Tesla model 3 P lease or buy?
Discussion
Yes I am the OP with the hydrogen car, I’ve sipped the koolaid....
Now I need a Tesla model 3 too, what’s the smart money doing buying outright or leasing? Would be looking to keep it 3 years and do 45k miles, will be taking advantage of the forthcoming bik rates, cash is earning next to nothing and available in the company,
Would normally buy, but what are thoughts on residuals? Will technology have drastically moved forward, making the current offering old hat?
Leasing removes the financial risk (hence leasing the Nexo) but don’t like paying for that option if it’s not needed.
Now I need a Tesla model 3 too, what’s the smart money doing buying outright or leasing? Would be looking to keep it 3 years and do 45k miles, will be taking advantage of the forthcoming bik rates, cash is earning next to nothing and available in the company,
Would normally buy, but what are thoughts on residuals? Will technology have drastically moved forward, making the current offering old hat?
Leasing removes the financial risk (hence leasing the Nexo) but don’t like paying for that option if it’s not needed.
Witchfinder said:
Do you want SR+, LR, or Performance?
I assume the P in the title gives it away?IMO there are 16 model 3s on autotrader pretty much all above list price... after 6 months of sales.. But in 3 years? Still think supply will be limited and BIK benefits still around so residuals should be good.2022 should be few more new options but few comparable used ones.
If I had good lease rates in NZ I would have leased I think - but leasing should always cost you more than owning ling term? They have to make a profit somewhere.
I'm leasing my M3P through my company 12k/annum, 36 months, no options - don't want/need the hassle/uncertainty of reselling and when I looked at the figures based on predicted residuals, then the financial benefit buying vs leasing was minimal for me.
You really need to do your own detailed analysis.
You really need to do your own detailed analysis.
Contract hire means you can claim half the vat back (assuming you are vat-registered) which gives a discount of about 8% on total cost. You have more certainty on cash flows from this method and protection from risk of higher depreciation
Buying outright gives a small advantage in corp tax cash flow (which by the way leading companies are not allowed to benefit from) - tho less good if CT rates go up! But if you have cash lying around and not getting significant interest income from it then the saving in contract hire interest should push you this way.
The biggest benefit of buying outright is probably flexibility. So you can sell the car at any point or keep longer than three years.
Buying outright gives a small advantage in corp tax cash flow (which by the way leading companies are not allowed to benefit from) - tho less good if CT rates go up! But if you have cash lying around and not getting significant interest income from it then the saving in contract hire interest should push you this way.
The biggest benefit of buying outright is probably flexibility. So you can sell the car at any point or keep longer than three years.
I'm in a similar position whether to buy outright (on HP) through my company or lease one.
Leasing doesn't seem seem quite as straight forward as with regular ICE cars as picking up in person (rather than getting it delivered to me) for a car that can be miles away which I don't really want to do.
With the Tesla app, it seems that with some leasing companies, you can't actually use the app as the car isn't technically yours and the owner falls under the entire fleet they supply which would suck as it has some nice features and sets it apart from EV's.
50% VAT back on monthly payments is good though.
Buying outright gives you 100% tax relief so an M3P car slashes approx £10k off my next corporation tax bill.
Its an company asset too (unlike a lease with nothing to show for it at the end) but on the flip side, you'll be taxed on when you come to sell it on.
Depreciation would help with this tho or the tax on the next new car purchase will offset it, but at some point, you have to pay something taxwise on it.
Being able to get rid of whenever is the biggest thing for me though as the tech is still very new plus if buying one from Tesla inventory means I could get it sooner hopefully.
Right now I'm at 70/30 on buying outright on hire purchase - unless anyone can convince me otherwise
Leasing doesn't seem seem quite as straight forward as with regular ICE cars as picking up in person (rather than getting it delivered to me) for a car that can be miles away which I don't really want to do.
With the Tesla app, it seems that with some leasing companies, you can't actually use the app as the car isn't technically yours and the owner falls under the entire fleet they supply which would suck as it has some nice features and sets it apart from EV's.
50% VAT back on monthly payments is good though.
Buying outright gives you 100% tax relief so an M3P car slashes approx £10k off my next corporation tax bill.
Its an company asset too (unlike a lease with nothing to show for it at the end) but on the flip side, you'll be taxed on when you come to sell it on.
Depreciation would help with this tho or the tax on the next new car purchase will offset it, but at some point, you have to pay something taxwise on it.
Being able to get rid of whenever is the biggest thing for me though as the tech is still very new plus if buying one from Tesla inventory means I could get it sooner hopefully.
Right now I'm at 70/30 on buying outright on hire purchase - unless anyone can convince me otherwise
Fastlane said:
I'm leasing my M3P through my company 12k/annum, 36 months, no options - don't want/need the hassle/uncertainty of reselling and when I looked at the figures based on predicted residuals, then the financial benefit buying vs leasing was minimal for me.
You really need to do your own detailed analysis.
Pretty much the same here, I just didn't want uncertainty at the end and the business lease deal I got worked for me.You really need to do your own detailed analysis.
I did a PCP type of thing as I wanted the right to own the car at the end of the rental period with the price set today.
I didn't want to buy as it's very difficult to guess the residuals as its a brand new product that has never existed before. If you lease and want to buy it as you like it at the end of the lease period and the residuals are high the lease company will take you for a ride.
I didn't want to buy as it's very difficult to guess the residuals as its a brand new product that has never existed before. If you lease and want to buy it as you like it at the end of the lease period and the residuals are high the lease company will take you for a ride.
I've never bought a car via PCP before so maybe I'm missing something but, having had a quick look at the numbers, I'm struggling to see why it's appealing.
Just looking at a basic M3P (no options), over 4 years, 10k miles per year
A PCH deal is £32071
The PCP deal is £37008
Factor in the vehicle tax due with the PCP (which is included in PCH) then I calculate you pay £5.9k more for the PCP over 4 years.
is the only benefit for this additional £5.9k the fact that you have the option to buy the car at the end of the term?
Just looking at a basic M3P (no options), over 4 years, 10k miles per year
A PCH deal is £32071
The PCP deal is £37008
Factor in the vehicle tax due with the PCP (which is included in PCH) then I calculate you pay £5.9k more for the PCP over 4 years.
is the only benefit for this additional £5.9k the fact that you have the option to buy the car at the end of the term?
mids said:
jamoor said:
I did a PCP type of thing as I wanted the right to own the car at the end of the rental period with the price set today.
I didn't want to buy as it's very difficult to guess the residuals as its a brand new product that has never existed before. If you lease and want to buy it as you like it at the end of the lease period and the residuals are high the lease company will take you for a ride.
I've never bought a car via PCP before so maybe I'm missing something but, having had a quick look at the numbers, I'm struggling to see why it's appealing.I didn't want to buy as it's very difficult to guess the residuals as its a brand new product that has never existed before. If you lease and want to buy it as you like it at the end of the lease period and the residuals are high the lease company will take you for a ride.
Just looking at a basic M3P (no options), over 4 years, 10k miles per year
A PCH deal is £668 per month
The PCP deal is £771 per month
Factor in the tax due with the PCP (which is included in PCH) then I calculate you pay £5.9k more for the PCP over 4 years.
is the only benefit for this additional £5.9k the fact that you have the option to buy the car at the end of the term?
Essentially I’m paying for the risk of depreciation to be on the leasing company while we see how this all pans out. Nobody can accurately guess how much these cars will be worth after 4 years. If BMW, Mercedes etc catch up and release cars then it’s possible that their values will collapse. If they don’t then residuals may remain surprisingly strong. We can’t use the model S as a benchmark as it was ridiculously expensive to begin with.
Edited by jamoor on Saturday 14th December 12:14
jamoor said:
Essentially I’m paying for the risk of depreciation to be on the leasing company while we see how this all pans out. Nobody can accurately guess how much these cars will be worth after 4 years. If BMW, Mercedes etc catch up and release cars then it’s possible that their values will collapse. If they don’t then residuals may remain surprisingly strong. We can’t use the model S as a benchmark as it was ridiculously expensive to begin with.
Yes, agree with this. It's been playing on my mind as well as I could see myself owning a M3P for more than 4 years and I figured PCP would be the way to do that without exposing myself to the worst case depreciation risk (and the risk of owning a lemon), I just hadn't realised the cost of that 'safety' would be so high compared to PCH.Having said that, I've got a deposit down on a Polestar 2, so I'm going to be waiting until they reveal their pricing next month before making any decisions.
mids said:
I can see how spreading the vehicle cost over much more than the 4 year PCP term makes the depreciation work out ok. It just surprised me to work out that it's a £6k cost to have that option (which would sting if choosing to hand it back).
Indeed. What’s the excess mileage on the lease deal?Gassing Station | Tesla | Top of Page | What's New | My Stuff