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Observations on financing from an early adopter...

Well, I've put down my deposit... I'm surprised that I haven't done this sooner, but it's a more expensive purchase than any vehicle I've ever bought. As an early adopter, I had the first Segways in Arizona (ended up having 4 of them), the first Prius in Arizona (ended up having 6 of them), and the first Volt in Arizona (now have 2 of them), among many other "early adopter" firsts.

So, with the Tesla, I'm trying to figure out the proportionate financing costs.

* ~$30K Prius (all costs/fees/taxes/etc included) lease - with the Prius, each one I've had has had a down from $0 to $2000 with lease payments from $169-229/mo (not including taxes, I've had 6 and don't want to dig up that information) depending on the special at the time.
* ~$50K Volt (all costs/fees/taxes/etc included) lease - $0 to $2000 down with lease payments from $388-438/mo including taxes.

So...
* ~$75K to $100K Tesla... (all costs fees/taxes/etc included) lease/purchase.... so why isn't this proportionate to the vehicles above? It should be around $600-$750/mo, with just around $4-6K down, out the door... but I just can't wrap my head around why this doesn't happen. I'm guessing it's because the program isn't truly a lease program, which has a significant impact on this amount.

While I make a decent living for myself and could afford a payment on whatever comes, I'm just hitting this wall of price resistance and as someone who drives about 9K miles a year, I'm not sure I want to spend ~$2 for every mile I drive a car...

I'm great at rationalizing things I want to do and want to have, as long as I can be rational. Can some of you throw out some "it's only" scenarios for me... I'm really close to completing my purchase, and I'm sure the financing stage of this is just a few weeks away.

Thanks!
Ben Bethel
The Clarendon Hotel - Phoenix, Arizona

Because the car is so much nicer than any you list?

You need to cut Tesla some slack. At $250k it would be the best car in the world but too much for me to afford. At $30k it would not be the best car in the world, either limited by range, performance, technology, safety, etc. I really appreciate that they managed to price it under $100k.

Hi Ben,

No offense, just because I find it an interesting fact:

Why would you have 6 Prius's at the same time given the fact that you can only drive one at the same time and you drive just 9k miles per year?

@benbethel - You're correct, it's because it isn't a lease really. Most people are latching on to it and calling it that, but it just isn't. It's full blown financing with an early out and guaranteed residual. So you pay full financing rates.

I definitely agree it's nicer than any I listed there, but what I'm talking about is proportion of sticker price to payment cost...

If something that's $50,000 can lease for $289-369/mo, why can't something $100,000 lease for twice that...

Perhaps I'm just dreaming. ;-)

Because it's not a lease. It's financing with a guaranteed buy back after 3 years. (Or you can keep it at that point, which is usually when the depreciation curve flattens anyhow, so if you want to hold onto your car at that point that might make sense too.)

For the same reason it would cost more per month to buy your house than to rent it.

So why are leases cheaper?

When you pay off the loan, you own the car and don't have to pay any more. Leases make sense if you plan to keep the car only a short time.

A big part of this is the difference in residual value. There is a big market for a used Prius and it has a residual around 60%. The Tesla residual is 43%. So you're really comparing 60% of 30k = 18k and 43% of 100k = 43k which means the part you're paying is 12k vs. 57k or nearly 5x more for the Tesla even though the car is only 3x as much.

Make sense for me with 32000 to 35000 miles per year and over $600/month in gas cost only + all other maintenance cost an ICE car needs.
What Tesla offer right now is not a real leasing as you have to finance for the total price of the car. If you wait 3-4 month, Tesla will for sure setup a real leasing program. They wil need more order soon. They claim 10000 reservation holder but also claim 1-2 month delivery time after reservation...Doesn't make sense at 500 cars/week. So they don't really have 10 000 customer waiting for their car right now.

But with 9K miles per year like you...Tesla make sense if you want have the best car !

Have you test driven the car? If not, I strongly suggest you do. Then your rationalizations will come more easily :)

It's a premium car. Generally, cars in this class do not make any economic sense. Why should Tesla be any different? It's simply not comparable or proportionate to a Volt, Prius or Segway. It's puzzling how folks would never try to gauge a Prius against a Panamera, but will readily make a cost comparison with Tesla.

+1 Bart84: I had the same question

I'd rather drive my P85 than a Panamera Turbo and that costs $145000 and up. So in my mind the Model S is cheap.


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