Im saying the robotaxi thing "doesnt matter" / is not relevant in the slightest, because whether that does or does not happen, they wont let people buy out model 3 / Y leases until it makes financial sense for them to do so.
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Will Tesla ever offer Lease buyout?
- Thread starter 240vPlug
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Im saying the robotaxi thing "doesnt matter" / is not relevant in the slightest, because whether that does or does not happen, they wont let people buy out model 3 / Y leases until it makes financial sense for them to do so.
There are a lot of great responses here. Im with you on this but I have one question. When we say better for them financially are we talking long term or short term?
The way I see it Tesla may wind up with a lot of lease holders who are upset with the fees. Typically this is the way one avoids significant charges at the end of a lease when mileage is way over or if there is excessive wear and tear. They simply buy it out, avoid the fees, and keep using the car. In this case they have to pay the fees, lose use of the car, and then pay to replace it.
Im betting that a lot of folks may not come back to Tesla after a bad leasing experience. Especially as more compelling competitors show up in the marketplace. I still say they have to change this policy soon. Model 3 leases (the 36 month) are going to start coming back later this year and with no options I think there will be many folks who aren’t happy with Tesla.
The mileage over mileage charge on most leases is actually usually = or less than the depreciation the car is actually encountering. Said another way, for cars in this class ( mass market luxury), the mileage charge is typically a non issue when people actually examine what that cost of miles is vs if they had bought the car and driven those miles.
Depreciation gets paid either way (people leasing pay it too, even if some of them think they dont for some reason).
Those people on 36 month leases are only going to be unhappy right now because they cant buy and flip the vehicle. They went into that least with the expectation that they would not be able to buy the vehicle, but tesla was allowing them to facilitate selling it to a third party. They had no obligation to do that (regardless of what one active person here keeps saying about it in the model 3 subforum), but they did allow it.
Now they dont (allow third party buyouts). What will likely return is the ability to facilitate a third party buyout.
People turning in those 2018 model 3s will either buy a 2022 model 3 which is a better car in some ways (heat pump, lot of small changes, a new battery in a new car), or move to one of the competitors.
Other companies still are having issues getting traction on selling EVs, and for many "EV" = "Tesla", regardless of all the other coming soon" vehicles. I took a look at the BMW iX, as a long time BMW (15+ years prior to my 2018 model 3) customer, to replace my wifes leased X3 M40 that we just bought off lease due to "the market being crazy right now".
Its way too expensive for what it is (the iX). Its a nice looking car, but the pricing doesnt make sense. A lot of these other EVs are either too expensive, or less efficient (bigger batteries / similar range, same size battery / smaller range).
By "not better for them financially" I mean simply that they dont make more money selling them themselves than letting people leasing them buy them.
I think your right. I think short term these decisions will benefit Tesla but long term they will do harm. The majority of folks don’t examine things like we do on this forum. Heck i would bet there are a lof of folks leasing a M3 or MY that don’t realize they will not be able to buy it out at lease end.
I honestly belive leasing is the way we get the masses to move to EV. Extracting maximum profit from the customer will always work short term with the very real possibility of long term damage to the reputation of the company.
Having flexibility on the leasing will sacrifice some short term profits for long term customer loyalty.
Tesla needs to think about the long term implications of this policy.
Leasing is big for mass market luxury cars, but not so much for "regular tier" brands. Your focus there is telling me that you are likely coming from one of those german brands I was talking about. Most people have no idea what "a residual" is on a lease, or a money factor, and get flipped to a lease by a car salesman telling them something like:
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"You mentioned you wanted to pay $450 a month max for a car, right? Did you know that if you lease instead of buy, you can get this loaded model here, vs the stripped down one you were looking at, all for that same price? We will even throw in the truecoat paint protection, and window etching!. Plus, you just turn it in after 3 years and get a new one for a similar price! Whats not to love!... just sign here......"
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When you get to real lease afficionado's who know how it all works, they like leasing cars where it makes sense to lease them (subsidized or heavily incentivized). Tesla doesnt currently have a captive finance arm, nor do they have dealers who need to have "cars on the lot" for people to buy.
Teslas current high resale values (even pre pandemic) for model 3 and Y mean lower depreciation, and also mean that until that changes drastically, buying these and then selling after 3 years actually makes sense, unlike a typical german car, which is worth about 49 to 53% of its MSRP in 3 years (unless you are talking about specific porsches or something).
I just dont think a lack of lease buyout is going to change most peoples mind. They are either using leasing as a vehicle to get into more car, or using the leasing as a business write off, etc. Teslas bean counters agree, or they would be allowing lease buyout on 3s and Ys, lol.
Thats why S and X have it, those have kinda taken a beating on residuals and they have a harder time moving them.
Srad600Volt
Member
Also bear in mind Tesla just added the "Buy Out Lease" button to the app (under financing), which was not available previously. I haven't touched it to see if the option is greyed out or not, but I agree with what is being said. At some point, Tesla will have too much inventory and not enough sales and then that button will go live (for the MY).
Yes the cat salesman
. Better yet how about one of those balloon loans? I have owned many cars over the years some american and some german, a Saab and a Volvo somewhere in there too.I want Tesla to succeed long term. I see this as one of the things that needs to improve.
Still let’s forget all about what i said about long term strategy for a second. Once the leased vehicles start flooding the used market wouldn’t that drive down values? If you let customers buy the vehicles that keeps them off the used market and will maintain resale. Cheaper used vehicles willl negatively impact new sales wouldn’t it?
I still say 1 year and this has to change. Its a bad policy IMO.
No they only allow the following three scenarios:
1) Transfer the lease to another credit approved party
2) Terminate the lease early
3) Take the lease to maturity
You can request one lease extension but nothing says Tesla must approve that request.
This is a terrible policy for everyone. Why not let folks trade it in for another Tesla? Tesla could sell the existing vehicle for a healthy profit while at the same time moving another new one. Its good for Tesla and its stockholders plus the customer is happy.
Srad600Volt
Member
Do you mean you want to trade in your current car to Tesla as part of a new lease? My short answer is I don't know, but I'd ask the SA, they can likely give you that information well ahead of time.
TSLY
Member
Five years from now, who knows? Tesla might even get around to offering HUD, Surround View, and, uh, radar.
You can be sure there is some price at which they will let you buy out your lease. They are a lot of things, stupid is not one of them. You would not like the price; they would need to make enough more money on it to be worth the hassle of doing something out of the ordinary. You'd probably do better by terminating early and buying a new car.
And CarPlay.. and real blindspot monitoring with LEDs in the mirror.. and rear cross-traffic alerts.. and ventilated seats.. and hands-free power liftgate.. and powered sunshade or electrical tinting for the full glass roof. You know... things you would expect to see on a $60k vehicle. Things that came on my wife's $46k ID.4 ($39k when you count the $7,500 tax credit).
Until then.. we can only dream
Check my email out sent to Tesla this evening. Cant believe they are acting this way to a new customer.
Hello,
I hope this email finds you all well. I regretfully am having a very difficult experience with Tesla Sales in regards to my recent order for a new 2022 Model 3 Long Range and am in desperate need of some assistance.
I recently paid the $250.00 deposit and completed and passed the credit process for a new lease. I have uploaded the documentation for my trade-in and have received my offer of $21,000.00. Previously within the last few weeks I originally was on my way to purchasing a pre-owned 2018 Tesla Model 3 Long Range through Tesla direct. I paid the $500.00 deposit and after having a few questions answered along with review of the vehicle I decided it was best to go new. I was advised that my deposit was not transferable though I was remaining with Tesla. During the process of looking to purchase the pre-owned Tesla i was quoted a trade-in value of the same vehicle of $22,300.00.
Within a weeks time my vehicle value with Tesla went from $22,300.00 with purchasing a used vehicle to now only $21,000.00 in leasing a brand new vehicle. I would have assumed the value of the vehicle would have remained the same as nothing has changed. I'm not looking to take my business anywhere else but with Tesla but I can't afford to keep losing money this way and I don't believe your corporation is about treating customers this way, it's another major reason why we're choosing you over your competition.
I am now out of pocket a total of $750.00, and am being offered $1,300 less for my vehicle then what I was offered a week ago.
I know you a large company but I am desperately in need of help. My wife and I work very hard for what we have and this was a major purchase for us as we love what Tesla as a company represents and wanted to be very much part of the movement. I am 48 years of age with 4 daughters and money is always a consideration for us. We were expecting a much different experience given what I consistently read and watch on Elon and your organization. I'm hoping you can please step in here and provide some positive change to what is quickly becoming a very sad and costly situation for my family and I.
I have multiple text messages out to your Sales Team as instructed but have not received a response at this time.
Please help.
Kind regards,
Hello,
I hope this email finds you all well. I regretfully am having a very difficult experience with Tesla Sales in regards to my recent order for a new 2022 Model 3 Long Range and am in desperate need of some assistance.
I recently paid the $250.00 deposit and completed and passed the credit process for a new lease. I have uploaded the documentation for my trade-in and have received my offer of $21,000.00. Previously within the last few weeks I originally was on my way to purchasing a pre-owned 2018 Tesla Model 3 Long Range through Tesla direct. I paid the $500.00 deposit and after having a few questions answered along with review of the vehicle I decided it was best to go new. I was advised that my deposit was not transferable though I was remaining with Tesla. During the process of looking to purchase the pre-owned Tesla i was quoted a trade-in value of the same vehicle of $22,300.00.
Within a weeks time my vehicle value with Tesla went from $22,300.00 with purchasing a used vehicle to now only $21,000.00 in leasing a brand new vehicle. I would have assumed the value of the vehicle would have remained the same as nothing has changed. I'm not looking to take my business anywhere else but with Tesla but I can't afford to keep losing money this way and I don't believe your corporation is about treating customers this way, it's another major reason why we're choosing you over your competition.
I am now out of pocket a total of $750.00, and am being offered $1,300 less for my vehicle then what I was offered a week ago.
I know you a large company but I am desperately in need of help. My wife and I work very hard for what we have and this was a major purchase for us as we love what Tesla as a company represents and wanted to be very much part of the movement. I am 48 years of age with 4 daughters and money is always a consideration for us. We were expecting a much different experience given what I consistently read and watch on Elon and your organization. I'm hoping you can please step in here and provide some positive change to what is quickly becoming a very sad and costly situation for my family and I.
I have multiple text messages out to your Sales Team as instructed but have not received a response at this time.
Please help.
Kind regards,
Unfortunately I don’t think Tesla will reply. Tesla makes an excellent product minus a few quality issues such as paint for example. My interactions with sales and service center folks have been good. Tesla corporate though appears to have policies that put short term profits ahead of longer term customer satisfaction and loyalty. Just take a look at all the complaints on the BBB.
If they changed the leasing policy and improved customer service and communication they would be unstoppable.
I have leased every vehicle i have owned and then buy out at the end
because with a lease my payments were cheap af compared to a loan and then at the buy out id do 2 or 3 year loan for the same monthly or close too whatthat i was leasing before because the residual value was cheap at that point
case in point my previous 2018 accord 2.0 was 32k i leased it for 350$ 1.8% interest no downpayment
if i were to have done the loan at the time it was for the 32k at 3% interest and my monthly woulda been 570$
after 3 years with what i put in and residual value i financed it for 20k put like 3k downpayment cause i could an 2.1% interest with my credit union
for 3 year loan
my monthly payment was like 370$
Plus its a lease gap insurance is included and you don't have to worry about almost any repair costs that the vehicle may surprise u with in the beginning
granted it was a honda so unlikely
As far as i'm aware right now you can buy out model S and X leases
also last year with this crazy used car market i saw toyota and honda have both suspended lease buyouts for now
This was my first Ev so i leased it for sure i didn't want any surprises i've never owned an Ev and if i didn't like it adios after 3 years
because with a lease my payments were cheap af compared to a loan and then at the buy out id do 2 or 3 year loan for the same monthly or close too whatthat i was leasing before because the residual value was cheap at that point
case in point my previous 2018 accord 2.0 was 32k i leased it for 350$ 1.8% interest no downpayment
if i were to have done the loan at the time it was for the 32k at 3% interest and my monthly woulda been 570$
after 3 years with what i put in and residual value i financed it for 20k put like 3k downpayment cause i could an 2.1% interest with my credit union
for 3 year loan
my monthly payment was like 370$
Plus its a lease gap insurance is included and you don't have to worry about almost any repair costs that the vehicle may surprise u with in the beginning
granted it was a honda so unlikely
As far as i'm aware right now you can buy out model S and X leases
also last year with this crazy used car market i saw toyota and honda have both suspended lease buyouts for now
This was my first Ev so i leased it for sure i didn't want any surprises i've never owned an Ev and if i didn't like it adios after 3 years
If it makes you feel any better.. they pulled the same sort of crap on me.
When I did the test drive last year, Tesla quoted me $21,000 for my 2018 CRV. The figure was a little low compared to sites like Carvana & Vroom that offered a $600-800 more.. but I'm in the state that requires you to only pay sales tax on the difference when trading in a vehicle. So I went ahead placed the order for a new 2021 Model Y. Found an inventory car in Chicago with exactly my specs, so I switch my reservation to that and purchase a one-way plane ticket to get my new Tesla.
In the meantime, Tesla's used car dept requests pictures of my car before I turn it in. I send in all the pictures and they reply back their final offer has now dropped to $19,000. Umm, what????? Their stance was due to literally a dime-sized dent in the hatchback. And they would need to replace the entire hatchback to fix it.. lmaooo!! I have no doubt any paintless dent repair shop could fix that in about 5 minutes in any random parking lot for like $50!! Since I have already placed a deposit on an inventory Y sitting in Chicago, have already purchased a one-way airplane ticket to Chicago.. and now Tesla is pulling this crap. As you can imagine I am absolutely fuming at this clown show of a company.
So I take a night to think about it. Wonder should I just cancel the whole deal and keep my CRV? And I'm like no, I really want to delivery of the new Y right now. And I can always sell my CRV later.. its not like I absolutely need to sell immediately. So get the Y and bring it home. Reconsider the $21,600 offer from Carvana & Vroom as it's still significantly more than the lowball $19,000 offer from Tesla. But decide to try my hand at the private market first.. list the car for sale on Facebook & Craiglist. Within 2 days I already had an offer for $23,500.. that's $4,500 more than what Tesla tried to lowball me. The guy making the offer had trouble getting his bank loan for my car, so I took the next best offer of $23,000 from a local Honda dealer. And I'm so glad I did. Not only did they show up just two days later with a check for the full amount and said the dime-size dent was no problem whatsoever (we all laughed about Tesla's claim they had they had to replace the entire hatchback). But the local Honda dealer advised me to contact Honda Financial and cancel the extended warranty & maintenance plan I had purchased on the vehicle when I bought it new. Sure enough, within a week Honda Financial prorated the plans.. and refunded me an additional $1200!!!
I walked away with a total of $24,200 for my CRV and had a huge smile on my face all week that I didn't even bother thinking about Tesla's $19,000 low ball offer! And I am still thrilled I sold my old car for basically $5000 more than what Tesla finally offered.
My advice to you is to do the same. List your vehicle on Facebook & Craigslist.. and feel confident knowing that local dealers will contact you looking to purchase your vehicle. I would bet they will probably pay significantly more for your trade in.. than what ever Tesla is currently offering.
I'm waiting for the vehicle colorizer...
No no no... I don't mean the "Vehicle Icon Colorizer" we just got,
I mean the VEHICLE colorizer, where I can go in and decide that it's a sunny day, and I want my Model Y bright yellow, and the paint instantly changes to yellow, or I'm driving long distance on the freeway, want to travel under the radar of the local highway patrol, so I go into the Vehicle Colorizer and turn my bright yellow Model Y to a dark grey!!!
I figure update 2028.7.3 we should have it!
SilentWarp
Member
The answer is FSD. The incremental cost is $0.00. They make an extra $10-12,000 profit on each used car. And buyers gobble them right up.
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