Automotive

Leasing a Model 3?

  • Last Updated:
  • Jul 25th, 2020 6:28 pm
Tags:
[OP]
Jr. Member
Dec 22, 2015
115 posts
42 upvotes
Toronto, ON

Leasing a Model 3?

Has anyone tried to lease a model 3 through a 3rd party company? I feel like with cars like the Model 3, its far better to lease than to buy. Mainly because it rides the tech curve and hardware is improving at a drastic pace in CARS, its better off to lease and swap the cars every 2-3 years versus keeping it for any longer than that.

I know the States has the option to lease the model 3, but not Canada.
22 replies
Deal Fanatic
Sep 10, 2008
7413 posts
5434 upvotes
Kitchener
Model 3 is constantly being upgraded through OTA updates and winning car of the year awards around the world. If you're considering leasing because you think there's something better on the horizon, you're incorrect. Basically it has no competitors yet and as far as I can tell, there's nothing in development by anyone (nobody can hit the Model 3 price point with a comparable vehicle).

OEM leasing options will eventually hit for Canada, but they've already warned that they won't allow buyouts at end of lease.
Newbie
Jul 3, 2019
11 posts
3 upvotes
IntrepidRT wrote: Model 3 is constantly being upgraded through OTA updates and winning car of the year awards around the world. If you're considering leasing because you think there's something better on the horizon, you're incorrect. Basically it has no competitors yet and as far as I can tell, there's nothing in development by anyone (nobody can hit the Model 3 price point with a comparable vehicle).

OEM leasing options will eventually hit for Canada, but they've already warned that they won't allow buyouts at end of lease.
In addition to all this they’ve been holding they’re value very well so far.
Deal Fanatic
Sep 10, 2008
7413 posts
5434 upvotes
Kitchener
OG2003 wrote: In addition to all this they’ve been holding they’re value very well so far.
Highest resale value vehicle in Canada as far as I've heard.
Deal Fanatic
Sep 1, 2004
6134 posts
4743 upvotes
Just buy one. Lease make no sense with any Tesla. They are not depreciating normally and rate is too high.

My guess is It will be another 5 years before there are enough competition to get it into normal depreciation curve.

If you can't do cash, they will finance you one at 4.6% which is decent. Resale should be ok because I don't see meaning volume to satisfy the market for the near future. Nobody got the batteries. The only depreciation I can see is how Tesla set their prices. That's how all the Model S owners took a bath on their resale, especially at the top end.

As Intrepid said factory lease doesn't allow buyout. Make it a very bad lease anyway.
Deal Fanatic
Apr 5, 2016
5052 posts
3582 upvotes
Calgary/Vancouver
Just buy and sell in 2-3 years, will end up cheaper than traditional financing and you don't have mileage restrictions.
Current Fido and Rogers customer.
Ex Koodo customer.
Deal Addict
Jan 8, 2007
2744 posts
1280 upvotes
Calgary
IntrepidRT wrote: Highest resale value vehicle in Canada as far as I've heard.
Tesla 3 isn't on this yet because it's too new, but last year Wrangler was Canadian vehicle with highest retained value after 4 years. 91% value after 4 years according to CBB. Most of this is due to price escalation since 2015, but still that's insane residuals.
https://www.canadianblackbook.com/awards/
[OP]
Jr. Member
Dec 22, 2015
115 posts
42 upvotes
Toronto, ON
My issue is, EV cars are improving at such a fast pace, would it not be better to treat it like a mobile phone and upgrade every 2-3 years? Charging speeds, battery capacities, AP hardware changes are some of the things that you can't necessarily do a software update on.
Deal Addict
Jul 21, 2009
1127 posts
572 upvotes
Toronto
HeroicDeath wrote: My issue is, EV cars are improving at such a fast pace, would it not be better to treat it like a mobile phone and upgrade every 2-3 years? Charging speeds, battery capacities, AP hardware changes are some of the things that you can't necessarily do a software update on.
The batteries do pretty well based from what we see on the older Teslas and they have great warranty too.

Pushing all the software updates is fine for the first few years but anyone that has sat in a 4 year old Model S knows how laggy the screen is.. it will probably be the same for the Model 3 as well.
Sr. Member
Jan 12, 2013
586 posts
542 upvotes
Halifax
HeroicDeath wrote: My issue is, EV cars are improving at such a fast pace, would it not be better to treat it like a mobile phone and upgrade every 2-3 years? Charging speeds, battery capacities, AP hardware changes are some of the things that you can't necessarily do a software update on.
Instead of worrying what may or may not happen in the future, if the current Model 3 suits your needs now and 3-5 years in to the future then just buy one. Finance rates are actually lower than advertised on the website. They fluctuate between 3.2-3.9% depending on the time of year.

You’re assuming you’re going to get a better deal for your money with a lease, but I think that’s flawed logic based on how a traditional ICE vehicle depreciates. Leasing can be a good option for some vehicles so that you don’t eat as much of the depreciation but on a low depreciating vehicle you’re just throwing money away on a lease. When you give the car back you’ve paid more to rent it than if you had bought, financed, and then traded in in 3-5 years.
Deal Addict
Jan 20, 2005
3689 posts
324 upvotes
Thornhill
Don't lease. Its atrocious rates. Tesla's hold their value, just buy and sell when something new and shiny shows up.
Deal Fanatic
Jul 4, 2004
5980 posts
2072 upvotes
Ottawa
When you're debating lease vs purchase, you really have to look at the full numbers but if you are the type that likes to change cars every two years, leasing might be more beneficial.

One of the biggest difference between buying and leasing is the tax. If you lease, you pay tax on your lease payment. If you buy, you pay tax on the full value upfront. In Ontario (not sure about other provinces), you only get a credit for the taxes if you trade-in through a dealership.

e.g. $50k car (numbers off the top of my head, no idea how realistic they are), nothing down, 5% interest on lease and on car loan

Lease: 24 months @ 5% with $35k residual after 2 years
$800 / month + tax payment = $904
total = 24 * 904 = $21696

Buy / sell :
$50k + tax = $56,500
monthly payment = 1066 (financed over 60 months)
sell privately after 2 years = $37,000
total = payments - (sale price - outstanding loan balance) = 24 * 1066 - (37k - 35575) = 25584 - (1425)
= $24159 (BUT THAT'S IF YOU SELL FOR $37K)
sell to dealer after 2 years = $31,000
total = payments - (sale price - outstanding loan balance) = 24 * 1066 - (31k - 35575) = 25584 - (-4575)
= $30159 but you do get $3900 credit for taxes if you are buying a car that's more than 30000 and if you get $31k trade-in)

The big unknown is the value of the car at lease end / trade-in / sell time and that can really make a difference
Member
User avatar
Jul 12, 2013
229 posts
148 upvotes
Saint-Bruno-de-Monta…
HeroicDeath wrote: Has anyone tried to lease a model 3 through a 3rd party company? I feel like with cars like the Model 3, its far better to lease than to buy. Mainly because it rides the tech curve and hardware is improving at a drastic pace in CARS, its better off to lease and swap the cars every 2-3 years versus keeping it for any longer than that.

I know the States has the option to lease the model 3, but not Canada.
I agree with you, however if everyone said above are true and Tesla holds its value so well, you should have no problem selling it for a high price (high residual as others said) even if you buy or finance a new one today. There should be significant amount of potential buyers wanting to buy your old Tesla in a few years.

If you are not convinced, then definitely it's a good idea to lease through a third party dealer to try it out for 2-3 years. Then you can make your decision if it's worth to buy / permanently own a Tesla for a longer period of time.

It's not a collection car, so it still depreciates. Worth or not, might be a good question to ask yourself if you would buy a 3 years old Tesla on the market today at that price. I think the answer should not be that difficult.
Deal Addict
User avatar
Sep 23, 2009
3441 posts
868 upvotes
Oshawa, ON
HeroicDeath wrote: My issue is, EV cars are improving at such a fast pace, would it not be better to treat it like a mobile phone and upgrade every 2-3 years? Charging speeds, battery capacities, AP hardware changes are some of the things that you can't necessarily do a software update on.
That is a terrible comparison. FYI Teslas will receive more software updates than your smartphone and these updates are normally significant.

Last edited by EnyCe on Dec 11th, 2019 10:53 am, edited 2 times in total.
Deal Addict
User avatar
Sep 23, 2009
3441 posts
868 upvotes
Oshawa, ON
submarine wrote: The batteries do pretty well based from what we see on the older Teslas and they have great warranty too.

Pushing all the software updates is fine for the first few years but anyone that has sat in a 4 year old Model S knows how laggy the screen is.. it will probably be the same for the Model 3 as well.
I was provided a 2015 Model S loaner for two weeks, it wasn't laggy at all and it was using HW 1.0 (which unfortunately isn't upgradable). The only part was "slow" was the data because it was still using 3G and the maps weren't refreshing as fast. It was slower and response time was not as fast compared to my Model 3 with HW 3.0, but far from being "laggy". To be fair, the screen on that 2015 Model S was still faster and more responsive than my family member's 2019 Hondas.
Last edited by EnyCe on Dec 11th, 2019 10:54 am, edited 1 time in total.
Deal Fanatic
Sep 10, 2008
7413 posts
5434 upvotes
Kitchener
EnyCe wrote: I was provided a 2015 Model S loaner for two weeks, it wasn't laggy at all and it was using HW 1.0 (which unfortunately isn't upgradable). The only part was "slow" was the data because it was still using 3G and the maps weren't refreshing as fast. It was slower and response time was not as fast compared to my Model 3 with HW 3.0, but far from being "laggy". To be fair, the screen on that 2015 Model S was still faster and more responsive than some of my family member's 2019 Hondas.
$100 says it's also more responsive than the 2021 Mustang Mach-e
Deal Expert
User avatar
Apr 21, 2004
54499 posts
19326 upvotes
2-3 years is probably when a big chunk of depreciation happens. $2k down the drain every 2-3 years is nothing compared to $8-12k (minimum) every 2-3 years though for some that is cest la vie .

In the US, Kelly Blue Book predicts 8-10% deprecation on the TM3. It seems they are depreciating much slower in Canada though asking price isn't a good indicator. Maybe the Canadian Red or Black Book will have more information a few years down the road.

Would your driving need really change every 2-3 years just because you drive a BEV? The TM3 is the best value for at least the next few years if not more and it seems you don't have any concerns with potential issues down the road anyway than an OTA can't fix.
Banned
Mar 11, 2016
2081 posts
865 upvotes
3rd party leasing=biggest scams in automotive financing history ...do some research
Deal Fanatic
Sep 1, 2004
6134 posts
4743 upvotes
Fjr2005 wrote: 3rd party leasing=biggest scams in automotive financing history ...do some research
Depends what you need it for. Just like payday loans and rent to own furniture, they won't be here if market doesn't exist. You just have to understand the pros and cons of such produce and how you plan to utilize them.

Top