Tesla continues to offer enticingly cheap leases on the Model 3, creating in effect a low-cost car that even rivals used prices.
The face-lifted 2024 Tesla Model 3 rear-wheel-drive version has been offered since May with a $299 per month lease, not including taxes and fees. “This is their way to effectively get into the cheaper car market,” Pat Ryan, Founder & CEO of CoPilot, an AI-assisted car shopping app, told me. Ryan said the Model 3’s leasing terms are similar to those being offered by the Honda Civic Sport, which has a much lower MSRP but similar monthly lease payments.
The Logic Behind the Low-Cost Lease: The lease is so compelling that it doesn’t seem to make sense on its surface, according to Ryan. “They’re subsidizing this in some way, shape, or form,” he said. Tesla is saying in effect, “‘we’re going to make our lease deal twice as good as our purchase deal but you have to give us our car back. Which could [suggest] that they want it for the Robotaxi,” he said, alluding to the fact that you have to return the car at the end of the lease.
Abundant Used Model 3s = Cheap (But That Mileage): Used Model 3s can be purchased on the cheap right now partly because of the massive market dump by Hertz as it jettisons its Model 3 rental fleet. Hertz prices start as low as $20,000 for a 2023 Model 3. And used Model 3s on Tesla’s website start at under $24,000. But keep in mind that the lowest-priced Model 3s are either older (e.g., 2018) or very high-mileage (high-mileage cars typically rack up more than 15,000 miles/year).
Don’t forget $4,000 Used EV Tax Credit: If the car qualifies for the used EV tax credit (which in some cases is point of sale like the $7,500 new EV credit) that may be enough to push buyers off the fence since that could potentially bring the price to below $20,000. But keep in mind that the used EV must be from a licensed dealer, the price must be $25,000 or less and must be a model year at least two years before the current calendar year, according to the IRS. For example, in 2024, only EVs from model year 2022 or older would be eligible.
Better to lease? If the Model 3 doesn’t qualify for the tax credit, it might make more sense to lease the redesigned 2024 Model 3 with all of its upgrades. Especially if you’re particular about mileage and age, aka, wear and tear. On Tesla’s website, for example, a 2021 Model 3 Standard Range Plus Rear-Wheel Drive model with under 9,000 miles — considered very low mileage and low wear and tear — generally commands prices of over $28,000. But more typically these low-mileage Model 3s are priced above $30,000. That’s not so cheap. Compare that to a 2024 Model 3 lease at $299/month with $2,999 down for 36 months and 10,000 miles/year. To wit, a leased 2024 Model Y (before taxes and fees) can be about half that of a low-mileage used Model 3 and you don’t have to take a resale depreciation hit if the market goes south.
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June 09, 2024 at 02:14PM
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2024 Tesla Model 3 Killer Lease Competes With Used Model 3 Prices - Forbes
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