Tesla is one of the best luxurious electric vehicles on the market. The car is comfortable, highly advanced, performs outstandingly, and will end up saving you a lot on fuel. There are options for both buying or leasing a Tesla.
Buying or leasing
The best choice is to buy a Tesla, rather than lease one. This is because you cannot decide to buy the car once the lease period is over. If you own the car, you can resell it as well. A 5-year-old used Tesla will still retain approximately 58% of its original value.
If you can’t afford to buy a Telsa outright, there are financing options like paying it off over 72 months. After this point, the car will be yours.
Even though leasing looks to be a good deal in the short-term, it isn’t in the long term. For instance, a Tesla Model Y can be leased for about $500 a month, while financing it will cost you around $700 per month. Despite having to pay $200 more a month, the car will be completely yours after 72 months (6 years).
On the other hand, the person who leased the same Tesla Model Y will end up returning the car to the dealer after the leasing period ends with no value to show for it. To make matters worse, they won’t even have the opportunity to buy the car after the lease period is over.
But when you buy the car directly, you can sell it and recover some of your money. Tesla vehicles have an excellent resale value that is one of the best among luxury cars.
Why buy and not lease a Tesla?
Ownership of the car
Buying a Tesla is advantageous as the car will be yours after the financing period is over. If you have cash, it’s even better as you will end up saving a lot. This is not the case with leasing. You also may not be able to buy some Tesla models after the lease period is over.
Excellent resale value
Buying a Tesla is a good investment as it has one of the best resale values on the market. After owning your car for 5 years, you can resell your Tesla at close to 60% of its original price, which is better than BMW and Mercedes-Benz. However, with leasing you will simply need to return the vehicle after the lease period is over.
Poor leasing terms
Another thing that discourages people from leasing a Tesla is the poor leasing terms. The interest rate in standard Tesla leases is equal to a 5.70% APR, which is very high for a lease.
When compared to other luxury brands that lease their vehicles directly, such as Audi, you will find that the money factor or interest rate charged is almost half that of Tesla.
Lower insurance premiums
If you decide to lease a car, your insurance premiums will be higher than they are for a person who is financing the same car. This is because leased vehicles require more coverage than owned vehicles. So, buying a car directly will save you on such additional costs.
Why lease and not buy a Tesla?
If you don’t have the cash to buy a Tesla outright, leasing is a good way to still afford driving one. The other option is to purchase your vehicle with a financing plan/ car loan that you will pay back over time.
Lower monthly payments
One of the advantages of leasing a Tesla instead of buying it is that you will pay lower monthly fees compared to using a financing plan to buy it. Depending on the Tesla model that you lease, you may end up saving at least $200 a month compared to financing options.
Opportunity to drive a new car after a few years
Being a luxury car brand, Tesla depreciates quickly. Even though Tesla has a better resale value than most luxury cars, it stills depreciates after being owned for a few years. So, if you decide to lease, you can afford to drive a new luxury car every 3 years or as you wish.
What’s the cost of leasing different Tesla models?
Tesla Model 3 – Leasing a Tesla Model 3 Standard Range will cost you about $370 per month for 36 months, at 10,000 miles per year.
Tesla Model Y – Leasing a Tesla Model Y will cost you around $500 per month for 36 months, at 10,000 miles annually. Note that this price is for the Model Y Long Range variant.
Tesla Model X – Leasing a Tesla Model X Long Range Plus will cost you around $1,000 per month for 36 months, at 10,000 miles every year.
Tesla Model S – Leasing a Tesla Model S will cost you around $1,100 per month for 10,000 miles for 24 months, but if you lease it for 36 months, you will be charged around $900 per month.
Considering the high-interest rates that come with owning a Tesla, it’s better if you buy a Tesla rather than leasing it. Unless, of course, you want to change to a new car model after a few years.
What are the disadvantages of leasing a Tesla?
If you decide to lease a Tesla instead of buying it, it won’t be yours at the end of the lease period. On top of that, you will probably have a mileage restriction of around 10,000 miles a year. The more miles you add, the more expensive the lease will be.
You will have to pay higher insurance premiums than a person who owns the same car does.
What affects the Tesla lease price?
The dealer will factor in things like the period you intend to lease the car, the mileage that you cover in a year, and the initial price of the car. If you intend to cover more miles, the lease amount will be slightly higher than that of a person who covers fewer miles.
Is it possible to negotiate a Tesla lease?
No, it’s not possible. Tesla has already set the lease fees for every Tesla model. So, it’s either you take it or leave it. What’s more, you cannot buy the car at the end of the lease period, which is disappointing for some drivers.
Verdict: Buy, don’t lease your Tesla
Buying a Tesla is much cheaper and more convenient than leasing a Tesla. In addition to evading the high-interest rates that Tesla charges when you lease their cars, buying a car also allows you to sell it at a good price after a few years. You can also customize it to your liking and don’t have to worry about high insurance rates.