Is it worth leasing a Tesla Model 3? Or will buying one save you a ton of money and needless worry? You might be surprised to know that applying for a lease has never been this quick and easy. See if leasing a Tesla is a better option for you.
When you ask people what their dream car is, there’s a good chance you’ll find someone who can’t give you a straight answer, because for them, their most coveted auto changes a lot. This shouldn’t surprise you, given the electric vehicle (EV) boom we’ve seen these last few years. Car makers know that in the long run, the EV market will only keep growing, although you’re bound to find some people who are only used to driving traditional gas guzzlers.
But what used to be a niche market in years past has now become more accessible. As EVs become cheaper to make, they’ve only gotten better, as they keep pushing against the boundaries of long range. Tesla, for one, continues to amaze, bringing the price of the Model 3 down to a little under $40,000 while receiving 5-star safety ratings in every category.
$40k still feels pricey for many, as even the highest model Toyota Prius can save you $5k if you were to buy it instead. So should you get a Tesla?
Tesla as a car company has made serious efforts to be more accessible to the greater public, expanding over the last decade from just the sportscar niche of the affluent.. If you’re new to the world of EVs, find out below whether leasing or buying a Tesla is worth it for you.
The Model 3 may come at a hefty price, but the flexibility, upgrade options, and incentives from Tesla make it appealing to lease or buy. The price is already justified by the vehicle’s performance, being a top performer among luxury EVs, despite its lower cost compared to others in the same category.
Tesla offers the option to either lease or purchase a vehicle through a loan or cash. Whichever route you choose, both leasing and purchasing options require you to go through the steps in the Tesla app. If you don’t have the app on your mobile device yet, download the app on either the App Store or Google Play. Once you’ve set up your Tesla account on your app, you can specify either ‘Lease’ or ‘Loan’ under the Payment Method section.
To get a baseline understanding of whether you should lease or finance a Tesla, let’s review the pros and cons for each option.
Requirements – In leasing a Tesla, you’re required to confirm the following information and personal details:
Amount due at signing
Lease term (24-36 months)
Annual mileage or miles per year
Date of birth
Social security number
Employment and income information
Advantages – (1) Budget-friendly. Leasing offers lower monthly payments compared to a loan, providing a more affordable way to drive a Tesla Model 3. (2) Change vehicles as you grow. With leasing, you're not locked into long-term ownership. This is ideal for those who enjoy the excitement of a new car every few years or for those adapting to changing life circumstances, be it a growing family or a city move.
Downsides – (1) Watch your miles. Typically, leasing contracts restrict the number of miles you can drive per year (usually around 10-15k miles), which might not be suitable for those who have a high daily commute or frequently take long trips. (2) Overage charges can sting. Going over your yearly mileage limit can lead to big fees, making leasing less affordable if your driving needs change a lot. (3) No option for ownership: For new Tesla models, including the Tesla Model 3, it is generally not possible to purchase the vehicle at the end of the lease term. If you have developed a deep attachment to your Tesla Model 3 and have aspirations of owning it in the long run, leasing with Tesla may not be the most suitable option for you.
When compared to a traditional lease, Zevvy offers a significant advantage. Traditional leases often impose a limit on the number of miles allowed per year (usually in the 10,000-15,000 range) and charge up to 50 cents per mile for any excess mileage. Tesla, for example, charges a $0.25 per mile overage fee if you exceed your contracted annual mileage, which can really add up.
With Tesla's overage fee of $0.25 per mile, the extra cost for those 3,000 excess miles would be:
3,000 miles * $0.25/mile = A whopping $750!
In contrast, with Zevvy's unlimited driving and low per-mile fee structure, there are no additional charges for exceeding the mileage limit. This allows for maximum flexibility and cost savings for drivers, setting it apart from traditional leases, even those from an innovative company like Tesla.
Requirements – In buying a Tesla through a loan, you’re required to confirm the following information and personal details:
Amount to finance
Loan term (36-72 months)
Social security number
Advantages – (1) Easy payoff. There are no prepayment penalties when you finance with Tesla and its partners. There are also no lender or application fees when you apply for a loan. (2) Tax Credit. If you purchase a qualified new Tesla vehicle and meet all federal requirements and conditions, you’re eligible for a tax credit of up to $7,500.
Downsides – (1) No pre-approval process. While it’s not possible right now to get credit pre-approval directly with Tesla, you can seek pre-approval through your own bank. (2) Third-party lending. You may not actually get the loan from Tesla, and instead be routed to one of its partners. If you’re having trouble making payments, you would need to contact the lender.
You can find the right payment option for you by using either the leasing calculator or the financing calculator in Tesla’s Design Studio. If you choose to finance a Model 3, the estimated monthly payments range from $713 to $914, with an initial down payment of $4,500. Alternatively, if you decide to lease your Model 3, you can expect to pay between $544 to $811 monthly, with $5,739 to $6,006 due at signing. (Note: Due at signing includes down payment, first month’s payment, and acquisition fees)
If you do the math right, in the low end, you pay a $4,500 down payment plus the $1,239 for the first payment and fees. While leasing a Model 3 through Tesla can result in savings over time, the initial upfront payment can be quite high. For more affordable upfront payment options, you might want to explore alternative platforms like Zevvy, which requires a more manageable upfront payment of $1,767.00 for Tesla Model 3.
A traditional loan typically comes with a steep upfront payment, long terms, and an unfavorable interest rate, excluding many from being able to afford this option. On the other hand, the standard monthly lease payments with Tesla do come with the caveat of being ‘locked in’ until such time where you can either pre-terminate or transfer your lease. They also require significant downpayments and limit the amount of miles you can drive each year.
Luckily, electric car leasing company Zevvy provides significantly more flexibility. Leasing a 2022 Telsa Model 3 Standard Range Plus with Zevvy, for example, costs $699 a month. It might sound pricey, but you're getting a cheaper total cost of ownership, along with these useful perks in return:
Low upfront payment (thousands of dollars less than a traditional loan or lease)
Unlimited mileage at a low per-mile fee
Customizable lease length, starting at just six months (remarkably lower than the standard 24-36 months)
Options at the end of the lease term
Purchase (with all previously paid-for mileage fees deducted from the purchase price)
True “try before you buy”
Routine maintenance included
A team of EV support specialists to guide you with your vehicle selection, charging, and more!
But it’s also worth noting that leasing can vary by state. In the state of Vermont for example, you can lease a Tesla but you may not have any centers for maintenance services. And while other states may have service centers, you can expect to find only one in states such as Connecticut, Delaware, and Idaho. This means that your location is a key factor on whether you should get a Tesla in the first place. While Tesla can offer some flexibility, you also have to consider what’s best for you in the long term.
When buying a used Tesla, most Tesla owners will tell you to look for a base-level Model 3 with high mileage. Like other used cars, higher mileage means lower price. Unlike non-EV cars, however, a Tesla can last a long time, which means a Model 3 with 200,000 miles on the odometer isn’t as bad as it sounds.
You’re also likely to get the lowest price from a private seller, but it’s always good to monitor Tesla’s Certified Pre-Owned (CPO) offerings on their website. A CPO vehicle is great because it needs to pass through rigorous tests before getting certified; hence, you have minimal risk when you buy a used car.
Lastly, if you want to avoid a high purchase price for second hand Tesla cars, be careful with EV marketplaces. These online groups specialize in listing Teslas and other EVs, but oftentimes members of these groups jack up the price of their car, knowing that they’re selling to EV newbies who have limited knowledge of the EV market. . Some horror stories of getting scammed in these groups also float around, so try avoiding these so-called “marketplaces” as much as possible.
If you instead want to lease a Tesla for cheap (with the option of purchasing; more on this below), check out Zevvy, a lease platform that offers dedicated support to help you lease an EV with low upfront cost, flexible options, and no hidden fees. This platform allows you to choose from a wide range of EVs, including the 2022 Tesla Model 3 Standard Range Plus and 2018 Tesla Model 3 Mid Range . With Zevvy, you can customize your lease terms, such as the length of your term (starting as low as six months), and there are no restrictions on mileage. At the end of your lease, you can either return your car, renew your lease, or buy the vehicle with all mileage fees deducted from the purchase price. Removing the limitations and annoyance of mileage caps, three-year terms, and sky-high upfront payments, you might just find what you need here.
If you prefer a fresh approach to driving an EV, getting a Tesla might be the right pick. With Tesla, you’re sure to get the most advanced features across any EV alternative–even if you start with the base Tesla Model 3. But when you lease with Tesla directly, chances are you’ll stumble, just with any other traditional leasing method. The high upfront cost and the 24-36 months minimum lease term are enough to give you cold feet.
By leasing with Zevvy, however, you wind up with a lower upfront cost (about a third or less) and more flexible lease terms that shrink the minimum term to just six months. This online platform is ‘greasing the wheels’ of leasing, offering a radical new approach to EV financing, and making the process more economically feasible for everyone.
Ready to lease a Tesla Model 3? Browse Zevvy’s inventory of electric cars here.
May 17, 2023
May 02, 2023