Lease numbers don't make sense?

[crowdedstr]

All -- I was talking to a rep in the Chicago area about a lease and I'm having trouble reconciling the numbers... perhaps someone here can help.

I configured a Model Y LR in grey/ black with a Tow Hitch for 36 months/ 12k miles per year. Tesla is telling me I'd pay $649/month for the vehicle with a $5k down payment as well as ~$1500 in drive off fees. I cannot figure out for the life of my where this $5k is going when you run the real numbers...

Sale Price + Destination fee: 54490
Residual: 35692 (around 65% which is great)
———
Cap Cost (vehicle price minus residual): 18848
Cap Cost + Interest (4.4496% or MF .001854) = 19686

Here is where I begin getting confused, when we begin to distribute across 36 months and add taxes…

$19686/ 36 months = $546/month (please note this is WITHOUT a $5k down payment lowering the cap cost of the vehicle)

Now let’s add taxes.

Sales tax should be somewhere around 9.5%
546/month * 9.5% = $598/month

And the extra city of Chicago lease tax which is 9% (yes I realize this is robbery)
$598/month * 9% = $653/ month

Then add $33/ month distributing the Transport/ Doc fee of $1200 across the 36 months = $686/ month

I realize I’d have about $1500 in out of pocket for acquisition fee, and first month’s payment but I’m landing on $686/month (give or take) without any down payment whatsoever.

So… I still don’t really know where the $5k is going if I were to pay it. Are there other fees that I’m not taking into account? My calculations show that if I were to pay the $5k down payment, the overall payment should be less than $550/ month after taxes.

Thanks for any help you could provide in terms of clarifying the quote.

 

[Celeritas]

Down payment should be minimal as possible, not $5K! Ask them to give you a full breakdown of that $5K. Tesla is actually pretty transparent compared to other brands for leasing (i.e. no markup of the money factor and other games). That City of Chicago extra lease tax really blows and if you can avoid that, it will help. Also if this is your first EV, you'll need new plates, can't transfer ICE ones, and there are fees associated with that.

 

[ajs847]

money factor = hype factor = scarcity factor. This is why ALL manufacturers are either eliminating lease offers right now or making them unaffordable.

Before springing for the MY I wanted a ford explorer ST and in May the lease offers were stupid, like Mercedes stupid... $8k down, $800+/ a month on a $56K SUV and when I asked how on earth they came to those numbers the store manager told me it's scarcity and hype of the model, everyone wants one and the ones who want it the most pay up. I walked away and decided to just buy a Tesla atleast the pricing is transparent.

 

[Celeritas]

money factor = hype factor = scarcity factor. This is why ALL manufacturers are either eliminating lease offers right now or making them unaffordable.

Before springing for the MY I wanted a ford explorer ST and in May the lease offers were stupid, like Mercedes stupid... $8k down, $800+/ a month on a $56K SUV and when I asked how on earth they came to those numbers the store manager told me it's scarcity and hype of the model, everyone wants one and the ones who want it the most pay up. I walked away and decided to just buy a Tesla atleast the pricing is transparent

I don't find that to be the case at all. Tesla lease agreement (at least for me) was mostly 1st month, license fees, etc. Nothing else required (i.e. additional cap cost reduction). I thought they were very transparent. FWIW, I expense the cost through my company, but that should not have a material impact on what else is required for down payment.

 

[crowdedstr]

Down payment should be minimal as possible, not $5K! Ask them to give you a full breakdown of that $5K. Tesla is actually pretty transparent compared to other brands for leasing (i.e. no markup of the money factor and other games). That City of Chicago extra lease tax really blows and if you can avoid that, it will help. Also if this is your first EV, you'll need new plates, can't transfer ICE ones, and there are fees associated with that.

I agree I'd never put money down on a lease. The main issue is their numbers just don't make sense either way; trying to figure out either what I'm doing wrong or where they are pulling the wool over my eyes.

Lease tax blows and I typically avoid that by registering at my home in WI, however the state of WI doesn't cooperate w/ Tesla's business model so that's not an option for this one.

 

[crowdedstr]

money factor = hype factor = scarcity factor. This is why ALL manufacturers are either eliminating lease offers right now or making them unaffordable.

Before springing for the MY I wanted a ford explorer ST and in May the lease offers were stupid, like Mercedes stupid... $8k down, $800+/ a month on a $56K SUV and when I asked how on earth they came to those numbers the store manager told me it's scarcity and hype of the model, everyone wants one and the ones who want it the most pay up. I walked away and decided to just buy a Tesla atleast the pricing is transparent.

Their money factor is higher than the market but it's not what is throwing off these payments.

Nobody from Tesla will answer my question lol

 

[Celeritas]

Their money factor is higher than the market but it's not what is throwing off these payments.

Nobody from Tesla will answer my question lol

Money factor is offset by the residual, you may have better luck going in person to a store where they can review everything with you.

 

[watsongrg]

No way I’d lease a model y in today’s 100% + resale value market. Never put money down on a lease. That money factor is way too high on that deal.
Just wait until the tax credit returns, and they roll the credit into an increased residual instead of a Cap cost reduction.
If Tesla let’s people buy their lease out, they get the tax credit TWICE!

A couple things I always tell people considering a lease. 1 At the end of the terms you have no car and no money.
2 If you can’t calculate a lease payment on paper manually, nor convert money factor to an interest rate, you have no business leasing because you don’t understand the deal. ALWAYS calculate the lease payment yourself, because the payment being offered you is almost always inflated as a profit center for the dealer. Call them out on it and their figures will suddenly become an honest error. Lol.

 

[nbeninati]

Purchase might be better with the high interest rate, lease tax and $6500 down.

Have you calculated what that would cost?

 

[rohiggidy]

All -- I was talking to a rep in the Chicago area about a lease and I'm having trouble reconciling the numbers... perhaps someone here can help.

I configured a Model Y LR in grey/ black with a Tow Hitch for 36 months/ 12k miles per year. Tesla is telling me I'd pay $649/month for the vehicle with a $5k down payment as well as ~$1500 in drive off fees. I cannot figure out for the life of my where this $5k is going when you run the real numbers...

Sale Price + Destination fee: 54490
Residual: 35692 (around 65% which is great)
———
Cap Cost (vehicle price minus residual): 18848
Cap Cost + Interest (4.4496% or MF .001854) = 19686

Here is where I begin getting confused, when we begin to distribute across 36 months and add taxes…

$19686/ 36 months = $546/month (please note this is WITHOUT a $5k down payment lowering the cap cost of the vehicle)

Now let’s add taxes.

Sales tax should be somewhere around 9.5%
546/month * 9.5% = $598/month

And the extra city of Chicago lease tax which is 9% (yes I realize this is robbery)
$598/month * 9% = $653/ month

Then add $33/ month distributing the Transport/ Doc fee of $1200 across the 36 months = $686/ month

I realize I’d have about $1500 in out of pocket for acquisition fee, and first month’s payment but I’m landing on $686/month (give or take) without any down payment whatsoever.

So… I still don’t really know where the $5k is going if I were to pay it. Are there other fees that I’m not taking into account? My calculations show that if I were to pay the $5k down payment, the overall payment should be less than $550/ month after taxes.

Thanks for any help you could provide in terms of clarifying the quote.

im leasing and paying $545 a month with 6300$ down in NY. 8300$ at closing with sales tax added. I got $2000$ off so my closing was 6300$ at delivery. Before the price increases in April

 

[ATPMSD]

I think perhaps you made some math errors and maybe assumptions, you really need a TVM calculator to do the math

So then, assuming:

Residual value: $35,692
Term: 36-months
Interest rate: 4.4496%
Monthly payment $546 (before taxes)

Yields a value of $49,676.42. Add the $5,000 down payment gives us a purchase price of 54,676.42.

 

[ATPMSD]

This is why ALL manufacturers are either eliminating lease offers right now or making them unaffordable.

Not true. What most people do not understand is that most car companies think the best way to get people into their cars is to offer big rebates or offer low-interest loans. A handful of maufactuers, like Acura, have always invested in leasing realizing that a lot of people do not keep their cars long term and want the lowest possible payment. Right now, for example, Acura is offering lease rate of under 3%.

Unfortunately, Tesla does not offer a good lease rates and so for the same payment you can have a 3-year lease or a 7-year loan.

Finally, I have been leasing cars for well over 30-years. Of couse leasing is not for everyone, but if you fit the model and buy cars from companies that have a good lease program you will never drive a car older than 3-years, and it will always be under warranty.

 

[Kairide]

As a serial leaser, never put anything down on a lease. It's a lease so you'll never see any of the money in equity, especially if you end of totaling the vehicle. The best thing to do is calculate the money you want to put down compared to the amount saved over the term of the lease. The rule of thumb is every $1000 you put down will lessen the monthly payment by ~$20. So if you put $5k down, you'll see ~$100 savings in your monthly payments. Over a 36 month lease that's a savings of $3600. So in essence you spent $5k to save $3600.
Tesla has terrible MF on their leases, usually in the 4.4% - 5.5% interest rate equivalent.

 

[Celeritas]

As a serial leaser, never put anything down on a lease. It's a lease so you'll never see any of the money in equity, especially if you end of totaling the vehicle. The best thing to do is calculate the money you want to put down compared to the amount saved over the term of the lease. The rule of thumb is every $1000 you put down will lessen the monthly payment by ~$20. So if you put $5k down, you'll see ~$100 savings in your monthly payments. Over a 36 month lease that's a savings of $3600. So in essence you spent $5k to save $3600.
Tesla has terrible MF on their leases, usually in the 4.4% - 5.5% interest rate equivalent.

Not a great MF but residual is decent to help make up for it.

 

[Kairide]

Not a great MF but residual is decent to help make up for it.

The residual doesn’t make up for the inflated MF. If you were to take a Tesla Mode S lease and an Audi or BMW lease for a car equivalent in price, the Audi and BMW would be significantly cheaper to lease. Even if the German cars only keep a 40% or 45% residual.

 

[rohiggidy]

As a serial leaser, never put anything down on a lease. It's a lease so you'll never see any of the money in equity, especially if you end of totaling the vehicle. The best thing to do is calculate the money you want to put down compared to the amount saved over the term of the lease. The rule of thumb is every $1000 you put down will lessen the monthly payment by ~$20. So if you put $5k down, you'll see ~$100 savings in your monthly payments. Over a 36 month lease that's a savings of $3600. So in essence you spent $5k to save $3600.
Tesla has terrible MF on their leases, usually in the 4.4% - 5.5% interest rate equivalent.

tesla requires a downpayment. This is what i was told. This is how it use to be nonetheless from news articles

 

[Benihect]

Not sure if this helps but I have a configured Model Y in Chicago I can play with the numbers since I’m pending delivery.

slightly different configuration but might give you an idea. I put the least amount of due at signing


Model Y
$39,990.00
20’’ Induction Wheels
$2,000.00
Long Range All-Wheel Drive
$11,000.00
Seven Seat Interior
$3,000.00
Destination Fee
$1,125.00
Documentation Fee
$75.00
Order Fee
$100.00
Car Price
$57,290.00

Est. Financing Details​

Est. Monthly Payment
$865.02
Term
36 months
Annual Mileage
12000 mi
Monthly Sales Tax
$71.42
Sales Tax
$2,312.54
Money Factor
0.0017625
Cost Over 36 Months
$32,916.36
Disposition Fees
$395.00

Additional Charges​

Est. Down Payment
$0.00
Est. First Monthly Payment
$865.02
Registration Amount
$401.00
Optional ERT Fee
$25.00
Acquisition Fee
$695.00
Cook County Additional Tax
$259.50

Payments Received​

Order Deposit
- $100.00
All dates and times in UTC

Amount Due​

$2,145.52​

 

[Kairide]

tesla requires a downpayment. This is what i was told. This is how it use to be nonetheless from news articles

I know I had to when I leased my Model S a couple of years ago. Not sure if you need to with the Y and 3. I haven’t seen any mandatory money down in the online configuration. Other than the 1st month’s payment + TTL.
When I leased I swore I would never buy it, buying a leased car is a terrible idea financially. But, then came the pandemic and the used car market when crazy. I’m buying it out early and would be dumb not to.

 

[ATPMSD]

The ”down payment” works the same on a lease as it does on a loan, the more money you put down up front the lower your monthly payment will be. Sometimes a big down payment will reduce the money factor, but not often.

 

[Kairide]

The ”down payment” works the same on a lease as it does on a loan, the more money you put down up front the lower your monthly payment will be. Sometimes a big down payment will reduce the money factor, but not often.

But you aren’t purchasing the car with a lease. When you put money down on a purchase, you’re helping lower the loan amount and narrowing the difference between positive and negative equity. When you put money down on a lease, your monthly payments are less, but there’s no point since you’re not purchasing the car.