The Tesla spotted in the parking lot, or cruising down the freeway, is the envy of all who drive near it. With cutting-edge technology, a sleek design, and a surplus of attractive features, it is a car that many would love to get their hands on at some point in their life.
When you get to that point and are looking into acquiring one of these beautiful vehicles, you are given the choice of leasing or buying.
With these two choices presented to you, how do you know if you should do a Tesla lease vs buy? What’s the best option? How much is a Tesla lease?
This article will provide a thorough review of both the Tesla leasing program offered through the company and purchasing the vehicle, whether through financing or outright.
What Should You Know About the Tesla Lease Option?
Should you decide to lease a Tesla automobile, it is pertinent to keep the following information in mind while exploring leasing as an option.
- Leasing is not the same as full ownership
- A lease typically runs for a few years
- Lease agreements come with restricted mileage
- As the lessee, you are responsible for any damages to the vehicle
- You are responsible for all maintenance during the lease period
- After the lease period, you may incur additional charges due to extra mileage or excessive wear and tear to the vehicle
Other specific terms and conditions will be dependent on the company. With Tesla, you can perform a self-check through their online checklist and decide how to proceed with your vehicle.
The list will guide you through all the different areas of your car and verify that all is in tip-top shape and ready for whatever the next plan entails.
Upon completing your leasing period, you have four options to choose from for your next steps. While some companies only offer one or two of the choices below, Tesla provides four separate scenarios to consider, including:
- Return Your Tesla
- Purchase Your Tesla
- Extend Your Lease
- Upgrade Your Tesla
Return Your Tesla
If you decide that the best path is to return your Tesla at the end of the leasing period, you will review the online checklist to determine what qualifies as excess wear and tear to the vehicle.
If there are areas that require repair or assistance to get the car back to its original condition, Tesla will reach out to settle any additional charges required.
You will initiate the end-of-lease process within your personal Tesla account.
Furthermore, you will complete all the necessary paperwork and review additional charges within your profile. You will also schedule your vehicle drop-off time and establish the location.
Purchase Your Tesla
After a lease is completed, many don’t want to return the car they have come to love. Thankfully, there are many circumstances in which you don’t have to return your beloved Tesla and can instead purchase it from the company.
While not all models qualify for this option (namely Model 3 and Model Y), you can initiate the process through your Tesla account if yours meets the criteria.
In your profile, you can request an estimate for your particular vehicle. Therefore, if you have a Tesla model S leave, you may be able to get an estimate to purchase.
How much will it cost to buy a Tesla? Tesla will provide a purchasing packet for you to review the cost and breakdown. From there, you send payment to cover the purchase price, and they will transfer ownership to you promptly.
Extend Your Lease
If you feel like you need a little extra time with your Tesla, the company also offers you the opportunity to extend your lease.
In order to do so, you must be current on all your lease payments and be within three months of your agreement’s end date.
Like the previous options, extending your lease takes place within your Tesla account. The maximum amount of time you can further your Tesla lease program is six months.
Upgrade Your Tesla
If you have your eye on one of the newer Tesla models that have come out since you began your lease, you may have the opportunity to do so when the end of your leasing terms is coming near.
If this is something that you are interested in, reach out to a customer service representative at [email protected] to discuss your options.
Buy vs Lease a Tesla
When you purchase a Tesla vehicle, you obtain ownership of the car. When you buy through Tesla, you can participate in one of their financing programs or utilize your own financial institution to finalize the sale.
Like leasing, you can customize your Tesla to match the color and features you want in a vehicle.
However, unlike leasing, you are not limited to a specific mileage level, and you do not return your car at the end of a designated period. The vehicle is yours to keep and to do with as you wish.
While you do still have the ability to trade your car in for a different make or model, that is done separately from Tesla.
With the program, you can at times trade in one Tesla model for another. For example, you could go from leasing Tesla model X to leasing Tesla model S. However, trading a car after having purchased it is entirely different.
Trading In After Purchase
When you initially consider turning in your current vehicle for a newer style or different make, the standard routine is to speak to a car dealership that carries the make and model you desire.
Once you establish the appropriate sellers, you then reach out and gauge their interest in bringing in your car to be a part of their used car inventory.
Once this conversation has started, the dealership will give you an estimate of what price they will provide you with for your car, which you will use towards the purchase of a new vehicle.
At times, the amount will come in too low, and the purchase of another automobile won’t be feasible.
If that situation occurs, many will take the time to visit another dealership. At times you will find special promotions that will give you more for your trade-in than what you would typically get.
An opportunity like this will often present the chance to get the new vehicle for a reduced price or less financing.
As an example, suppose that you are looking at an SUV with an average cost of $40,000 when purchased brand new. You research your current car online on websites such as Kelly Blue Book that give you an estimate as to what the worth is.
Your research shows that you can expect to get around $12,000 for your car in its current state. If the dealership you visit agrees to trade in your current vehicle for that price, you will reduce the purchase price for the new SUV to $28,000 instead of the original $40,000 cost.
How Are the Options Different?
Several aspects make buying and leasing a Tesla unique. While one provides permanent ownership, the other gives you the ability to obtain a new vehicle every few years.
Additional things to consider when reviewing how the two options are different include:
- Varying Interest Rates Between Both Options
- Mileage Restrictions (Leasing)
- Additional Fees For Wear and Tear (Leasing)
- Ability To Trade-In For Newer Models (Leasing)
- Lower Monthly Rates (Leasing)
- More Extended Payment Responsibility (Purchasing)
Some of these carry a more significant level of importance for certain individuals than others. While many individuals enjoy having the ability to change to a new vehicle every few years, others would rather have the freedom to drive their car as they choose without concern for the mileage used.
Varying Interest Rates Between Both Options
Depending on which route you take, your interest rate will correspond with that choice, your credit score, and other items that are specific to the lender or company.
While leasing will be with the company, in this case, Tesla, buying a car can happen with the company, bank, credit union, or cash.
Mileage Restrictions (Leasing)
As mentioned above, leasing a car comes with limited mileage that you have available to you for the duration of your lease.
However, purchasing a vehicle does not have this restriction. It’s standard that a lease will provide 12,000 miles per year. However, if you drive long distances or frequently travel, this amount will likely be too low for what you need.
Additional Fees For Wear and Tear (Leasing)
Everybody loves that new car smell. Unfortunately, it doesn’t last forever. During the months and years that follow, your vehicle will undergo a lot of use.
When you purchase a car, the status and care doesn’t matter because you are responsible for it long-term.
At the end of your lease, a review of your vehicle will provide insight into the level of wear and tear and an estimate of the extra costs you will have to pay.
These costs are part of the Tesla lease requirements to get the vehicle back to its original condition so that the company can market it to prospective buyers.
Ability To Trade-In For Newer Models (Leasing)
In something unique only to leasing and an option that isn’t available at all companies, you can choose to upgrade at the end of your leasing period.
While purchasing a car allows you to trade in your vehicle for whatever value is associated with it, the leasing trade-in will enable you to do so in fewer steps.
Lower Monthly Rates (Leasing)
Because of the structure that leasing provides and the stipulations that go along with it, you often have a reduced monthly payment.
A big reason for this is the limited mileage. When you drive less, it’s less wear and tear on the vehicle. Therefore, the company can resell it at a higher rate after the leasing period is complete, giving you a lower Tesla lease cost.
More Extended Payment Responsibility (Purchasing)
While leasing often encompasses a period of around three years, the Tesla average price can come with financing terms of up to eight or more years.
Therefore, your financial responsibility for the vehicle is considerably longer than what you have in a Tesla lease payment.
While the two options have many differences, it doesn’t mean that one path is less appealing than the other. For some individuals, leasing is the best solution for their needs. Additionally, many people view the car buying process as a better fit for their daily lives.
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How Are the Options Similar?
Although leasing and purchasing have many different aspects, there are just as many that share similarities. Each route provides a reliable vehicle for you to use as you desire and the ability to select the car of your choosing.
When considering whether to lease or buy Tesla, pay attention to the following:
- Customized Look and Features
- Access To All New Models and Technology
- Long-term Vehicle Usage
- Trade-In Potential
- Tesla Warranties and Customer Service Assistance
- Personal Tesla Account For Vehicle Management Purposes
Regardless of which route you decide to take, you have access to everything that makes up the foundation of Tesla as a company.
Whether purchased or leased, the Tesla engineers will construct your vehicle in the same way with the same high-quality attributes that make it uniquely Tesla.
Customized Look and Features
In both instances, leasing or purchasing with Tesla, you get to specify your car to the style and features you want. Therefore, you can pick the color, interior, and materials, among many other elements.
Having this ability helps you feel a stronger connection to the vehicle and allows you to be a part of the car’s design.
Access To All New Models and Technology
Regardless of the route you take to obtain a Tesla; you will have the same level of access to the new models that the car company creates and the technology they outfit them with while in production.
There isn’t a specific model produced only for leasing and another for those purchasing a Tesla.
Long-term Vehicle Usage
While leasing is most commonly for three full years, it is still fully available to the leaseholder for that entire duration. Purchasing a vehicle comes with extended ownership, but both options allow dedicated access to the car for a long-term solution.
While the process looks different for each route, both leasing and purchasing allow you to trade in the vehicle for an upgraded option. Whether it’s with a new lease or using the value towards purchasing another car, the choice is available for you to select a different vehicle when the time is right.
Tesla Warranties and Customer Service Assistance
It doesn’t matter whether you decide to lease or purchase a Tesla vehicle.
Each option permits you to have access to the company warranties for your car and customer service assistance for the duration of your lease or the life of your automobile.
Personal Tesla Account For Vehicle Management Purposes
One of the top perks of leasing or buying a Tesla is the online access to your personalized company profile. With this, you can request estimates for purchase, perform your lease checklist, view your payment history, and much more.
Having everything in one place and being able to bypass lengthy phone conversations is a benefit that many appreciate.
Accessing this perk no matter what avenue you take is a feature that not many companies offer to customers.
In addition to the above, Tesla offers an online calculator that helps you estimate what your lease and purchase payments will equal out to monthly. This calculator is available for all prospective buyers on the Tesla website.
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Should I Lease A Tesla?
If you are going back and forth on which path to take in obtaining a Tesla for personal use, you may wonder what is better about going the leasing route.
While there are many positive attributes affiliated with leasing, some of the pros and cons of leasing a Tesla include:
- Lower Monthly Payments
- Upgrade Options
- Ability to Purchase
- New Car Every Few Years
Leasing is an excellent option for many. Having the ability to change up your vehicles every few years is quite appealing, and it’s one of the top reasons people choose to go that route.
With safety features and technology changing rapidly, a three-year span can mean a huge difference in the types of vehicles available.
Additionally, with the limited mileage that is available during a leasing period, the monthly payment is able to reflect that. Therefore, you are paying a smaller monthly price than what you would be with the purchase method.
What Is Better About Buying?
On the flip side, buying a car has its own set of benefits that shoppers can appreciate. In general, buying has been the go-to method for car ownership.
It hasn’t been until recently that leasing has taken off and become a contender.
Some of the pros and cons of buying a Tesla include:
- The Permanency That Comes With Sole Ownership
- Unlimited Mileage
- Choice Of Financial Institutions For Payment
- No Additional Fees For Wear and Tear
As stated above, buying has been the primary source of car acquisition until recently. Therefore, many still see it as the best route to take.
Additionally, having something tangible in exchange for all the money spent is appreciated, whereas leasing requires you to return the item at the end of the term.
Who Should Choose To Lease?
Leasing is an excellent option for many people looking to get a brand new car for less money.
Due to the limited amount of miles that you can drive on a lease, you are able to participate in a lower payment amount. Depending on your credit score and your Tesla lease terms, you may also have a lower interest rate on your lease.
While the downfall of this method is that you don’t automatically get to keep the vehicle at the end of the lease, you are afforded the option to purchase the car if you desire once the period is complete.
Most people willingly trade the ability to choose a new vehicle every three years over gaining permanent ownership of one.
In the end, leasing is an excellent option for someone who doesn’t drive a ton of miles back and forth to work or school and resides close to necessary amenities.
For those who are always wanting the newest models and designs, leasing is an excellent option as they can constantly trade out for the latest versions and the best features.
Who Should Choose To Buy?
Buying is likely the better option for those who aren’t as concerned with having the latest and greatest. When purchasing a vehicle instead of leasing, you can go with whatever financial institution you choose, which opens you up to competitive interest rates that you wouldn’t get otherwise.
Additionally, not being restricted to a certain amount of miles is highly beneficial for those who travel frequently or live in rural areas.
Typically in these situations, the extra miles will add multiple charges at the end of your lease that you will need to reconcile with the company.
All in all, those who buy often want to have a physical item to show for their purchase. While this isn’t something you get in the end with leasing, it’s something obtainable with buying a car.
Buying provides a more relaxed atmosphere for those who don’t want to be concerned with wear and tear and restrictions.