I firmly believe that electric vehicles are the future. And in the EV segment, no brand has captured the public‘s imagination or set the benchmark for innovation higher than Tesla. As a confessed EV enthusiast, I closely follow the accelerating adoption of these vehicles. The soaring popularity of Tesla’s in particular recently surpassed over 1 million vehicles produced!
Now more than ever, people crave access over ownership when it comes to large purchases like vehicles. They want flexibility to switch into something new once the latest innovations arrive – without being bogged down by a 5+ year auto loan. Tesla recognized this shift in mindset early and made leasing a core part of their business.
In 2021 alone, a remarkable 30% of all Tesla vehicles were leased – considerably higher than the industry-wide lease penetration rate of 20%. As talent leaves Apple and other tech giants to instead work for Tesla, they retain their ethos around always striving for the next big thing. Leasing caters perfectly to the Tesla owner who can‘t wait to get their hands on the next likely groundbreaking release coming soon down the pipeline.
So in this guide, we’ll uncover exactly what it costs to lease every vehicle across Tesla‘s impressive EV lineup. You’ll see how their future-forward residual value forecasts buck industry norms and enable attractive monthly payments. Whether you are considering the Model 3, Model Y, Model S or Model X, you can leverage the insider data and analysis ahead to make an informed leasing decision. Let‘s dive in!
Key Factors That Determine Tesla Lease Payments
Finalizing an auto lease is like a delicate dance, with many fluid variables that sway back and forth until they find equilibrium. Getting favorable math requires optimizing areas under your control. Be aware of five key factors when estimating your future monthly payment:
1. Vehicle Model Selection
Obviously the starting MSRP matters enormously. A $90,000 Model X Plaid costs exponentially more per month than a $47,000 Model 3 RWD. But also consider insurance, expected maintenance, charging costs and taxes which vary by model.
2. Credit Score
Virtually all lease offers highlight “Tier 1 credit” requirements, generally meaning scores above 740. Sliding down the credit scale significantly increases rates. For example, with all else equal, a Model Y lease may charge:
- 750+ credit – $650/month
- 650-749 credit – $750/month
- 550-649 credit – $900/month
3. Lease Term Length
Longer lease terms spread out payments over more months, reducing your payment but increasing total spend due to more interest paid. Tesla only publicly advertises 36 month terms but can accommodate shorter or longer (48 month max) during custom lease structuring.
4. Annual Mileage
Overmileage fees are painful so pick your yearly allowance wisely. Every ~5,000 miles added may increase monthly cost ~$100. Watch for minimum annual miles too – dropping from 10k to 5k yearly only saves ~$30/month.
5. Down Payment
Increasing your one-time upfront fee reduces the monthly payment substantially – you are prepaying some of the overall lease obligation after all. Putting $5,000 down may shrink your payment by ~$140.
Now that you know the key inputs, let’s model out the monthly lease scenarios across Tesla’s vehicle range.
Breaking Down Base Lease Rates Model by Model
Auto lease rates are partially dictated by the vehicle’s projected residual – or market value at when the term ends. Luxury and premium brands typically hold value better thanks to scarcity and reputation, keeping monthly rates lower. But no company has the crystal ball clarity into future pre-owned pricing better than Tesla. Their own CPO sales velocity and tight inventory control lets them feel confident handicapping residuals years out.
This manifests in ultra-competitive base lease rates across their lineup:
Model 3
Model Y
Model S
Model X
Clearly no matter the vehicle, flexibility commands a premium. Opting for shorter 24 month terms or maxing mileage allotments quickly ratchets monthly rates up $100, $200 or more over base. This highlights the value in taking an objective look at your actual expected usage before committing.
Now that we have a feel for pricing, how does leasing with Tesla work?
Demystifying the Tesla Lease Experience
Tesla makes getting into one of their vehicles refreshingly simple by handling everything directly online or through stores. Leasing follows the same seamless process:
1. Customize Your Model
Explore colors, wheels, interior options to create your desired build. Exactly match preferences without compromise since this is your car for the next 2-4 years!
2. Complete Quick Application
Share basic personal financial info so Tesla can safely approve your application and structure terms catered specifically to you. Pre-approvals hold the rate allowing peace of mind at delivery.
3. Upload Valid Documents
Provide license, insurance info, employer details and banking info. Direct deposit of lease payments required.
4. Digitally Sign Paperwork
Tesla leasing is 100% digital. Carefully review all lease documents and sign electronically on your own time.
5. Schedule Delivery & Enjoy!
Take possession at your local Tesla center. Inspect everything during an insightful orientation focusing on Charging, Autopilot and Commands. Drive off smiling in your new electric spaceship!
Many wonderful advantages come standard with Tesla leasing. Let’s compare to buying outright…
Lease vs Buy: Understanding the Tradeoffs
Deciding whether to buy or lease involves prioritizing emotion versus logic. Your mileage needs, finances and desired length of ownership also play key roles. This table summarizes the core trade-offs to consider:
Over a typical 5 year ownership cycle, leasing a Tesla often proves most economical by avoiding exposure to steep vehicle depreciation exceeding 50%. Of course buying unlocks equity and avoidance of mileage limits – but at a financial cost. Carefully weigh these factors against your personal needs to determine the better path forward.
As you approach lease end, questions around next steps emerge. Let‘s tackle those now…
What Happens at End of My Tesla Lease?
As your contract expiration nears, Tesla will contact you to review available options. Typical choices include:
Buy Out Your Lease
Purchase your Model 3/Y/S/X for the predetermined residual price and keep driving! This captures your upfront capitalized cost reduction you negotiated.
Upgrade To Newer Model
Hot off the heels of your current lease, roll into another 2-4 year term on a brand new Tesla with latest tech and features!
Return To Tesla
Drive away in something new outside the Tesla family. Pay any overmileage/wear fees owed and drop off your car at lease end. No resale value worries.
Extend Your Lease
Need a couple extra months? Ask to extend your term shorter-term before deciding on buying or upgrading long-term.
No matter what road you take, Tesla aims to make the process positive. Now let‘s wrap things up with some key takeaways.
Final Thoughts on Tesla Leases
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Tesla leasing reached 30% of deliveries in 2021 – considerably higher penetration than auto industry average demonstrating strong consumer appetite.
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Compelling lease offers exist across Tesla’s full model range thanks to their phones residual value projections and growing certified pre-owned program.
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"Tier 1" tier credit lessees enjoy the lowest rates – so improve your score prior to applying if needed. 720+ opens access to best offers.
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With Model 3 lease pricing starting around just $334 / month, experiencing these innovative electric vehicles proves more affordable than you may think!
If reading this guide got you excited to cruise around in a Model S Plaid or decked out Model X, I hope you feel empowered to confidently strike an ideal lease deal catered specifically to your needs. Any luxury vehicle purchase warrants arming yourself with data and doing some homework first. But the modest amount of effort invested here pays dividends through better rates, ideal car configuration and complete peace of mind throughout your lease term.
Here‘s to a electric, sustainable future ahead thanks to innovative companies like Tesla pushing the boundaries further. Looking forward to crossing paths with some of you fine folks on the road soon!
