In this article, I explain that Tesla has dropped their lease pricing so much that it costs the same to lease a Model 3 as a Toyota Corolla!
For the first comparison, I went to all 3 manufacturer websites and picked a 60 month loan at the interest rate they defaulted to. From Tesla, you will actually be able to buy for this price. For the BMW and the Toyota, you may get a higher or lower price depending on the market conditions. The Tesla monthly payment is the highest at $858, but the main reason that is higher than the BMW at $818 is you don’t get any possible tax credit for a year, so you need to borrow the whole amount .
The Toyota Corolla’s payment of $427 is almost exactly half of the Tesla price. At payments similar to this, the Tesla Model 3 slightly outsold the Corolla as buyers perceived the car’s features and fuel and maintenance savings justified the much higher price. The Tesla outsold the BMW by over 5 times since they perceived the car as both more affordable . Perhaps buyers also considered the Model 3 more enjoyable to drive .I need to mention that current Tesla leases have a unique disadvantage.
Recognize that the residual value of a 3-year-old Tesla with 30,000 miles is about 80% of the new price instead of the more common assumption of 60%.So, Tesla has plans to reduce the manufacturing costs of both the Model 3 and the next-generation vehicle we should hear more about in 3 weeks at Tesla’s coming investor day.
It is unclear if Tesla has recognized the reduced depreciation of its cars in the current lease rates, but it is a possibility. On the third point, Tesla doesn’t seem to be willing to use its strong balance sheet to borrow a lot of money at low rates to finance its leased cars. Of course, the Fed has dramatically raised interest rates over the last year or so.
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