UK finance - £300/month?

UK finance - £300/month?

I saw Tesla's video on YouTube talking about finance for the US, where Musk states that it would be around $500/month with fuel costs taken into consideration. Well, okay, petrol and electricity prices are different, we have higher tax, the government incentive is a little lower, but it boils down to about £300/month.

Is this deal available in the UK, or likely to be any time soon? I'd order tomorrow if it were. It would be a fantastic deal. Otherwise, what options are there? Private finance is rather expensive in comparison.

Flaninacupboard | April 21, 2014


Are you driving a v8 petrol Mercedes today? If you are then you're probably spending something like £300 a month on petrol. So with the Model S you'd save most of that, add that onto the "£300/$500" number. A lease here is gonna be about £500-£600. More if you spec a p85+...

mojo-chan | April 21, 2014

Where did you see finance for £500/month? The lowest I could find was £800 over 5 years with big deposits (which obviously you can't pay with the grant, because that goes direct to the vendor).

Even at that price it would be a bargain. Presumably Tesla offers the same guaranteed resale value as it does in the US.

mgboyes | April 21, 2014

Well there are no RHD cars yet so it's still a bit early to say how things are going to pan out.

But there's been no mention of a re-sale guarantee. Tesla have provided recommended partners for hire purchase and business lease, but there's no option for PCP (i.e. with an optional balloon payment) since they haven't found a partner to work with them.

The leasing companies are being very cautious - the one I'm talking to says that while Tesla want this to be seen as an everyday thing like leasing a 5-series the leaseing company are looking at it like it's a Maserati or an Aston Martin, so every individual proposal is going to the CFO for personal approval, stringent credit checks etc.

The quote I have for a 3 year business lease is about £1250 pcm (for a highly specced P85, basically everything except 21" and P+).

mojo-chan | April 22, 2014

Wow. Maybe £800/month wasn't bad, and at the end of it I'd own the car fully. Petrol savings might bring that down by £75/month on top, plus reduced service costs.

Is there anyone you can contact about it? The shops don't sell the cars so...

mgboyes | April 22, 2014

£75/month in fuel savings? I'm expecting to save more than £75/week! All in (fuel, maintenance, car tax, etc) I expect to save at least £500 a month relative to my current car.

Actually I think Leaseplan's prices are quite cheap. A P85 with no options ticked at all has a P11D price of £74k and Leaseplan will lease one to you for £801 per month (ex-VAT, for a business).

A BMW 550i M Sport has a P11D price of £57k, and on identical lease terms it's £800 per month.

So the Tesla is a more expensive car but no more expensive to lease.

(Before you ask, my £1250 quote is much higher partly because of increased mileage allowances, but mostly because I have included lots of options - it's the options that are expensive to finance because they depreciate much faster than the car as whole).

TFMethane | April 22, 2014

Let a night-working Yank chime in here.

Basically, their "lease" was essentially pre-negotiated financing with two specific banks. You still actually buy the car, but Tesla guarantees to buy it back at some fixed multiple of the original value in 3 years, and the bank effectively finances the downpayment with the assumption that you will be able to pay it back with the tax credits.

As far as I know, there is no actual "lease" for the Model S. In addition, the $500 figure you mention was calculated AFTER GAS SAVINGS. The absolutely best case scenario, assuming you pay a hell of a lot for gas every month was $500.

Basically, Americans aren't so comfortable with math. So rather than slapping a sticker on the car (proverbially) that reads "$1300/month payment with up to $800 monthly savings in gas/taxes," They just called it a $500 a month lease.

Honestly, this is one thing Tesla has done a bit too much of here, in my humble opinion: Putting out best-case estimates that ultimately result in disappointed people.

But we're all so happy with the car that we don't stay disappointed for long.

mojo-chan | April 22, 2014

You would have to do a hell of a lot of mileage to spend $800/month on gas... Let's say a gallon costs $3.80 on average. Say you were getting maybe 20 MPG (modern performance saloon car). $800 = 210 gallons = over 50,000 miles/year.

Although the Model S with 85kWh battery has an unlimited mileage warranty I think I read somewhere that Tesla said it would last around 250k miles, similar to a petrol engine. So maybe 5 years @ 50k miles/year, less than their 8 year warranty. Their estimate seems to be about right as people with 70k on the clock are reporting 95% capacity remaining.

I suppose taxes on performance cars will add a few hundred/year too. Electricity is more expensive here though. It's pretty borderline though to make their numbers work.

riceuguy | April 22, 2014

@TF, actually they introduced a business lease two weeks ago:

mgboyes | April 22, 2014

Yes the Tesla business lease looks like a great product, but I don't expect to see anything like it in the UK soon, and certainly not in time for my delivery at the end of June.

Mathew98 | April 22, 2014

@mojo-chan - TM has a battery in a lab that has ran more than 500K miles. The 85 kWh battery has a 3000 full charge/discharge cycles.

265 miles x 3000 cycles = 795,000 miles for 85 kWh
210 miles x 3000 cycles = 570,000 miles for 60 kWh

Well, the electric motor can last for up to 30 years.

You need to recharge that mojo somewhere and get the fact straight...

jordanrichard | April 22, 2014

Mathew98, where did you get those figures? Also, if in fact a "cycle" means going from fully depleted to fully charged, how much longer would the battery last if one consistantly only charged up to 80% and never depleted the battery?

mojo-chan | April 22, 2014

Do you have a source for those numbers? I'd like to cite them myself.

Mathew98 | April 22, 2014

Correction: The battery should retain 80% of original capacity after 3000 cycles of charging.

A cycle is counted as 100% to 0% discharge. But most owners keep the SOC between 50% and 80%.

Let's say an S85 owners only drives 50 miles a day, it would take roughly five days worth of driving to achieve one cycle of battery usage.

Brian H | April 22, 2014

the $800/mo included gas and taxes, so not just fuel costs. But TM also counted time spent refuelling at $50/hr, or something. Tried perhaps to monetize some non-cash benefits. Valid in a way, since owners value freedom from gas station visits very highly.

mojo-chan | April 23, 2014

Do you have a source for those numbers? I'd like to cite them myself.

mojo-chan | April 25, 2014

So would anyone who has decided to get some kind of finance or loan care to comment?

Audoen | April 25, 2014

Finance companies generally rip you off.
I'm making a personal directors loan to my own company to buy the car, to avoid all the nonsense.
Because I own my own businesses, and therefore I am effectively self employed, finance companies get very iffy when assessing my "suitability", regardless of the fact that I could buy several of the cars for cash.
They'd rather lend £20k to an electricians apprentice than to a successful businessman with an exemplary 35 year track record.
As for "gas" prices at €3.50 a gallon, it's more like €9.50 a gallon here in the UK.
Why do you yanks think this Californian manufactured car is so sought after here in Europe?

azure1979 | April 25, 2014

Mojo-chang : Mattew98 is right. here is the youtube video about Tesla's battery performance.

mojo-chan | July 24, 2014

Well, it seems that the lies keep on coming. Have a look at this:

"If you take a typical £800 per month financing payment for a premium ICE saloon, the comparative monthly cost for Model S would be only £465."

Perhaps, if you do high mileage and pay the congestion charge and are comparing it to a really inefficient ICE car with high tax. The reality is though, you can't own a Model S for £465/month.

I'm really disappointed. I understand it is an expensive car, but there is no need to keep lying about it and getting people's hopes up.

For reference the best financing offer I can find is twice the Tesla price, at around £900/month.

PaceyWhitter | July 24, 2014

Most comparable premium ICE saloons are inefficient ICE's. Usually under 20mpg.

mojo-chan | July 24, 2014

A BMW 6 or 7 series is about 40MPG, and that's UK gallons so US will be about 33MPG. A 6 series does 0-60 in about 5 seconds, not dissimilar to the Model S.

I understand that in the US there are a lot more crappy mileage cars, but in Europe 40 MPG is actually pretty poor these days.

mgboyes | July 25, 2014

@mojo-chan everyone's situation is different I guess and of course the car is not for everyone. If it doesn't work for your needs then don't get one - it's not like they're short of people queuing up to put down deposits.

If you don't do many miles, or the vehicle you're comparing against is a very frugal diesel then of course the comparative economics aren't as favourable as someone who travels long distances in a large and powerful car.

But for my personal situation, where I am financing the car through my business, and replacing an Audi A8 4.2TDI, the numbers are so good that I will basically end up getting the Model S for free - the net cost to me of financing it will be completely covered by the savings in operating costs over the life of the car.

Tesla's £465 is not a financing payment quote, it's a "comparative monthly cost". I agree this sort of PR spin is a bit dubious, but clearly what they mean is that if you can lease a 6 Series for £800 then you can also lease a Model S for £800 while saving £335 a month in running costs and taxes. All of which is just taking things back to the original debate about how a car company should best explain how the TCO of its vehicle compares to the TCO of another. Monthly finance payments are only one part of the equation, but not everyone is savvy enough to realise that at point of sale.

In any case I'd still want this car even if the running costs were the same as an ICE car. It's simply a better car.

Brian H | July 27, 2014

The UK gallons are about 25% larger.

mojo-chan | July 28, 2014

I would love to buy a Tesla Model S, I'm just annoyed that Tesla and even Musk himself said I could and then it turns out that actually that was just nonsense. Saying it that way is not just dubious, it's outright misleading.

Tesla should stop making this claim. By all means point out the lower running costs, but don't lie about the cost to buy one.

SamO | July 28, 2014

cost to own one

mojo-chan | July 30, 2014

£900/month is the cost to own one.

mojo-chan | August 15, 2014

This article goes through the numbers in detail:

Tesla should stop this marketing nonsense. It's giving them a reputation for dishonesty.

420weblazeit | September 29, 2014

So if I'm 17 and I want to get a Tesla, or rather, I get one for free, should I ask for a 60kWh, P80 or the P85? I'm in the UK and I'm worried about insurance | September 29, 2014

If you are really 17 then I would rather that you get a 1.0L ford fiesta like all the other kids - the rest of us have to drive on those roads too!

adam | September 29, 2014

I would be surprised if you can find an insurance company to insure a 17yo for a £60k car - my son's insurance on a 1.1L VW Polo at 17 was about £1,800 - and a lot of companies would not insure.

Be interested to find out if you can get insured at what cost

Sandeep.patel | November 3, 2014


Can you elaborate how you are financing this through your business. I have just created my own limited and have started trading. I have my eye on a S model, thought toying between 60 and 85 (both fully loaded with sunroof, tech, etc).

There was no point buying this through the limited company so was considering purchasing this personally. Only do circa 11,000 miles a year, but imagine that would increase in such a great car.

In regards to the last blog on insurance quotes, I'm 43, 15 years no claims and the first quote I received (for indicative purposes) was £800!

mgboyes | November 3, 2014

First things first you should of course talk to your accountant.

That aside, the basic principles are as follows:

* If your company does not pay you a salary and it does not make a profit, there is no advantage to buying the car through the business.
* If your company pays you a salary on which you pay tax and national insurance, then you can instead choose to reduce your salary and have the company use the saved cash to provide another type of benefit such as a company car. This is called a salary sacrifice and the effect is beneficial to you because if you sacrifice say £1000 of your salary then the company saves £138 in employer's NI, and you save £400 in tax and £20 in NI, so the company has £1138 to spend on a car for you, while your net pay has only gone down by £580.
* Of course HMRC are wise to this, so when the company provides you with a company car for personal use, you have to pay tax in respect of the "benefit in kind" you get. The BIK is calculated by taking the brand new price of the car and multiplying it by a percentage based on its CO2 emissions. Typically around 25%. So if your company provides you with a £50k car with a 25% BIK rate then each year you are deemed get £12,500 of benefit from having the car, and you have to pay tax and national insurance on that amount. This often completely cancels out all the benefit you got from doing the salary sacrifice in the first place, which is why company cars are in decline in general in the UK.

HOWEVER the BIK rate on an electric car is currently 0%. So if your company leases a Model S you get to save a load of tax (effectively halving the cost of the car to you) and there's no BIK tax to pay.

From next April the BIK is 5%, then 7% in 2016 and 11% in 2017. But these are all still pretty low numbers - it will be highly advantageous until at least April 2017.

Three important things to note here:

1. mileage is irrelevant. The numbers are the same whether you do 1 or 100,000 miles a year (though if you lease the car of course the finance charges will be different).
2. The BIK is calculated on the brand new price of the car, irrespective of how old it actually is. This is why you never see old company cars.
3. Fuel is irrelevant for company owned EVs. Electricity is not classed as a fuel by HMRC so the company could provide electricity for you without there being a tax charge, but equally the cost of fuelling a Model S is so low it's probably not worth trying to get the company to part-pay your electricity bills.

Finally there's an additional benefit which really only applies if your company is profitable enough to be paying corporation tax. Usually when you buy a car you can only allow a part of its value per year against profits. But with EVs this is 100% in year 1. This is really just a cashflow benefit; you end up with the same amount of money at the very end of the arrangement, you just pay less tax now but more in the future.

Anyway, you should talk to your accountant!

biff | November 3, 2014

@420weblazeit just for fun I asked my insurance broker how much extra it would cost to add my 20 yr old daughter on my insurance. He just laughed and told me couldn't give me a quote for that.

veryannoyingname | May 5, 2015


Thank you for that very lucid explanation.

One advantage that hasnt been mentioned anywhere is that many employer car lease schemes have a flat rate of insurance payment even when friends and family drive the car under the policy for a very small extra fee. Effectively it is the cheapest way of insuring children that are new drivers and spouses that have poor driving history and high insurance premiums. So the employer car lease schemes take the hit for having additional drivers with higher risk insurance and person who leases gets a flat cost lease irrespective of family members driving history and are approved to drive car under the lease scheme. Hence the popularity of lease schemes in the NHS in the UK.They often are too busy to take phone calls or get delayed reply to emails.

Anyone have a clue of example costs for 70D model under salary sacrifice schemes in the UK (NHS employers preferably). My employers lease provider seems to have crossed wires as they couldnt find Tesla on their systems and wouldnt quote! Need to chase up just to have some idea how Model X lease costs would be. They cant quote on that as presently only preorder and no list price and they dont know how to go about pre order for the model x via salary sacrifice lease car scheme.

Digging up an old thread instead of new thread as seemed more relvant to keep information on one thread.

veryannoyingname | May 5, 2015

my guess working out the numbers for benefit in kind for the 70D model costing about 55k and additional accessories for another 5k would probably be around £700 a month net after taking into account income tax savings etc

Brian H | May 5, 2015

RU serious? £8400/yr?? Sounds about an order of magnitude too high.

vpoz | May 6, 2015

@veryannoyingname figures sound about right

Brian H | May 7, 2015

Ya, sorry. Sleep dep confusion with monthly rate.

Brian H | May 7, 2015

Correction. Was right the first time. About 10X too high.

vpoz | May 7, 2015

With how much fun the car is, would the 20 year old ever get to drive the car?

james.mcadam | June 5, 2016

I'm struggling to get finance for my vehicle. Tesla are too busy lending to business only instead of helping normal people like me. Im looking around to find other options but am struggling Tesla are as good as useless in recommending other lenders, only good option I've really found is Lease Plan Go but price is sky high, although acceptable over the period. Anyway I'm trying to find info about 2 things;

1: can anyone recommend any lenders out there who deal with personal and not business in any way including the typical director link.
2: and what are Teslas business lease terms, ie how long is the business operating, capital, revenue, all that stuff etc etc, what is the minimum they will lend too? Anybody got a finance example or terms that I can look into.

Thanks in advance.