Looks like leasing is here!
I there is more, but I see this on the webpage now that it's up.
I "hope" there is more... LIKE AN EDIT FUNCTION HERE!
Looks like leasing indeed:
Well leasing is a great factor for Tesla to win the business market.
As leasing is a key factor for getting a well calculated car fleet that holds costs that are foreseeable and manageable without putting a strain on the firms ability to meet other financial demands. No even companies can easily order a fleet of Tesla Model S's and know the monthly costs already before the lease is signed. Even the resell value is set and I am sure we will see a large increase in demand for the Tesla in the company car market. Congrats to Elon. This is yet another milestone as many skeptics just lost one of their most hard hitting argument - resell value and battery life. When a leasing company dares to set a resell value others can be sure as well.
I don't understand how the link above has people thinking TM or BOA is offering a Lease program. A bank, percentage rate, and term are specified. Can someone explain why they think this translates to Leasing?
I have a delivery date of April 15 - 29 - hope I can make use of this program. Let's see how the numbers work out.
The True Cost of Ownership page doesn't factor in the cost of the mandatory maintenance which I assume is born by the lessee. Did I miss it somewhere?
It's not a lease program. Looks like hybrid loan financing program with some kind of a guaranty option to sell back to TM at a certain price after 3 years. From business deduction standpoint, this does not help. However saying resale is like the MB-S, may push other lenders to offer third party leases
It's not a lease, but with the guaranteed buy-back it functions much like a lease except you get the benefit of the tax credits and EV sales tax benefits that aren't available on a lease.
This is good news for all current owners, especially those who hope to get into a new Model S in three years, as it helps establish the future resale market. Thank you Elon!
If you order wisely, that is, maybe a 60 versus an 85, this is pretty close to a Kia entry level cost of ownership for the 36 months. Ok, maybe add a pano and 21 wheels... now more like the COA of a Hyundai Sonata. Still...
Where's the catch? This looks like a very good program to ensure on-going demand for the vehicle. My fiancee may have just gotten lucky (luckier!). Model S number 2 is now around the corner!
If it isn't a lease, will businesses not be interested in this program then?
It must be a purchase in order to claim the tax credit. You can't claim a tax credit on a lease because you don't own it.
@jackhub - You are correct. I stand corrected :)
It really is a 66 month loan at 2.95% with buyback guarantee at 36 month mark. I'm getting 1.49% for 72 months from Alliant. :/
In many places you can claim the tax credit on the percentage of ownership. This established percentage as a real value to many.
Personally, I'm not sure how this will work out long term for current owners or shareholders.
Will it increase sales?
Will it force depreciation on our cars to 'complete' with trade-ins in three years?
I don't see this as an announcement worth tweeting a week in advance, that's for sure.
Elon, just run the company and get these things done. Stop broadcasting before the SEC comes down on you like a ton of batteries!
@shop - Unfortunately you are correct, as a business owner, I look to lease vehicles in order to expense 100% of all related costs, inclusive of lease payments.
Therefore, not interesting plan for me and many others.
Why would I want another Model S in 3 years?
I like the one I have and it'll be paid off.
That is when I reap the real rewards of ownership.
And I take it there are no third party leasing companies yet for the model S? I'm guessing the sticking point is the $7500 rebate which is a significant part of the price.
I used to lease my vehicles for the tax write-off as well. However, AMT wipes away the deduction. Unfortunately I am W2.
I do like that Elon is personally backing the guarantee. That should help overcome any anxiety that Tesla's guarantee won't be worth anything if they aren't around in 3 years. Although I am confident Tesla is here for good, some are not convinced yet and Elon's guarantee should help to assuage some of those folks.
I also like that the guarantee uses Mercedes S class as a barometer. That should help to create an aftermarket for the car.
I hope the buy-back is offered to existing owners as well.
I am reading this not as a lease, but as a purchase, with the guarantee residual value (similar Mercedes S Class) if you wish to walk away after 3 years. I am not clear on why they webpage says $500 per month statement, as that seems misleading. Am I reading this right?
We guarantee that your vehicle will have a resale value after 3 years of at least 43% of the original purchase price (exclusive of taxes, fees and accessories) of your vehicle. This resale value percentage is based on an average of the last twelve months of residual value percentage for a three year old Mercedes S550 as established by Automotive Leasing Guide.
If you put 10% down and finance 90% at 2.95% over 66 months AND make all your payments, then after 36 months the remaining balance on the loan is 42.7% of the original purchase price. Tesla with their 43% floor guaranteed value is letting you turn in the car and walkaway from the loan.
The payment in the above scenario is about $1500/month/$100,000 of original purchase price. Per the website, the net expense goes down to $500/month due to the $1,000/month imputed value of the Tesla Grin.
This would have been a good, exciting announcement, but it is marred by the creative and overly "salesy" math used to try to convince people of how much this is a "revolutionary new finance product". It sucks because I like to think that Tesla is more about substance. To the casual observer, it makes Tesla seem slimy and dishonest.
IMO, even though the media will notice and make note of it, which will bring some extra negative attention, they should immediately remove the crap calculators they have.
Yea, alot of the calculations depend on individual owners and people should already have done the analysis before purchasing, atleast i did.
I would rather hear an announcement about supercharger network expansion due to increased demand of model S.
I AMA big supporter of Tesla and Elon, but this "big announcement" is a huge disappointment. I understand that this may open up the market to more buyers but really, this is not BIG. Big would have been developing their supercharger infrastructure quicker as this would give more buyers, especially the ones who can afford this car more reason to buy... I hope he has more big news coming otherwise, I think the market will react negatively to this.
Any news about us folk up north? I know there is at least one 3rd party offering leasing in Canada, but I'd rather lease (or whatever this hybrid is) directly through Tesla.
The "marketing" math and "lease" misunderstanding was instantly accepted at CNBC. I was listening this afternoon as the chief bingo caller and Phil Lebeau "explained" the Tesla announcement in real time
" this is official. tesla is starting a lease to own program. and essentially it works like this. u.s. bank and wells fargo will put down a 10% deposit or fund a 10% deposit on a model s. and then that wouldng the monthly payment to under $500 for those who are part of the program. after three years, tesla says if don't like the vehicle or you want to move out of the vehicle, you can then resale it. and they're guaranteeing that the resale value, maria, will be at least the same as a mercedes model s. so that's the program that tesla is announcing. it will be interesting to see, maria, how much this improves sales or orders for the model s. that's a pretty big deal. most people, that's what they worry about, that the value of their car when they buy it is going to go down. right. and they're making that guarantee. they're saying it will be at least worth the same residual value as an s model from mercedes. but what does that do to margins? can you make that guarantee, really, and also make money? well, you know, you have to look at, i haven't crunched the numbers, maria, but clearly they would not be making this guarantee if they did not believe they were going to be able to hold those margins. the key here, though, for tesla, can they bring that monthly payment down under $500. we've talked for some time, maria. that's the magic line in terms of people who are out there in the market looking for a particular vehicle. if i can get the monthly payment under i'm interested in it. and that's what tesla is trying to do here with the model s"
This is a little sad, right on the homepage it says $500 per month. You are not paying $500 per month for the "financing" you are paying over $1,000 and the "effective pricing" due to not paying gas, tax credit and other discounts based on a luxury car bring the price down to $500. I'd say that's deceptive.
I'm all for leasing but don't paint that you are paying less out of pocket than you really are.
I was annoyed enough when they would list the price after the tax credit.
Still love the car and am waiting for delivery, but let's be honest to potential customers.
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