Tesla Cybertruck lease buyout

[voxel]

I received my $80K Cybertruck lease contract today and want to confirm the language in the contract allows me to buyout early at the adjusted cap cost without any funny business. Half of the $15K cap cost reduction is the $7500 (commercial/45W) EV tax credit.

Here are the pertinent sections:

32. PURCHASE OPTION. You may purchase the Vehicle from us if you are not in default, on an AS-IS, WHERE-IS basis, at any time before or at the end of the Lease Term. To purchase the Vehicle, you must pay the sum of (a) the amount in Section 14 if you purchase the Vehicle at the end of the Lease Term, or the Adjusted Lease Balance plus the purchase option fee in Section 14 if you purchase it before the end of the Lease Term, plus (b) any related official fees, such as sales tax, other taxes, title, tags, license and registration we are required to collect, plus (c) any past due Monthly Payments and any other amounts you owe under this Lease. If you purchase the Vehicle, you will transfer title, re-register the Vehicle and remove and return the license plates (if required by law) within 30 days after purchase or any shorter time required by law. You will sign any additional documents necessary to effect the purchase. We may, at our option, apply any credits or security deposit under this Lease towards the purchase price

(3) Adjusted Lease Balance: The Adjusted Lease Balance equals the Adjusted Capitalized Cost minus the sum of all accrued monthly Depreciation for each Monthly Period before termination of this Lease and the Monthly Period in which this Lease terminates.

14. Purchase Option at End of Lease Term. You have an option to purchase the Vehicle at the end of the Lease Term for $ and a purchase option fee of $ , for a total of $ . The purchase option fee does not include fees for tags, taxes or registration

[z0lt3c]

I’m not a lawyer, but that’s better defined then then many other lessors. I don’t see any room for funny business, any pass-thru incentives are baked into the adjusted cap cost. See the buyout screen I shared here. Thanks for sharing the contract.

[mllcb42]

@voxel

Half of the $15K cap cost reduction is the $7500 (commercial/45W) EV tax credit.

Let’s be pedantic for a moment in regards to this.

$7500 is an incentive from the bank. They claimed a tax credit under 45W and then passed an incentive on to you, but from a contractual standpoint, it’s no different than any other incentive because it’s just an incentive as far as you’re concerned.

[delta737h]

What matters most is translating the language of the contract into accurate mathematical statements so that the lease balance and buyout amounts can be calculated accurately. Most, if not all, of the finance captives compute the adjusted lease balance and constant yield rate as follows…

PV and RATE are Excel functions where RATE is the monthly rate or monthly lease amortization rate. In words, the ALB is the present value of the sum of the remaining base payments (pretax) plus the present value of the residual discounted at the constant yield rate. All you need to do is plug the numbers in the formulas. BTW, payment in the RATE formula is the base (pretax) payment.

Buyout = (ALB + POF) x (1 + sales Tax Rate) + other applicable taxes/admin fees

POF = purchase option fee which is taxable.

EXAMPLE:

Suppose you elect to terminate your lease with 11 payments remaining. First, compute the constant yield rate (CYA) or actuarial) which is the same thing as the lease amortization rate as follows…

Annual CYR = 12 x RATE(24, 1164.03, -65235.00, 59988.75, 1)
= 14.383% YIKES!

Your money factor = .00755… way too high! I’d bail out of this lease unless you’re buying this car out within 30 days or so of lease signing!

At any rate (no pun intended), calculate your ALB as follows…

ALB = PV(0.18383/12, 11, -1164.03, -59988.75, 1)
= 62631.44

Buyout = (62631.44 + 150.00) x (1 + sales tax rate) + applicable fees and other taxes

If you buyout your lease within 30 days of signing, your ALB = 65052.48.

No funny business but the devil is always in the details if you’re not careful. I’ve seen fund providers miscalculate the ALB more than once.

[jteezy386]

Can you explain the $7500 lease credit?

online for me it say $11,500 down to get the $899 payment

is that actually $4000 out of pocket? or is it $11,500 out of pocket… im not understanding.

Thanks!