Defer vs. Cancel and re-reserve?

Defer vs. Cancel and re-reserve?

So here's my dilemma, and I'd appreciate any advice! My lease on my current car is up a year from today. I'm reservation #10,917, and while I want to avoid the price increase (in Texas, heated seats aren't worth $2500!), I will take a bath on my current car if the Model S is ready before August at the earliest. I suspect that I'm likely to get my time to build email in a month or two, with delivery in the March-June timeframe. Since you can no longer defer without getting hit with the price increase, is my best bet to cancel and immediately re-reserve? Is there any realistic risk that I wouldn't get the car by November? Should I point out this option to Tesla and just see if they'll let me move to the back of the line? Any better ideas?? Thanks!

skystream3.7 | November 30, 2012

I think that would be best cancel and get a new reservation

jbunn | November 30, 2012

I'm guessing a June delivery as well. So you have a reservation, so right now you are safe from the price increace. I think what they said was you should CONFIGURE within a reasonable amount of time after you get the notice. (your delays in configuration really don't push your delivery date back. Deliverys are still in order). So given than you are about are only about 60 days from August, I'd say give the folks a call, and see if they can take their time. I think they will be able to work somethign out. They do allow you to defer once. I would not cancel at this point until you talk.

riceuguy | November 30, 2012

@jbunn, the reason I'm thinking cancel/re-reserve is that deferral doesn't protect you from the price increase, and the "reasonable" timeframe is 4 weeks. If you do a new reservation by 12/31, you're still protected from the increase, so I'd supposedly just be resetting the clock.

jbunn | November 30, 2012

Ah, I get you.

You sure deferral doesn't?

riceuguy | November 30, 2012

According to the Tesla email. However, they note that the reason for that is that deferrals can basically be indefinite and they want to avoid that. If I defer and say that I want a delivery at some specified time, they don't really have a mechanism for holding me to it without making a price increase exception (difficult to manage on their part). So, the easiest thing from their end is probably just to move me to the back of the line now, I would think. But I'm open to other ideas!

Brian H | December 1, 2012

I think you'll have to bite the increase bullet anyhow if you need to hold off till your lease ends in a year. There's now no way to defer without it. So you have to decide if you prefer avoiding it or the lease-bath!

ChasF | December 1, 2012

i dunno. Cancelling and re-reserving in December sounds like a good plan to me. That would reset the clock and at least get you close to an August delivery.

Docrob | December 1, 2012

Hmm, if your plan is to cancel and immediately re-reserve id just call Tesla and tell them what your planning and why, they may well simply offer you a November delivery on your current reservation.

davecolene0606 | December 1, 2012

Does early termination of the lease cost more than the price increase?

Add up the fuel cost for six months, then is more?

NO: Keep res.
YES: Call Tesla, verify that cars ordered by Dec 31 get current price. Cancel res. Right before you hit your New Years Eve party re-reserve to get a higher delivery number.


Call Tesla and ask for their advice, see what they say.

Good Luck, hope it all works out :)

noel.smyth | December 1, 2012

How about you reserve a second car and wait to see when you would get the offer to build and find out when that would be delivered. Cancel the reservation that does not work with your timeframe. Or just call tesla to work out the timing as others suggest. (Would think they could work that out for you. )

MB3 | December 1, 2012

Why can't you have two cars for a few months? You may not get your Tesla for a year if you make a new reservation now. Your reservation number would be around 22,000 which is the expected yearly production. Of course, TM may increase production, but that might be wishful thinking. I'd rather have two cars than be without one for the interim.

artsci | December 1, 2012

Have you considered selling your lease? There's a whole market for trading leases. Check your lease contract to see if it permits that.

That's what I'm doing. My lease contract permits selling it to another party.

Velo1 | December 1, 2012

If the residual on your lease is a good value, and the car is in good shape, then it might be worth the time to buy out your lease and resell the car on the open market. A lot of unknowns here, but I'd suggest running the numbers to see if a buy and sell approach would minimize your losses, assuming you keep your current reservation. Tough decision, made more difficult by the price increases, but I think the increases are necessary as explained in George B's email. Good luck

Sudre_ | December 1, 2012

One other thing. I think Tesla is going to add shifts to catch up on the backlog. No matter what you do your car might arrive in about three to four months if this happens. They may never add another shift and you might end up waiting until Dec for your second reservation. They've already shown they are susceptible to delays.

I think you need to call Tesla and explain. There is going to come a time when they will start running into this more and more. I would think they would have some kind of plan in place. If not they need to get one in place. A lot of people lease.

DouglasR | December 1, 2012

Tesla gives you a limited amount of time to commit, i.e., reserve and then finalize your configuration to lock in. This doesn't necessarily mean you have a limited amount of time to take delivery. They may be willing to let you defer delivery so long as you lock in within the prescribed time period. Ask them.

riceuguy | December 1, 2012

Sounds like the consensus (more or less) is to talk to Tesla (of course, since I have all day meetings every day this week!). I have a little negative equity from the last car rolled into this lease, so getting out early would be painful. I'm willing to eat the September, October, and November payments on both cars if need be--maybe even August--but not more than that. It sounds like canceling and re-reserving is likely my best option; at worst I just do a one or two month rental of something after my lease runs out! It looks like there are about 16,000 total reservations outstanding, which makes me a bit nervous about expected delivery dates, so I will definitely talk to Tesla...

Brian H | December 2, 2012

You definitely rule out selling the leasecar, or the lease itself?

riceuguy | December 2, 2012

@Brian...yes, the value of the car is already down to the end of lease residual, and way below the current payoff amount, making it very unattractive for a potential buyer/lessor.

Brian H | December 2, 2012

Would making up the difference not be better than the bath of absorbing the entire cost?

riceuguy | December 2, 2012

No, since canceling and re-reserving has no cost...

jinglehyme | December 2, 2012

I've sold three cars out of lease - there should be a payoff amount on your lenders website. Sell the car private party at current value - have the buyer write a check to the lender for the payoff amount, then another check to you for the rest. The lender will send you the pink slip, you sign it and send it to the new buyer. Done. (this is how it works in California at least)

riceuguy | December 2, 2012

Jingle...have done that many is just a really high residual on the lease so it isn't attractive for a buyer now (or even in 6 mos), hence why I need to wait a while. The residual on the car a year from now is the value of e car today!

mrspaghetti | December 2, 2012

Have you read this post on the Bulletin Board? If not, I'd do so prior to going through the trouble of canceling & re-reserving.

riceuguy | December 3, 2012

Indeed I did, but my issue isn't that I don't want to configure or send a second $5k check; I'm fine with that. I just don't want my car built before August or after November. I'll be calling Tesla at lunch to see if there's any way to achieve that without a cancel/re-reserve, especially since new reservations now seem to have a slight risk of taking a full year to build!

Brian H | December 3, 2012

Probably not if you get in before the rush, but it's beginning to look like TM could end 2013 with more unfilled orders than it started with, even at "full" production! Oh noes, whatever will it do? :D

riceuguy | December 3, 2012

Yeah, talked to Tesla and they weren't helpful...just lots of hedging about how they can't predict when orders will be filled, and noting that all orders placed that aren't impacted by the price increase are expected to be delivered over the summer, so canceling and re-reserving wouldn't, in theory, make a big difference...they suggested a matter of weeks between delivery time for current reservation (10,9XX) vs. new reservation (15,XXX). It seems like at 400/week, that could be as much as 10 weeks difference, though. On the other hand, if I cancel and re-reserve could be a massive pain as well.

Maybe I'll just sit here and pull my hair would be less frustrating than trying to decide what to do. Most likely I'll just bite the bullet and have an extra car and payment for 6 months, though I'll gripe about it incessantly.

archibaldcrane | December 3, 2012

Cancel and re-reserve. Do it now to make sure you will get the car by November, but I really doubt you'll get it by August if you reserve a new one today (in the P15500-range).

I'm in a similar situation in that my reservation P12104 I fear will get built too quickly for my current finances and a couple months would help a lot in getting ready (the difference between maybe June and August). The wife and I are trying to figure out what to do.

Sudre_ | December 3, 2012

Plan Z.

Get your Model S and rent it out until your lease is up. :-)

DouglasR | December 3, 2012

Lock in your config, but when you get the delivery questionnaire asking for dates, tell then you will be on a three month expedition to Borneo.

petero | December 3, 2012

Riceuguy. Perhaps this solution may work for you. You do not have to wait to lease end to dispose of your car. Call the finance company and find out your pay off, then research the market value of your car. You can sell your ‘leased car’ at any time. This is frequently done, especially if you are over your allotted miles. Some cars have market values higher than the pay off, sometimes not. Condition also plays into the equation, remember you will be penalized by the leasing company at lease end for damage other than normal wear and tear + excess mileage.

If your timing is good and you are lucky you could make some money or be out less than the $2,500 TM price increase. Good luck. By the way, I had seven years of automobile sales-leasing experience. I like leasing for all the options it affords me.

GoTeslaChicago | December 3, 2012

I would re-reserve on December 30th to get the latest possible delivery date before the price increase.

Why not 11:55 pm on December 31st? Well, what if your power went out, or your internet connection died? Give yourself a little cushion, just in case.

riceuguy | December 3, 2012

Petero, I've been leasing for nearly 20 years, and have always traded in early. This usually works just fine because the dealer wants to sell you a new car and is willing to give you favorable pricing on your trade. However, in this case Infiniti had a fantastic lease special where they drove down the lease price by increasing the residual value of the car, which means what the car is worth is well less than the payoff on the lease, and will stay that way. My best option seems to be configuring as late as I can and scheduling delivery as late as I can (I do actually travel a ton, so I may be able to do that honestly!).

riceuguy | December 3, 2012

Ugh...invitations to configure went out again today and are now just 400 away from me. Time for a re-think...again!

Brian H | December 3, 2012

Do not forget that you had the benefit of the special deal and lower payments throughout the lease to date. So you're "ahead of the game" to that extent. At time of leasing, you couldn't have known the S was going to appear, and change your priorities. So on the plus side of the ledger, a few years of cheap leasing, and getting the S (earlier than expected, even). The doubled cost months are a kind of "payback", perhaps.

All the best in your agonizing!

MattK | December 4, 2012

I wonder if Tesla would let us trade reservations as I have a similar issue. My lease is up in April but I'm probably looking at a ~September delivery (15,0XX). I can extend my lease until 7/1. If we switched we'd each diminish our overlap. Win/win! :)

riceuguy | December 4, 2012

Matt, by all means, please reach out to the ownership team and suggest that. Happy to trade if they'll let us, especially since cancel/re-reserve is a bit of a pain. Let me know here if you have any luck and we can go from there if there's any willingness from Tesla!

petero | December 4, 2012

BrianH. You will never convince riceuguy that he is "ahead of the game." The good price was then, the high residual is now. Mr. Rice is a now and 9 months forward kind of guy. Perhaps he will take some solace in the words of Sir Henry Royce (Rolls-Royce, "The quality is remembered long after the price is forgotten."

riceuguy | December 4, 2012

Petero...I agree, the current car was and has been a fantastic value, and I have appreciated it (and the value) tremendously. My complaint is simply that when I reserved my Tesla I tried to time it for November delivery and it looks to be as much as 7 months ahead of the original estimate, otherwise my current car would have been a great value start to finish!

petero | December 4, 2012

riceuguy. Isn’t it ironic. The TM forums are filled with reservation holders complaining that we can’t get our “S” fast enough…and you are sad that you are actually getting yours 4 months (+ or -) early.

We should all count our blessing that we have such visionary, good, taste and are able to afford it.… and thank you for buying an American automobile, the only 21st Century Car on the market.

hatchel88 | December 4, 2012

I'm in the same situation as the OP, I got my "time to finalize" email yesterday, but the lease on our BMW isn't up for another 18 months.

Assuming a July delivery (reservation number 9297) I'd still be a year out from our lease ending. I calculated our remaining payments plus the residual and compared them to KBB trade-in and retail, and right now the best case scenario is a difference (in the red) of $5-6K if I sell private party. Canceling and re-reserving will pick me up a few months, but I don't know how much that would help.

Will be having a good talk with the wife tonight, lay out some options and hopefully make a decision that is wise and prudent.

riceuguy | December 4, 2012

Hatchel, I feel your pain. I also think July would be surprising...they are still claiming 3-4 months from the time you finalize, which would (assuming you wait the full 4 weeks to finalize) at April/May. My best guess is that there are about 10,000 folks ahead of you and 11,000 ahead of me (making some assumptions about where they slot the non-US builds). At about 400/week (they're almost there now), that's 25 weeks from now regardless of when you finalize (since that only determines where in that 25 weeks you fall). Again, that implies May (or perhaps June for me). My hope is simply that they are not as efficient as they seem to be, but every month your payoff is dropping $300 while the value only drops about $100, which puts you in the same situation as me: Every month counts!

Oh sure, I'd love my Model S tomorrow. But since I'd rather be able to afford the extended warranty, later is still better for some of us! :-)

Brian H | December 5, 2012

How much more would the price increase cost you for the same package? Waiting and re-reserving and accepting the increase might cost less.

Or not. At $300/mo, the $2500 base price increase is over 8 months!