Tesla has offered a leasing business program that provides new Tesla vehicle owners the opportunity to buy their vehicles at a fixed price for a limited time. This allows them to drive off of an agreement without paying any car payment for up to 36 months and pay at the end of each year.
The program has been met with some opposition from Tesla enthusiasts, who feel this undermines their immediate ownership experience. “Tesla Lease Pilot Program” will be covered in this article and it is set out to show that this program is not necessarily bad, but rather is beneficial in many aspects.
In a statement released by Tesla on April 10, 2013, the criteria for this program was described:
“The program is designed to help new owners, including those who have not driven a Tesla before, make an informed decision about owning a Model S or Model X. This program is not intended to be used as a way to sell cars at prices that would not otherwise be sustainable. We have been working hard to ensure that all customers are aware of the terms of this program.”
Tesla Motors does not want its customers financing the purchase of a Model S and then holding onto it for longer than the 36 months provided for in the agreement. The company wants the customers to really want their vehicle and not just buy it because it may be an economically sound decision.
To qualify for this program, a customer must drive their Tesla for at least 20,000 miles before the end of the year, pay all of their lease payments on time, ensure that they maintain a clean driving record throughout their term and keep a TSLA 5X5 (Tesla’s stock symbol) rating.
This program has been met with great success thus far. It gives buyers more time to determine if they would like to stick with Tesla or not.
Is it cheap to lease a Tesla Model S?
No, the monthly lease payment for a Model S is similar to that of other luxury car leases. In fact, the cost for a Model S is similar to what one might expect to pay for a Mercedes-Benz E Class or BMW 535i GT, both less expensive sedans.
Can I turn my Tesla lease in early?
Yes. If you turn your vehicle in early you will forfeit any additional monies owed on your lease as well as your entire Residual Value Guarantee (RVG). Your monthly payment will then revert back to the residual value of your vehicle, which is typically much less than the reservation price or sticker price of the car. (ie. If you turn your Model S in after 24 months and owe $10,000, you will forfeit the remaining $10,000 on your lease, your monthly payment will be nearly triple at that point and you will lose the ability to sell the car for its residual value).
The Tesla Residual Value Guarantee (RVG) is a great benefit of leasing with the Tesla Lease program. It is calculated on a per-model basis and it guarantees that after 36 months of ownership or before if you turn in the vehicle early, that it will retain at least 50% of its original value based on a certified pre-owned valuation from Tesla.
Tesla’s leasing business program is beneficial for Tesla enthusiasts in a number of ways. It offers them the opportunity to escape car payments for up to 36 months, it allows Tesla to ensure that these cars are not being held from financial gain, and it gives the company a chance to see if the customer wants their car enough to keep it for the entire term of 36 months or more. This program is another step in Tesla’s continued efforts to improve their current business structures and processes and make themselves an overall more profitable company.