I'm kind of stuck and would like to see what you guys are doing. My biggest concern is the Model 3 being new to production and could have some problems associated with it.
Cool. Wait three years, then buy a used one off-lease as a CPO. Sorted.
I'm looking at both lease and purchase options. It all depends on the specifics when the M3 is released
Will probably be lease for me so i can move to model Y afterwards
I drive 50k miles a year I will be buying. The mileage penalty would kill me on turn in if I leased.
If the inspection and test drive of an actual Model 3 is good, then we will buy, as we tend to keep cars a long time. Keeping our Model S, too.
Just curious why anyone would consider a lease? No leasing company will buy you a car and charge you less than what it costs them. Is it because people just don't like the hassle of selling their used car or trading it in?
Leasing is good if you don't drive much and plan to turn over the cars fairly quickly - every 2-3 years. If you drive more or plan to keep the car longer, purchasing makes much more sense
Agreed eeb. If you keep mileage down, the lease would definitely be the way to go (and reduce the risk if that is a worry). I am quite sure they will stand behind the product. I cannot wait to see the configuration tool.
eeb9: My argument is typically that if I drove less than 1,000 to 1,250 miles per month (12,000 to 15,000 miles per year) I wouldn't need a car of my own at all. I could walk, ride a bike, take the bus/train, or now use Uber/Lyft instead. I certainly would not choose to lease in that situation. The 'cheap' leases on electric vehicles, those at only $100 to $150 per month are even more restrictive, allowing only 10,000 miles per year. If the Tesla Autonomous Fleet were similarly priced for an unlimited miles monthly subscription, it would potentially be less than the cost of a monthly bus pass in Los Angeles, while being more convenient.
Simply Red: Thanks for the effort to bump legitimate threads. However, I just blocked the offending poster of the Korean SPAM in Chrome, and it all disappeared. I know it is still there, but I can no longer see it. So all is well. ;-)
I've always been the type to buy my cars, but the rapid rate of new technology in Teslas would make me consider it. I have a lingering fear that full self-driving might not be possible with AP 2.0 hardware. I'll probably still buy though just so I can go on as many road trips as I want. The wife will likely get a Model Y after her Mini Cooper lease is up anyway.
I have always bought. We put on too many miles for a lease to work. Plus we keep our cars a long time. I'm not too worried about changing technologies. The regular updates will deal with most of it. FSD is a secondary consideration anyway. The rest will be everything I could need.
Buy and may be the last large purchase I'll ever make depending how long I live. Can't afford many options but I'm sure it will be best car I've ever owned.
lease here if the Federal tax credit can be applied to the car price via Tesla taking the credit and lopping 7500 off the top.
Nissan did just that for my Leaf 3 years ago. Nissan finance took the credit and passed the discount to me. So my lease is based on a 34,000-7500=26500 price.
I didn't have to "qualify" with a 7500 tax burden in order to 'redeem' the credit at tax time.
Anyone know if Tesla leases work the same (or will work like that for Model 3)?.
I always buy my cars. Like most have commented, we drive too much/year for a lease to work and we keep the car for a long, long time (>10 years).
To all, my standard warning about leasing:
You WILL drive your Tesla more (if not way more) than your current gasoline powered car. You can take that claim to the bank.
I'll be buying, even though I should probably consider leasing due to low mileage (Model S will remain our distance car) and the very real possibility of being seduced by a Model Y in the short term.
I will buy and hold (just like my Tesla stock)
This will be my very first lease ever. Normally I buy outright and sell via private sale, but Tesla has introduced the cell phone model to cars: their hardware technology advances so quickly that I'm going to want a "new every two".
Xerogas - that is exactly the reason I'm considering (for the first time in a long life) an automotive Lease.
Well, that and the fact that - by the time I actually take delivery - my daily round-trip commute will have dropped from 80 miles to 10. That gives me enough wriggle-room to take on a 15k mile/year lease and have enough room for playing on the weekends.
This'll likely be my first lease.
Buy and hold. By the time Model 3 comes to Australia, you guys over in the USA will have worked out ALL the bugs and ALL the options will be available. You are too kind to us Aussies.
Neither, I will be selling. Once the first 300K Model 3s are being delivered my May 2016 Model 3 reservation number will be more attractive. At that time I can resell my reservation for the initial cost. After 3 years ownership of a Model S, the last thing I want is a cheaper version of minimalistic luxury.
The only time Elon Musk ever mentions the word 'cheaper' is in relation to the cost of filling up with electricity instead of gasoline.
@Plains - do you like the S? I'm curious - if you like the S, what is it that turns you off about the 3?
Granted it loses by comparison, but that's mostly the difference between a $60k and a $120k+ (fully optioned guesstimates) car.
I wouldn't want to compare. 7-series BMW against a 3-series for the same reasons. :-)
On the other hand, I *am* looking to see how the M3 does against other cars in its target segment - 3-series BMW, Audi A4/A6 and the like. 4-door entry lux cars in the $35-60k (base to fully optioned) range.
I expect for the M3 to blow those away when taken as a whole. I'll admit that I'm not completely sold on their interior esthetic but I'm withholding judgement until I can actually sit in one to both see and feel how it works
Tesla is not a 'luxury' car company. They sell expensive, performance, economy cars. They cost a lot to buy, are fun to drive, and don't burn any gas. The Model 3 is their first attempt to build an affordable/attainable, performance, economy car. It won't break the bank to buy, will be fun to drive, and won't burn any gas.
Ummm... I have to argue the "economy point". Just a little bit. A car that *starts* at $35k, seats five and has four doors is dead-center in the entry luxury market, whether they want to be or not.
$35k is more than most people can comfortably afford. It's a stretch - particularly when you start adding options. Pricing at this level is at the very tippy-top edge of "mass market".
I'm fortunate enough to comfortably afford a M3, and I could stretch a bit to afford a nice MS - but I'm in the top few percentage points of wage earners in this country.
We all have to remember this - Tesla positioned their cars very deliberately in these markets. They know *exactly* who their competition is, and it ain't Ford or Chevy.
seems the average cost of most things these days is high. so it goes with economy cars too. $20,000 seems expensive for a Civic, right? and you still have to buy dead dino goo for its entire life!
35k for a new state of the art techno wonder that doesn't burn fossil fuel? That seems about right. It seems about right for A LOT of people based on $1000 reservation numbers. the market is ready. Go Elon!
Fin - not arguing the value of a M3 at all. We both agree on that.
I was only quibbling with trying to classify it as an "economy car"
Elon is - I believe - out to beat BMW, Audi and Mercedes (along with Lexus and Infiniti for that matter) on their own turf.
Tesla isn't competing with other EVs - that's not a way to win their biggest battle. They need to make a case that's compelling even to die-hard ICE fans.
They won me over - and remember that the car I was closest to buying when the M3 was announced wasn't an EV - it was a Caddy CTS-V Wagon (yes, a 550+ HP station wagon, albeit with a track-tuned suspension). They have to fight that same battle with every ICE die-hard out there. And win.
Making the best EV won't do it - they have to make the best *car* in their segment.
When the average new car price is hovering above $33K now, $35K isn't that big of a stretch.
eeb9: Once, many years ago, I went on vacation. While I was away, I left my car keys with my Aunt. When I got back, she and her Boyfriend had taken a trip of their own, making a run to Las Vegas and back. He marveled at the fuel economy of my Honda Accord, smiling brightly as he said while handing me the keys, "It don't burn NO GAS!" At the time his own car was an older Cadillac gas guzzler, so I'm sure it clicked for him how fuel efficiency directly related to fuel economy. They also were each surprised at how easily the car got to 80 MPH and more, catching them unaware many times. So, having that level of fuel economy along with unexpected performance also opened eyes.
I fully expect that sort of revelation is on the way for people who are exposed to the Tesla Model 3, all over the place. And there is a definite point of inflection where the phrase "It don't burn no gas!" will become instead "It don't burn... NO gas?!?
See, the vehicles we typically call 'commuter cars' today were previously called 'economy cars' instead. And economy cars were thought to be wimpy foreign vehicles that could go further on a smaller tank of gas and thus cost less to operate during the week. People would often still own a 'real American car' instead of such 'little toys' to be operated as the 'Sunday Go-to-Meetin' car.
As Honda, Toyota, and Datsun/Nissan began to offer larger vehicles, Americans found their daily driver also saw use as a weekend car too. And GM went from around 53% U.S. market share in 1976 down to only 35% in 1985, and barely over 17% in 2016. Oops.
My point is that you don't have to build a 'cheap' car to offer an 'economy' car. In many cases a $35,000 electric car will cost less in total ownership costs than a $25,000 ICE vehicle over the course of five years, and the ratio goes even further in favor of EVs over ten years. If it is OK to buy a $25,000 ICE car that gets 35 MPG or less, then it is just as affordable or more so to get a Model 3 instead.
Another point to consider is that 'cheap' cars with a starting price under $15,000 really don't sell very well at all. In 2016 only the Nissan VERSA sold over 100,000 units in the U.S. among 'cheap cars' and reached the top 35 among passenger cars. It will be outsold in 2018 by Model 3, and has previously been outsold by BMW 3-Series.
No one who builds new cars for sale does so for the sake of courting 'most people'. That is an economic impossibility, an unfair proposition to saddle Tesla with, a total red herring straw man rinky dink unfounded non defensible ramshackle go to argument employed too often by Tesla Enthusiasts and EV Naysayers alike. Because the fact of the matter is that 'most people' buy used cars each year -- not new. And those used cars average over $19,000 each and over ten years of age, while new cars average over $34,000.
Traditional automobile manufacturers will likely abandon the sub-$15,000 marketplace before 2020, just as they previously did at sub-$10,000 and sub-$5,000 price points years ago. They won't be able to survive otherwise, even if the current POTUS gives them leave to build clean coal fired vehicles as part of the 'AMERICA FIRST' rationale.
Yes. Tesla very deliberately positioned the Model 3 at a $35,000 price point. Yes, it will be 'entry level luxury' vehicles that will be its primary competitors. But just as Model S inspired VOLT and PRIUS owners to move 'upmarket' to acquire it, when they would not have done so for S-Class, 7-Series, A8, or Panamera...? The Model 3 will encourage defectors from the ranks of Accord/Civic, Camry/Corolla, Fusion/Focus, MALIBU/CRUZE, Sonata/Elantra, Optima/Forte, Altima/Sentra, et al shoppers to go upscale to buy a Tesla -- when they wouldn't have done so to get a 3-Series, A4, ATS, or C-Class. Further, some may well choose to save some dough and get a Model 3 instead of a 5-Series, A6, E-Class, or GS. All while still getting LEAF, VOLT, PRIUS, and BOLT shoppers too. It ingenious and will solidify that the Model 3 is absolutely an affordable, attainable, economical car to buy and to own.
It will be a long time before a used Model 3 is ten years old or more and cash be bought used for less than $19,000. That's when 'most people' will be able to afford one. That is, if they aren't just using much newer cars through Tesla's autonomous fleet service by then instead.
Red - no arguments on the majority of your points.
Average new car prices do indeed hover just below the entry point for the M3 - that's deliberate. A lot of people - especially while the US Tax credit is still in-place - will be able to stretch just a bit to buy a M3. Not quite enough to really call it "mass market" but close.
Thing to remember that $35k is the *starting* point. We all agree that many/most will want something a bit "more" - upwards of $20k more in some cases. That's one of the things that kept me away from the Model S. Getting a MS set up the way I wanted cost more than I was willing to spend, so I took a deliberate step down-market. I'd rather have a lower-tier car with all the bells and whistles than a base version of the next step up. Admittedly, that's just me - your mileage will vary considerably! ;-)
Agreed also on the total cost of ownership. even though electricity isn't exactly free, it generally costs less than the equivalent amount of gas (and even less when oil changes and such get factored in)
But - those costs are spread out over years, whereas the purchase price hits ya *right now*
So we're not really that far apart on our viewpoints, it's just a matter of emphasis.
Even Tesla, on their M3 page, refers to the M3 as a "Premium Sedan" - they know their market. They know that the M3 isn't competing with the Chevy Malibu or even a Bolt... they're a deliberate step up-market from there.
Hmmm... now if Tesla did a MS Wagon.... with the same wheelbase and a slightly narrower track so it would actually fit in my garage.... and ludicrous mode...
I'll just keep dreaming... ;-)
eeb9: The difference is that at the $35,000 price point, Tesla intends to offer a vehicle that is better than 'all of the other cars'. Primarily their premium competition -- which are already presumed to be 'The BEST' ICE vehicles available for the money. By targeting the long reputed 'Best of the Best' in the BMW 3-Series, the Model ☰ can immediately grasp points as being the undisputed 'KING of ALL VEHICLES', Howard Stern style. I'm hoping that upon taking the title, BMW is forced to give up the whole 'ULTIMATE DRIVING MACHINE' spiel.
Yep - exactly my point. I look forward to Tesla beating BMW on their own turf.
Bump over Koreans
I purchases an S back in 2013, and then sold it in mid-2016. I did much better on resale than I would have with a lease -- and I never had to worry about driving over my miles allotment. To me, purchasing is the way to go -- especially since the initial 3's will likely be in high demand with resale given the backlog of new orders.
Leasing is more expensive. Just put yourself in the shoes of the leasing company and you will see it. The leasing company is the owner ... they will always charge you more than the car costs them.
Lease for me. No brainer.
I drive 500~700 miles a month as I typically bus to work. Even in a new EV during the honeymoon phase, last thing I want to do is sit in gridlock.
Car tech/performance/safety improvements are happening so fast, I expect to change cars every few years.
If I don't like the M3 for some reason, I can always do a lease swap. M3 will be in high demand and I'm sure plenty of people will gladly take over the lease.
If M3 can be had with an ultra low mileage lease, something in the mid to high $300/mo with typical $2k - $3k cap reduction, I would gladly jump on it.
Also, I don't have to wait until 2019 for the tax credit (assuming I get the car in 2018 and tax credit is still in effect.)
when we are expecting delivery.
borodinj: That is a good point. Especially true if Tesla's backlog of Reservations grows to around 2,000,000 units by this time next year. ;-)
I guess its official ... leasing is a no brainer.
Slight tangent. Airplanes have long had a strange resale value. The tend to sell for about what you paid for them. The history of this was mostly during a period of higher inflation rate than today, but I often wondered if cars would ever do the same. I figured if they did it would be because of outrageous inflation but EVs have me wondering this anew. Electric motors have always had a higher reliability than ICEs, and with the possibility that as more new features can be added via software updates, EVs have the possibility to come closer to holding their purchase value.
Okay, back on topic. I'm buying. My family owns two 12 year old vehicles and one 24 year old one. We're not typical.
Although I could probably survive with a lease (I have for the past six-ish years), I've wanted a Tesla for the past 10/11 ears. I plan on financing less than half the cost and driving this car into dust.
How can this be the last car I ever buy, if I don't _buy_ it? It will be only the fourth.
Thank you kindly.
I'm not a fan of leasing for personal (not business) use. I've only leased a vehicle once, when the manufacturer's assumption of residual value was so high that it was a no brainer (they play games with residual value when they want to move cars).
I assume Tesla leasing does not play the usual leasing games. It used to be you were charged a security deposit, which you got back when you returned the vehicle in good condition. Now they loudly proclaim no security deposit, but charge you an acquisition and disposition fee. Disposition fee? I thought that was the whole point of leasing.
And with most leases, you take a risk with mileage. Estimate to high and you overpay per month. Estimate too low and you pay a big mileage penalty. With leasing, you avoid the hassle of selling or trading in the vehicle, but you pay for that privilege.
Leasing has it's advantage. The earlier tip about leasing if your don't have a tax liability matching available Fed EV credit at time of purchase is brilliant. And for a business, leasing gives you more write offs. But...
I am leasing right now, for the first time in years, and learning the ins and outs of how they try and screw you these days has been quite enlightening. The dealer/lease company has a number of levers to pull to extract additional money from you at lease end, even if you turn in in the car within the mileage agreement. Here are a few examples:
1) Wear and Tear. My lease agreement states a degree of wear and tear is expected. It further states you may be held liable for damage above the wear and tear norm. What's the threshold for wear & tear vs damage? There is none. It's a judgement call. So at minimum it seems that is a potential can of worms that may result in time, emotional upset, and maybe $$ out of wallet.
2) "Refurbishing fee". When I signed my lease the finance gal at the dealership went over the numbers verbally before I signed. However, upon reading the fine print of the contract at a later date, there is a $500 Refurbishing fee applied when you turn the car in. Thanks for that. So the dealer is putting the customer on the hook to pay for at least a portion of the cost to prepare the car for sale (new tires, detailing, etc.).
3) "Diminished value". This is another potential can of worms if you get in a collision. If you go through insurance (yours or the idiot who hit you), it's likely the body shop will report to Carfax. When you got to turn in the car the dealer may pull a Carfax report. Collision damage, even if the car has been 100% restored, may give the dealer cause to apply Diminished value, and you will be on the hook for the difference in expected residual value.
Personally, I won't decide to lease or buy until D-Day. Based on lease vs loan terms, tax liability, and a few other factors, I'll make up my mind at the time. Leaning toward a loan if expected resale value of the M3 is not trailing down.
I would *hope* that Tesla leases have a better "flavor" than those offered by other automotive retailers.
But I don't know if this is true.
Is there anyone here who can speak to the Tesla Lease experience?
In Ontario Canada we get a $14000 tax free incentive to purchase an EV. When you lease for 3 years you get the 14 k as well. Goes a long way to reduce your monthly lease cost.