Leasing for Model 3 to be available soon: Good or bad

Discussion in 'Tesla' started by interestedinEV, Feb 20, 2019.

  1. interestedinEV

    interestedinEV Active Member

  2. bwilson4web

    bwilson4web Well-Known Member Subscriber

    It works for me. I bought a two year old, BMW i3-REx, that came off of lease. It had 6,000 miles, pretty much every option, and immaculate interior. It still had 3 years of warranty which handled the first model year, infantile problems.

    BTW, I am a TSLA stock holder. Leasing means the production lines and population of Teslas continues to increase. Anyone who thinks leasing is the death of Tesla needs to 'get a clue.'

    Fleet sales are next so we can rent them.

    Bob Wilson
     
    Last edited: Feb 21, 2019
  3. interestedinEV

    interestedinEV Active Member

    Leasing will increase demand, which is very good. Automotive manufacturers make a tidy profit by providing financial services. GMAC was one of the largest non-bank lenders and big profit center till the financial crisis hit and there were overextended. GM has now gone back to providing in-house financial services, as it can be very profitable and help drive sales.

    In the short term, it may have an small impact as they have to lay out the cash for the product and recover it over a period of time with interest, off course. They also take a risk based on residual value of the car in say 2-4 years time. I am sure people will argue that residual value will remain high and point out the residual values of Model X and S. However, from a financial perspective, there is a risk element that needs to be accounted for. I have tried to lease a Nissan Leaf (not an apples to apples comparison) and cannot get a decent one as the residual values are so low (it figures). Tesla could get away with a higher residual value but will have to allow market forces to dictate it. Today Tesla is propping up the secondary market but will not be able to do as the market gets larger.

    Overall I believe it is good, but it does show that the heydays where there cars were flying of the lots is slowing down and they have to follow more of the conventional selling practices including offering financial services directly.
     

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