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Financing model 3 in the UK.

Discussion in 'Reserving, Ordering, Production, Delivery' started by Timbob, Mar 1, 2017.

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  1. Timbob

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    Here are my thoughts.

    It makes sense to me to acquire a car using the financial model of paying for what you use rather than buying the car..ie a lease style whose monthly costs reflect the drop in value of the car over the term and additionally of course finance costs which are 5-6% per annum in typical UK deals.

    My thought is.. I don't want to pay finance charges, if I pay up front a lump sum representing the depreciation costs over the term I could save some money. All other terms, annual mileage , condition etc as per normal lease when giving the car back at the end of the term.



    I have just spoken to Tesla UK and this is not an option. They suggested I speak to the leasing company; they said they only do monthly payments with finance charges of course as that is how leasing companies make their money.

    Surely Tesla should offer this directly as significant finance charges could be avoided by customers.

    There are customers out there where this deal makes sense like myself who are cash rich and low income such that a monthly standard lease could cause eligibility problems as well as having the extra finance charges.
    I guess this is a variant on the Personal Contract Purchase deal.

    Maybe Tesla management read this blog and can comment on this.

    Tim
     
  2. MelindaV

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    One of the downfalls of a lease is you have zero equity in the car... if you pay the lease upfront and the car is wrecked two months in, you are out the rest. The lease company is reimbursed from insurance for it being totaled, but you out. Insurance will (at least not here, YMYV in the U.K.) not cover your lease interest in the unused years/months remaining.
    Typically, a lease is not going to save you anything. The amount paid in is quite significant and after the two/three years you have nothing for it and makes most sense for businesses or individuals that can right it off as a business expense. If you have the cash to cover an entire lease up front, why not purchase? At least that way after two/three years you would have equity (possibly equal to what the lease would have cost) and could sell it for cash back.
     
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