Tesla Motors Offers Lower-Cost Lease Rates, Happiness Guarantee on Model S

As Tesla Motors CEO Elon Musk is only too happy to admit, Tesla Motors would prefer you lease, rather than buy a Tesla electric car, since it ensures at the end of the lease period Tesla knows exactly where each and every car goes, ensuring quality and consistency in the used car market.

A new lower-cost lease deal means it's even easier and cheaper to own a Tesla Model S.

A new lower-cost lease deal means it’s even easier and cheaper to own a Tesla Model S.

It also means Tesla gets to benefit from selling the same car twice, offering pre-owned lease cars for sale as part of a future, planned, certified used car program.

To encourage more people to lease rather than buy, Tesla has always offered some pretty creative lease packages, ensuring that owners get to own a Tesla Model S for as low a monthly cost as possible — but now the Californian automaker has announced a whole new lease deal with even lower monthly payments.

As detailed yesterday on the official Tesla Blog, Tesla Motors [NASDQA:TSLA] is now offering what it calls “Significantly Improved Leasing” for Tesla customers wishing to lease rather than buy their new car. What’s more, Tesla claims this could lower customers’ lease payments by as much as 25% on a brand new Tesla Model S.

Operating with US Bank, which Tesla says has a much lower cost of capital than it can offer by itself, the new Lease scheme also adds something called the Tesla Happiness Guarantee: a scheme which allows the lessee to return their new car back to Tesla within the first three months without any ongoing financial obligations.

The new Tesla Happiness Guarantee means those who don't like their new cars can hand them back in the first three months for no hidden fees.

The new Tesla Happiness Guarantee means those who don’t like their new cars can hand them back in the first three months for no hidden fees.

The only stipulation, says Tesla, is those making use of the new Tesla Happiness Guarantee won’t be allowed to immediately lease another Model S, essentially a cooling-off period designed to prevent customers from continually evoking the Tesla Happiness Guarantee in order to continually upgrade their car.

When it comes to those lease customers who have a legitimate reason for upgrading however — such as a new model with features not available on their current car — Tesla CEO Elon Musk said that early lease upgrades will now be possible,  provided lessees are willing to pay what’s called a ‘pass-through fee’: a charge made to cover the difference between the cost of the car new vs its used value difference.

Due to the reduced lease rates, it’s now possible to lease an entry-level Tesla Model S  60 for $777 per month for 36 months based on 12,000 miles per year, with $6,477 due at signing.

That’s significantly cheaper than the same car purchased on a Tesla-based loan agreement, which works out at $972 per month over 72 months with a downpayment of 10 percent of the value of the car and an APR of 3.0 %.

Are you looking to buy a new Tesla Model S? Are you tempted by the new lease deals? Or do you still prefer to buy your cars outright?

Leave your thoughts in the Comments below.

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  • Dennis Pascual

    The kicker is that mileage limit. It’s similar to the buy-back guarantee program that Tesla had launched previously.nnnIn my case, I’m already at 23,000 miles and that’s with 11 days short of my first year with the Model S. So, purchase is the only way to go.

  • Kenneth_Brown

    Even with a lower outlay per month by leasing, the cost is still substantial and only realistic for very few people. After the 3 years, you have nothing. If you purchase the car, you might still have some value left when you’re finished making payments.