Model 3 Lease terms - July 2019

Ask the Hackrs
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Hello -

I’m getting ready to replace a Volt lease (after 6 years and 2 successful Volt leases) and find the current Model 3 lease terms to be somewhat reasonable. I’m interested in some expert opinions, so here are the details I currently have:

(I have reviewed the other Model 3 lease threads, and the article in May, but haven’t seen any discussions since Q3 started.)

Model: Standard Range Plus
Total Vehicle Price: $41,190 (configured price is $39,990, and I guess the extra $1200 covers destination fee + some other fees…)
Lease: 36 months, 15K/yr
Base Payment: $440/mo
Monthly Payment with Tax: $477/mo

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image488×752 38.3 KB

Hopefully the other details (down payment, MF, etc.) came through in the picture.
In case not:
Residual: $26,589
MF: .002271
APR: 5.4%
Total Financed: 37,213

So according to Tesla I am looking at $477/mo with tax ($440 without), with $3977 down payment, plus about $1200 in up-front fees (acquisition, reg., etc.).

Here’s why I am planning to go ahead with this lease (I’ve just ordered the car, and financing is also an option for me):

  1. I will receive $3300 in rebates (CVRP and PG&E), which offsets most of the down payment.
  2. I live in a marine environment with ocean air that eats through metal. So cars don’t age well where I live, and I’m probably parking this car outside.
  3. With EVs, I feel that technology improves rapidly enough that in 3 years, range, battery capacity, etc. are likely to improve.

I realize that at least #2 is just a personal preference. But my question for the Hackers is what you think of the current lease terms from Tesla. (As far as I can tell, they didn’t increase the cost of the lease after the Fed Tax credit was cut in half, which I think means they are absorbing it?). With the $440/month base price (considering that the down payment is offset by rebates/tax credits)… it seems fairly close to the “1%” rule for a $40K car?

Leasehackr score is 6.9 years.

Thanks for any feedback / opinions!

Cheers,
Jake

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Your effective payment is over $600

$477+(2500+3500)/36 = $650

Finance it instead.

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$650 a month for a $40k car that doesn’t have a dashboard, hard pass imo!

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4

If you finance it you will be able to shop around for interest rate and will probably do better than %5.45. Also do not forget to compare your insurance costs, will likely pay higher for tesla than comparables.

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I have also heard (from family) Tesla is a complete nightmare when returning a lease for any small scratches.

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Yes…IMO I would pass on this lease, unless you really just have to have it. There definitely is, or Canby, and emotional component in acquiring a car. Just make sure you truly feel it is worth it, and then all is good✔️

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I take into account about 100 to 150 a month in gas savings depending on vehicle your coming out of or potential to get into. What other vehicles (minus the missing dashboard haha) do 0-60 in 5 seconds for a payment of 650 a month. I know there are quite a few before people start rattling off hacker deals but now your $100 a month gas expectancy just jumped to $200 depending on how spirited you drive.

I myself will get a model 3 at some point but I want a few more kinks and pricing model worked out before I leap.

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The gas savings is a definite consideration @JD81…no doubt.

Not saying these cars are comparable in every way, but when the cost of operation is considered, some of the Bolt deals we’ve seen some of the vendors here post look pretty darn compelling!

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Agree totally @spockvr6

I guess part of me just wants to own a Tesla. I know there’s a lot of hate from wall street people here etc etc. Elon’s not a businessman but there’s no denying his genius and i want to support it.

Enjoy the car OP

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And I concur completely with you @JD81 , I want to drive a Tesla too! I just cant get myself past the lack of bang for the buck so to speak. I am hoping this may change with Tesla in the future…

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Thanks everyone for the quick feedback! I guess I didn’t expect this lease to be considered a great deal, but it’s probably less popular than I thought. :wink:

I’ve generally made up my mind to get a Model 3. (I commute 80 miles / day, so the gas savings are significant. My Volt lease at $309/month basically paid for itself.) So the question for me is really lease vs. finance (as opposed to whether there’s better value cars out there).

For everyone recommending finance as ‘a better deal’… how do you directly compare the cost of the lease vs. finance? If I finance but decide to sell the car after 36 months, it’s a question of how much less it will cost me for those 3 years? Contingent upon the price I get for selling it, of course…

I realize this may not be convincing, but for me, the fact that the car will likely live outside in a super foggy ocean environment (= corrosion from hell) makes me generally prefer leases. And I also like the shorter commitment of a lease for EV cars, as the technology changes, batteries are new, etc.

Sorry if my original post wasn’t that clear, and thanks everyone for the feedback!

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I appreciate the feedback. But it seems like it would be fair to deduct the $3300 in EV credits I will receive. So I’d call it more like $560/month (all in) for a $40K car. Which I realize won’t win a lot of fans over here, lol. But seems reasonable to factor in credits that other $40K cars won’t have.

(That being said, I would get those credits leasing or financing, so there’s no advantage to the lease there.)

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The problem with lease is the APR is too high. If you shop around for financing you can find plenty of lenders offering sub 3% for 48-60mo.

2 Likes
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I leased one of the first Volts in Texas. It was #2144, so I get why you want a Model 3. I think the lease is moderately reasonable, especially given the small price drop last week and that you’re protected on the back end against a potential residual value drop versus financing. And since the Model 3 price keeps dropping, I think that’s a good reason not to finance.

So I recommend lease vs finance.

With that said, because you (and I) already own an electric car, I don’t take into consideration gas savings since I don’t pay for gas now, and the lease is not competitive with similarly priced vehicles. For example, a BMW 530e costs $20k more but leases for $100 less per month than a standard range plus Model 3.

But to be fair, the Tesla doesn’t really have any direct competition; it’s unique and truly cutting edge. I think if you want it, you should get it and lease it (unless you own your own company in which case you have to lease it to take advantage of tax savings).

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Thanks. I see that the APR is higher than what I could get if I finance. But the difference in savings for me is not worth the uncertainty on resale value on the back end (i.e. what @Shellzj is saying). I’m sure financing would be cheaper long-term… but would also require a higher monthly payment right now, and the long-term savings don’t seem so huge to me…

So once I factor in general uncertainty for residual value, EV technology wildcards, and the specific marine environment where I live… this has made me feel good about my decision to lease.

Thanks again for the input!

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I don’t get this one…you do realize the Model 3 is not aluminum body, right? (High strength steel)
As mentioned many times here before, buy and then sell in 3 years if that’s what you want. The lease improved a bit but it’s still pretty bad. I was in the market for one too but found much better offers on other evs so i had to pass. On hold for about another 2 years.

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Tesla is the best electric for sure and I think you should get it. I am planning to get one too. I suggest you to model lease vs. Financing in an excel and post it here with your assumptions . We can provide better feedback then . I think wild card here will be the residual after 3 years. I wouldn’t worry about the climate even a bit. Tesla seems to fare well in much harsher places .

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that’s fair. i might be off… but it’s just a super corrosive environment. i’m not necessarily worried about the frame, but whether it’s the undercarriage or any other metal part… i’m used to mechanics saying "damn, it looks like this car has spent a decade with an east coast winter’ when it’s been in my driveway in CA for 2 years.

yeah I’m really trying to get a handle on how much cheaper people think it would be to buy and sell in 3 years versus doing this lease. I’ll see if I can post an excel with some assumptions. Would also welcome any rough estimates from those inclined to share.

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Obviously not a good LH score, but no other car for the money offers Autopilot and the same range as Model 3. If you want a RWD electric sports sedan, it’s the only option.

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That sums it up!