With Tesla making waves in the news, the experts at Swapalease.com estimate what a Tesla Model 3 lease structure could look like.
Tesla is in the news almost daily with moves to improve its top and bottom line. First came the decision to shutter all Tesla retail stores, a decision its landlords apparently were not too happy with. Tesla reversed course and slapped a 3% price increase instead.
Then came last week’s Model Y launch, which was markedly more subdued than in the past. Investors looking for Elon Musk’s trademark “one more thing” move seemed underwhelmed by the teaser of Tesla’s “cyberpunk” pick-up truck. As a truck guy, I’m actually excited by electric trucks — however across the board Tesla faces more competition in every category even in the pick-up truck segment (see Rivian.)
The $35,000 model 3 was always supposed to make the company, but its taken so long to finally materialize that demand for it has a bit soft. With the aforementioned deluge of EV models coming from established OEM brands and upstarts alike, Tesla needs something to stoke the fires and leasing may be the answer, according to Electrek which scooped the story.
How much to lease a Model 3?
This year I kicked off a daily commute to DTLA for a client project, and all of a sudden my lifted truck with meaty BFG KO2’s and 12 mpg didn’t quite make as much sense as before. Leasing might make more sense for someone in my position.
According to the experts at Swapalease.com, I’m not alone. The company’s most recent Q4 lease report showed that search demand for Tesla has increased 34% YOY (compared with 25% for BMW).
“Our customers have been wanting more leasing from Tesla for a while now, and the quality of their vehicle makes a lot of sense financially for a lease, especially when you consider the fact that people want to change electric vehicles more frequently and Teslas do a great job in vehicle retention,” said Scot Hall, Executive Vice President of Swapalease.com.
Swapalease’s quant jocks analyzed various scenarios and compared a ~$44k BMW 330i against a ~$45k Model 3. The result: a monthly payment of $615 for the BMW vs. $636 for the Model 3, assuming no money down (capital cost reduction in leasing parlance) and no factory incentives.
The latter is a big assumption, especially since OEMs are wont to offer huge leasing incentives whenever they feel the need to goose demand. BMW’s last lease promotion that ended in February would have resulted in a monthly payment almost two hundred dollars lower than a Model 3 lease (with capital cost reduction for both), for example.
Hall has a deep background as an F&I manager at dealerships, so he has a lot of familiarity as to how these lease deals are put together, and that’s reflected in how Swapalease constructed their lease pricing structure analysis. I encourage all my fellow Excel enthusiasts to click the link and geek out.
According to Hall, EVs perform well not only in the Swapalease marketplace, but in leasing overall. What’s driving that? Hall notes “driver’s knowledge and desire to upgrade into newer electric technology every few years. What’s more, luxury vehicles also perform well because they typically hold their values well.” Tesla’s scarcity of supply should improve retention rates — which in my mind explains why the analysts at Swapalease have plugged in a 60% residual value for Tesla (a huge factor in the resulting monthly payment.)
Would I do it?
I’ve gone on record channeling my inner Charlton Heston about the powers-that-be having to pry the keys to my gasoline-powered cars out of my hands. But with $100+ per week fill-ups hitting the credit cards, an EV lease is looking like the way to go to ease the financial pain of the commute. If the price of leasing a Tesla Model 3 is that close to an equivalent 3 Series from BMW, color me interested.
For more information on the Tesla Model 3, visit the Tesla website.
For more information on Swapalease’s services, visit Swapalease.com.