Another Tesla thread...

[thetoddjohnson]

Okay, so I guess I don't understand the math exercise. Why would the vehicle that costs $4K more to purchase have a lower lease payment and also a lower amount due at signing? It makes no sense.

[kernal]

It does make sense if you understand leasing. This happens sometimes. For example sometimes a particular vehicle will lease cheaper with certain options than a base model of the same vehicle.

The lease terms are not presented here and if published by Tesla I couldn't find them with quick search. In the case of these two examples: probably the residual value (as a percentage) is better for the 90D. If you decide to lease pick that one. (might also be a hint of the the future value of the two cars if you decide to purchase also.) The 90D may hold it's value better when expressed as a percentage of MSRP.

With leasing you are basically renting the car. This is why leasing is "cheaper" than buying the car. You are only paying for what you use eg. 2 years and 20k miles. In most states you only pay tax for that amount also. You never want to lease longer than the bumper to bumper warranty because you don't want to repair a car you don't own. Also the value at the end of the lease is set so at the end of the lease you just bring the car back and walk away (assuming you have met the conditions). If the value tanked it's the leasing companies problem.

I would say in general that luxury cars don't lease well because their depreciation rates are high. But leases for luxury cars are popular because you can get more car than you could otherwise afford. Often this is more important to people than the financial hit they are taking.

Leasing is also a life style. Some people don't fit into leasing no matter the financial terms. Time for some research. Lots of info on the web. Don't use just one source. Financial advisors (especially ones on TV) generally don't like them but they are speaking to the masses and assume the masses won't take the time to understand leasing and will sign things they shouldn't.

[Mooncarter]

If the residual value of the two cars above have already been determined, what are those values?

[kernal]

Here is a link that explains residual values pretty well. https://www.leaseguide.com/articles/residualvalues/

I haven't tried hard to find details on Tesla leases. If they are published on the web anywhere they don't show up on a basic google search. The residual value and other details would be expressed on the Tesla lease agreement that the lessee would sign. The value of the car is set in advance and used as part of the calculation of the monthly payment. It is also the amount that you could buy the car for at the end of the lease regardless of the market value at the time. Only the lessee can purchase the car for that amount and if declined the leasing company sells it on the open market.

Most cars are leased from a dealership where you talk to a human. These details are discussed then. Each car, even of the same make and model will be a little different. I don't know what Tesla does about this and I'm not inclined to take the time to find out right now. It's been my experience that most salesmen don't understand leases. I always had to do it through the sales manager.

[Mooncarter]

I know what residual value is, I want to know what it is for these 2 particular cars.

"Each car, even of the same make and model will be a little different."

What the hell does that mean?

Also, the salesman? The sales manager? Why would you not talk the leasing department/leasing manager?

[kernal]

The residual value for these two cars is not published that I could find either as a percentage or as a dollar amount. Maybe you can find it. Again I'm not interested in a Tesla lease for myself so not willing to spend much time on this. I'm saying those specifics would be in the lease agreement which the lessor would get to see before he signed it. I would want to know these things in advance but maybe Tesla doesn't operate that way. Is Tesla online sales only? I don't know. I don't think they have any dealerships. There is a show room in Atlanta but I haven't been there and don't intend to go.

My leasing experience was with a local privately owned franchised dealership. Ford/Lincoln in this case. No leasing department. Fleet sales is different. We have a long time relationship with this business. We would shop the math first and pick the car out last.

Each vehicle leases differently because of different options. So identical cars would probably be the same but even then there could be differences in incentives/hold backs and what not. The dealer gets incentives on some cars besides what is advertised. This dealership didn't hide that stuff. The sales manager is very open about all this. No pressure and no "back and forth" with a salesman that can't close the deal anyway. I understand not the way this is normally done but is why we did/do business there. For me its not about the brand. It's about the deal and the purchase experience.

Example: One time I was going to lease a pickup truck. I inquired about a bedliner. They had them for $299 but at the time were on sale for $99. The truck with the bedliner installed was actually a couple of bucks a month cheaper to lease with it than with out it. Why? Because the liner added $299 to the MSRP but only $99 to the capitalized cost. Sometimes the differences are small, sometimes large.

[Mooncarter]

Well, regardless of all that nonsense, one cannot make a cost analysis without knowing the residual value stated by the lessor.

[thetoddjohnson]

Update: I decided to lease the car. If you look at market cap per vehicle sold Tesla is way, way, way overvalued vis-a-via Ford, GM, BMW or any other manufacturer. I've never leased a vehicle because I'd rather own, but I'm willing to lease this time because of the uncertainty of the Tesla brand.

Because of a snafu in the Tesla ordering system they relocated the car a few thousand miles because the system thought that was where I wanted it. Doh! Let's hope the software that drives the cars is better than the software they use to sell/lease cars. Hahahaha.

So, rather than ship the car back they located a "similar" vehicle in the area. They ended up swapping in a car that is identical except it has a carbon fiber interior. Because of "incentives" the second car actually ends up cheaper even though it has a more expensive configuration. Go figure.

TJ

[Mooncarter]

Good for you!