[Buy vs Lease] Isn't lease a no-brainer now that tesla y can be bought out after the lease period?
Yet another buy vs lease post. However, I just noticed that Tesla now allows buyout of the leased vehicle at the end of the lease period. For Model Y, lease payments (299/mo) + final buyout works out to be less than the cash purchase price. Am I missing something very obvious? Leasing seems like a no-brainer..
Make sure and uncheck gas savings.. that can make the price look cheaper than it is
Yes, thanks. The advertized 299/mo doesn't factor in the gas savings, but assumes 3K down. with 0 down, that becomes ~390/mo
That’s not bad at all. I personally would not put any money down on a lease.
This. Never put money down on a lease.
If you are pretty confident you will buy it, it's fine to put more down. Then again, you shouldn't be leasing a car if you intend to buy it in the end.
Money down has literally no impact on the purchase option at the end. It is just money that is taken off of the payments. But the reason for the conventional wisdom of “don’t put money down on a lease” is because you don’t get a refund if it’s totaled. So if you put $3,600 down, you get $100 off of your 36 payments. But if the car is totaled after 2 months, then you just donated $3,400 to the bank that financed the lease.
It can depend on the particular incentives at the time. I mean it should really come down to what the spreadsheet says.
No, you just never do it. The money isn’t refunded or reimbursed in any way if the car is totaled and it’s essentially just a prepay across all payments owed. So you have a risk with no potential of reward.
Just like the depreciation on a new car, the opportunity cost of locking equity in a car, the interest paid to finance aren't ever reimbursed. The only way to do it, is to decide when you would want to sell the car and make a spreadsheet.
Nothing down on a lease. Don't do it
I personally would lease. But not because you can buy it out after…. Because EVs are depreciating rapidly now because the tech is moving so fast.
Help me understand this logic… if no money down, wouldn’t it spread out in the lease payment…pay now or pay later, you’re paying it.
You can invest the down payment money in the stock market which could provide a better return than the lease interest rate.
You will most likely not get any money back from insurance back should the car be totaled.
Meh. I dont worry about resale. I’m almost 50 and every car I’ve ever owned I’ve driven a minimum of 11 years. Nothing I ever buy has a lot of resale value after that long and 200,000 miles anyways.
Well, here’s my logic: 299 a month x 36 months is just under 11K. A 3 year old model Y will definitely depreciate more than 11K over that period (my financed model Y has depreciated more than that in 1.5 years). So, the TCO (total cost of ownership) for that period is likely less than financing.
If you plan to hang onto the car for a very long time, it’s possible leasing doesn’t make sense. But if you’ll end up getting a new car in 3-5 years, it might make more sense.
You had a depreciation more than 11k after counting the tax credits or without? If you didn't qualify for the tax credits then it might make sense but looking at the used inventory, there is hardly any difference between new and used.
Not in Canada. My MY was 69K new plus taxes etc. even after the 7500 rebate, it was around 70K financed IIRC. Blue book has the value at 45K now. It’s possible I’d get close to 50 though.
Without taxes we're talking say 63k. I don't think it's fair to count taxes since you'd have the same in any car. I recently bought a gas car and a Y. I bought used both times but I felt the used gas Honda showed more depreciation (in comparing money saved on buying used vs new) than the Y. And Honda's hold value. I do realize that there have been a lot of price cuts and those have caused depreciation, but are we really expecting more price cuts? It seems like the Y is very competitively priced right now.
Even at 63K it’s depreciated more than what it would’ve if I leased. I am not all for leasing but in some situations it does make more sense and I think this is one of them. But to each their own!
Oh yeah that I agree with. It needs to be done on a case by case basis
Yep, exactly.
To add though - I don’t think the price cuts is the only thing causing depreciation. I think it is because the tech is advancing so rapidly. But I think we’re still both on the same page.
So I feel the claims of Tesla depreciation are a bit overblown. I just did some calculations on edmunds.com pricing a new vs an old RAV4, model Y, and Tucson and the dealer retail prices. So Toyota being a Toyota held it's value the best at 76%. The Tesla kept to 65%. And the Hyundai 53%. I used 2021 with all of them. Which should cover the highest depreciation years. I did subtract for the tax credits on the Tesla. I know Toyotas depreciate slowly but it was interesting seeing just how slow it is. Still the Tesla number is still decent and it is handily beating one of the most common gas car brands. So I still maintain the depreciation isn't too bad.
That might change with this year though. Since there is a refresh happening.
Unless you purchase gap insurance, if you drive off the lot and immediately total the car, you are out whatever money you put down.
This is exactly why I’m leasing, the tech is moving so fast right now. Like look at the cars on HW3, they can’t even use FSD 13 yet. But if they come out with some crazy incentives, I’ll buy another car right now haha. I really want to wait for HW5 to come out before buying another Tesla. I hope HW5 comes out 2028 😂
You need to post all of the numbers if you want to really understand which option is more financially attractive.
I did the math last month and it’s not as good as you think. There are other fees and possibly tax on top of the $299. Also depends what the buyout price is.
My calculations show a net win for leasing when $7500 federal credit can not be used (due to income limits) when buying.
For those who qualify for this tax credit, buying seems to a better option
It's definitely worth it if you don't qualify for the EV rebate.
As someone that doesn’t qualify, how does this work? The lease price is the set in stone price no matter your income?
I just went today to Tesla to talk about the lease and u actually get the credit no matter the income when u lease even if u wouldn’t qualify if u buy
The $7500 credit is applied to the lease at the time you take delivery, irrespective if you qualify for the tax credit or not. Income too high to get the credit to BUY? Oh well...you're hosed. Same income but leasing? $7500 applied. It's like free money.
Lease is a hedge on them continuing to lower prices.
the buyout fee and lease fee should be added into this. the fine print includes a bunch of those.
Can you do a trade in and then lease?
They do? My 2023 doesn’t, so it must be new not retroactive?
If you plan to buy it at the end, why not just buy it at the beginning?