Should I lease or buy a Tesla?

Who this guide is for

This guide is for the United States. Leasing rules, taxes and Tesla’s leasing availability vary by state, and we quote no prices, because they change and depend on your credit and your state. It uses a state consumer agency’s plain-language summary, Wisconsin’s, together with Tesla’s leasing page. The federal Consumer Leasing Act and some state laws may give you additional rights not covered in your lease agreement, as that agency notes, so check the rules for your state.

The short version

Leasing is a way to use a vehicle without buying it. You pay for the use, return the car and walk away, subject to the terms of the lease. Buying means you own the car and keep it after you finish paying. Which suits you depends on how you drive, how long you keep cars and what you want at the end.

Lease or buy, side by side

This table follows the Wisconsin agency’s comparison.

	Leasing	Buying
Ownership	You do not own the car. You return it at the end unless you choose to buy it.	You own the car and keep it when financing ends.
Monthly payments	Usually lower, because you pay for depreciation during the lease, plus rent charges, taxes and fees.	Usually higher, because you pay for the whole price plus interest, taxes and fees.
Early termination	You are responsible for early termination charges.	You are responsible for the pay-off amount.
Future value	The lessor carries the risk of the car’s future market value.	You carry that risk when you sell or trade.
Mileage	Most leases limit miles, often 12,000 to 15,000 a year. You can negotiate more for a higher payment.	As many miles as you want, but higher mileage lowers resale value.
Wear	Most leases limit wear. Extra charges if you exceed it.	No limit or charge, but wear lowers resale value.
End of term	You may have a new payment to buy the car or lease another.	No further payments after the loan ends.

What leasing looks like at Tesla

Tesla’s leasing page describes the process. You choose “Lease” as the payment method when you order, and Tesla’s leasing calculator in the Design Studio helps you see the options. Tesla says leasing is not available in all states, and that additional taxes and fees may apply, and that estimated payments are not guaranteed and are subject to underwriting.

A few points from that page:

• You can apply for a lease any time after you place your order. Approvals are valid up to 60 days, and if your delivery date moves past the expiry you may need to reapply.
• Tesla says at least one hard pull of your credit report is required.
• If you lease with Tesla, you must e-sign any required agreements in the Tesla app before you take delivery, and Tesla’s leasing page lists insurance requirements.
• The page has a Lease-End Information section on return options, a checklist and a self-inspection.

If you are in the UK, where Tesla’s configurator lists Personal Contract Hire, see Tesla Personal Contract Hire in the UK: what to check before you sign. If a promotional lease or rate is part of your decision, see how Tesla promotions work for what to ask. For the day itself, see what to expect at a Tesla delivery center.

Questions that decide it

These are our questions, not Tesla’s or the agency’s:

• How many miles do you drive in a normal year? Count your longest year, not your average.
• How long do you want to keep the car? If the answer is “as long as it runs”, buying fits more naturally.
• Do you want to own the car at the end, or hand it back and decide again?
• How careful are you with wear? Dents, curb damage and worn tires are what end-of-lease charges look at.
• Is the monthly payment the only number you are comparing? The agency lists beginning, middle and end-of-lease costs, so compare the whole cost over the time you will have the car.

Read the contract for these terms

The agency lists what you can compare and negotiate. Look for them in any lease offer:

• the agreed-upon value of the car (a lower value can reduce the monthly payment)
• up-front payments, including the capitalized cost reduction
• the length of the lease
• end-of-lease fees and charges
• the mileage allowed and the per-mile charge for extra miles
• the option to purchase at lease end or earlier
• whether the lease includes gap coverage, which protects you if the car is stolen or totaled

A lease agreement is complex, the agency says, so be sure you understand it before you sign. We are not financial advisers: for your own case, ask the lessor to explain each term and consider a second opinion.

If you lease: record the car on day one

Excess-wear charges are assessed against standards written in your lease. The easiest way to avoid a dispute about what was already there is to record the car’s condition when you take delivery. TSL Check is the iPhone app we make for that moment. Its delivery checklist takes you around the car area by area, with a photo and a note on whatever you find, and a report you can keep with your lease paperwork (how it works). It keeps your photos on your iPhone and does not touch your lease or payments.

If you buy used instead, see what to ask a private seller.

Whatever you find at delivery, ask the advisor to record it before you sign, and keep a copy.