Forums

Purchase after lease expires?

Purchase after lease expires?

I have a lease on a 2017 Model S 75D. The lease is up in early May. It currently has about 51,000 miles. I like everything about the car and am leaning towards purchasing it. I have only noticed a slight deterioration in the vehicle range.

Does anyone know of any compelling reasons NOT to purchase?
Is there any consensus on the expected lifespan of the battery?
Once the battery dies, what is the cost of replacing the battery?

Thanks!

jordanrichard | 14 February, 2020

No one knows what a new battery costs. All MS battery packs are still under warranty.

akikiki | 14 February, 2020

Old tech by new S standards?

TesMD | 14 February, 2020

There are many drawbacks to purchasing a leased car especially a Tesla. The residual value on your lease car is way higher than a car with same tech as your car. You probably can purchase a car similar to yours on open market for thousands less than your residual value.

That is the main reason that I when I was in same situation last year, I opted to purchase a new car.

Also, note that in 2017, there was 7500$ federal tax credit that your lease company got instead of you, so the price of your car was 7500$ less than what you actually paid for.

2015P90DI | 15 February, 2020

Clearly you're over on mileage. Don't know if you went with 12K or 15K miles per year. Another three months to go, should put you in the 55,000 mile range. $4,750 charge (yikes) if you only signed for 12,000 miles per year. $2,500 if 15K per year.

Typically, as stated above, due to Tesla's high residual values, it's almost always not worth purchasing.

From experience, as with everything, Tesla does NOT negotiate. I tried, others have tried, to no avail. I offered $55,000 for my car. They wouldn't even consider it. It was listed around $50,000 as a CPO a few months later, and they had to include a 4 year warranty, which I wouldn't have gotten if I purchased it. Plus whatever service they did.

I wouldn't worry about the lifespan on the battery so much in making your decision. But, I would worry about driving ANY Tesla outside of warranty, which you're already out of. While they're mostly, reliable cars, Tesla is not at all cheap when it comes to repairs.

Your battery will continue to degrade over time. As do all batteries. Your range will decline over time, as it will for any used Tesla. A battery replacement for your car would probably be in the $25,000 range. Although, you likely could find a used one from a salvaged vehicle for less.

I am simply recommending, do all the math to be sure it makes sense. If your case is anything close to mine and others, your residual value is notably higher than what the car is worth. If you buy it, you take it as is. Look on Tesla's CPO website. Chances are, you'll find several offerings of the same year car / options as yours for less than your buyout price. Keep in mind, depending on what state you're in, you'll possibly have to pay sales tax on that price as well.

55,000 miles, while for a Tesla isn't that bad. However, in terms of the used car market, it's a relatively large number for a 3 year old car. Most high mileage Tesla's sell at significant discounts from outside dealers or private party. Thus, you need to consider resale value if you ever do want to unload it. The CPO's on Tesla's website, generally have far less mileage for lower prices.

So, check your figures. If you can buy a CPO with 30,000 miles for the same price or less than the cost of buying out your car, what makes more sense? Second, if you buy a CPO with under 50,000 miles, you get a 4 year / 50,000 mile warranty included with it, from the date of purchase. So that gives you 50,000 miles of worry free driving. Again, likely at a lower cost than your buyout.

Also, keep in mind, Tesla significantly lowered their prices last year on the Model S. My 2019 Raven was $20,000 cheaper than what my Dad paid for is pre-Raven Model S (same LR version) just a few months prior. That $20,000 trickled down to the used car market. Hence, all Tesla's instantly became less valuable, including yours, mine and everyone else's. Yet, your residual value did not decline with it. So, unless Tesla somehow (unlikely) changed their mind and are now willing to negotiate buyout prices, it's almost always a bad deal to buy out a leased vehicle at the residual price.

That's the answer to your first question.
Second and third questions, not really an issue to worry about. But, should have to replace the battery at $25,000, you just paid more than half of what you likely would pay for a complete used car with a 50,000 mile warranty. If a motor goes out, probably about $8,000. Screen, I think is in the $2,500 range. Door handles I've heard can be over $1,000. Point being, they're costly to repair if they break. Fortunately they don't break too often, but it only takes once to wipe out any benefit of saving a few bucks on the purchase of the car. Although, assuming your residual to be higher than the value, you likely won't even save those few bucks at the purchase.

Either order a new one and enjoy the benefits of the Raven version, which are notable, or go order one of the CPO's on their website of any version you choose.

https://www.tesla.com/inventory/used/ms

Best of luck to you.

Bighorn | 15 February, 2020

Don't get in the weeds about battery replacement. It's not something that's going to come up with that low mileage a car, plus you're only half way through the warranty. Door handles now run just over $300 to replace, but I imagine they'd be tacking on an extended warranty that renders the expenses over the next 2 or 4 years moot. Whatever premium you'd pay above the used lot may be worth it to get a car with an unparalleled history, both in how the car has been treated but also reliability. You'll never have that peace of mind with someone else's seconds. My main reservation would be about whether the range suffices and history should have informed you of that by now, unless you're approaching a life transition that will change your driving habits.

2015P90DI | 15 February, 2020

I don't necessarily disagree with BigHorn's comments about knowing the history of the car. All depends on how long you keep cars. Me, I don't keep them out of warranty. Three years generally and on to the next, hence why leasing works so well for me. Same thing though if I purchase a used car. My thinking at that point is: If it has a warranty, is a fairly low mileage car that is clean and looks good, then, who cares what the car's history is. If it breaks, its covered under warranty. Not my problem. I'll be unloading the car before the warranty is up anyway.

For those that keep cars longer and outside of warranty, naturally your thinking will be different and the car's history may have some relevance.

AERODYNE | 15 February, 2020

BH...based on your experience, what percentage of cars about 4-6 years old, with between 50 to 100k miles, have had major issues with drivetrain, battery, suspension, or MCU?

My take is, esp with the restrictions on buying used from Tesla, I'd rather stick with the "Devil I know"

In other words, "If you like your car, you can keep your car". Even if the MCU will crap out one day...

NKYTA | 15 February, 2020

@AERO, I can only give you data on cars older than seven years at 112k miles, an N of 1. ;-)

New ceramic bearing at 28k miles - drivetrain.
New refurbed HV battery at ?44k miles. Water intrusion, very uncommon.
New MCU1 shortly thereafter.
7 door handles. ;-)
No suspension issues.

For cars less than four years old, most of that list goes away, I expect.

Bighorn | 15 February, 2020

Lots of these things have been sorted with quality improvement over the years. All the early cars had drive unit issues because of metal bearings. A switch to ceramic bearings took the longevity from 25k miles to at least ten times that. Early batteries seemed to last about 200k miles and they’re aiming for 300-500k since. Suspension is more subject to road conditions and damage from poor tarmac. The list of MCU failures seem to occur after the 4 year mark. I don’t know what’s been done to improve the quality there though my MCU1 replacement functions much quicker than the original ever used to. Personally, I try to keep cars past the steep part of the depreciation curve, but that’s my frugal nature.