, the failure rate is very small.

I don't have data to back up my claims, but neither do you.

One reason people lease vehicles is because they want to drive a new vehicle every few years and aren't concerned about the cost (or the lease is a tax write-off). Otherwise, leasing is never considered a good move financially.

If your math is accurate (and I don't have a clue if it is or isn't), then perhaps leasing makes sense.

The kicker is that the reason many people want to "drive a new vehicle every few years so I might as well lease" is because ICE vehicles get loud AND lose their acceleration as they get older.

For that Model 3 - it'll still be quiet and extremely fast when it's 7 years old. You might find that after 3 years you don't want to get rid of that used Model 3. And in that case, your cost of ownership will continue to drop.

@Dear_OP said it best. The used Model 3 will give you the choice after 3 years... but with leasing, Tesla *will* be taking your three-year rental back.

Lastly and not mentioned yet - the real answer to "Why buy used when you can lease new?" is just a single word... stalks.

 

[OCR1]

I’m taking another look at the Model 3 leasing because it seems like a pretty good deal right now. For the AWD model it’s $2,999 down and $399/month. I’m not factoring in taxes, registration, order fees or destination since those are pretty much the same for lease or finance purchases.

So over 36 months, I would pay $17,363 on a car that sells for $47,740. That’s only about 36% of the purchase price, which leaves a residual of 64%. I know the residual is theoretical since you can’t buy it out but in general a 64% residual seems pretty agressive for a lease.

Am I missing anything? I’m OK with 10K miles per year. We don’t drive more than that. I know I’ll probably have to buy new tires before I turn the car in. What else should I be looking at?

I’m only considering the lease because there is no tax credit on a purchase and I just don’t think it makes sense to spend $47K on the car.