Tesla partners with 2 banks to offer new lease products

Article by Anita Panait, on April 4, 2013

Tesla Motors has partnered with USBank and Wells Fargo Bank to come up with vehicle financing and leasing products that will enable consumers to lease a Tesla Model S for an effective monthly payment of around $500, following a 10-percent down payment and calculated savings. The 10-percent down payment will usually be covered by federal and state tax credits available on electric vehicles.

It should be noted that while the actual monthly payment is $1,199, which, according to Tesla, is the equivalent cost to a gasoline-powered car would be around $543 a month for an 85-kW car, once factors like incentives and the benefit of not having to pay for gasoline and oil changes are considered.

Some of those equivalent factors are a little obscured, like a potential business-tax benefit and the value of the consumer’s time saved through driving in the carpool lane and not spent on pumping gas.

In a statement, Tesla said that when considering the savings from using electricity instead of gasoline, depreciation benefits and other factors, the “true net out of pocket cost” to acquire a mid-range Model S drops to less than $500 a month.

Tesla added that after 36 months, the residual value will be tied to that of a Mercedes-Benz S-class sedan, which is at 43 percent, according to ALG.

According to the carmaker, the customer is technically not leasing the Model S but is building equity over the course of a 66-month loan, with an option to walk away after 36 months with a guaranteed residual value.

A customer can also pay off the balance of the loan any time he wants. Tesla chief executive Elon Musk remarked that a customer does not have to worry about buying a car as he can trade it in after three years. He quipped that the scheme has all the convenience of a lease, but the value of ownership. He also noted that it gives a customer the right to give the car back to Tesla, but not the obligation.

Topics: tesla, leasing

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