Leasing a Tesla Model 3 through work...?

themaidenmaniac

Hi guys, merry christmas & a happy new year.

An interesting proposition has come up for next year which I am currently debating and was wondering other peoples thoughts or experiences of this.

I've never gone for a lease because I have always liked to own my own vehicles but now there is no benefit in kind tax for 2020 it has become quite appealing.

The lease for the tesla performance is £871 a month, which comes down to an actual cost after tax savings of £600 a month for 20k miles over 3 years, and the car is a £52k car if you were to purchase in cash.

Multiply that up by 36 months and you've got a £21,600 cost.

Other savings-

Estimated petrol to electric saving on 20k miles - £2400
Free insurance & damage cover - est £1800 over 3 years
Car Tax - Exempt (saving of £375 over 3 years on current car)

Those savings bring the lease down to just over £17k or £472 per month.

There also appears to be an option to purchase the car after the lease, and assuming it depreciates by 50% over the 3 year period as per current teslas and they offer a competitive rate on the car (allegedly), an option to buy should be around £26-30k.

£52k - £17k (lease cost to me) comes in at about £35k so any option to buy under that would be considered a pretty decent saving.

As far as i know thats all the cost associated, and it looks pretty appealing for what would be a bit of a once in a lifetime car with some super acceleration!

Interested in what you guys reckon. Cheers!

DrEskimo

Only you can really decide how much you think it's worth paying for a Model 3 Performance. Of course, being MSE, I would apply the same budgeting limits as with any purchase and look at your budget to determine how sensible it is having £600 put towards a car. As you say, you will make savings in insurance, servicing and VED compared to your current car, but how does that compare to your current outgoings? I'm guessing your current car is bought outright, so what is the anticipated depreciation over the next few years?

Another option of course is to either go for a cheaper EV offered by your company, or indeed a used EV. You will get all the advantage of the fuel savings and VED, which is likely to make up the bulk of the savings of this company car. It's unlikely to be a Model 3 Performance though! Personally, I run a used battery owned Zoe, and it costs me nowhere near £600 per month, even if I did do 20k miles a year. Your then getting all the benefits of low running costs as well as low depreciation costs (currently very low on used EVs!).

born_again

Is your company making any contribution to a deposit?

Do you have off road parking to charge it?
Will your company be offering free charging at workplace?

gzoom

Two points, pension and final buy out cost.

If you are talking about salary sacrifice you are giving up a % of the £870/month pension contribution for gratification now. On the current NHS scheme assuming you have 25 years left on the scheme, a 2% inflation, and you live for 20 years post retirement, 3 years lease will cost you about £35k in 'lost' pension pay out.

That number isn't terrible as a yearly effect on pension pay out, but if you become tempted to lease for another 3 years that figure becomes £56k, and if you wents nuts and leased for 25 years you're pension would be £35k less PER YEAR!! You can see why you're employer will be keen for people to take up salary sacrifice, as it reduces their future pension bill considerably- they aren't offering the 'deal' for no reason.

Don't forget to add to that the actual cost of the car!

The second point will be directly related to the first, if you are 100% sure you can buy at the end of 3 years that will massively reduce the effect on your pension, but you need to make sure you can 100% buy. On the NHS scheme I've seen nothing written down in black and white on this.

Depreciation on these cars tends to be low, personally look at the non P, versions they are not much slower in real life (the P is a proper supercar when it comes to 0-60 times), and hold their value better. I would work on 33% as depreciation over 3 years, based on our current Tesla and Autotrader values at 3 years and 45k miles.

For reference our Model X cost £71k in March 2017, if I was to put it for sale for £50k today it would be one of the cheapest Xs onsale, so £636/month, without impact on pensions and option to keep for alot longer - ours was purchased on basis it'll be kept for at least 8 years and 120k miles.

If you can afford the initial purchase, I would buy the LR AWD Model 3 and aim to keep it for at least 120K miles. Interms of 'saving money' and enjoyment of a great car that would be the best balance.

Ultimately just make sure you under the true cost of any salary sacrifice scheme on your pension pay out - delayed gratification is the corner stone of MSE, do the numbers for your personal pension situation before doing the man maths on the car.