Should I lease or finance?

[Okanoganjim]

So the lessor would not have to make more than a single lease payment before exercising the buyback? Is that true??

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[voxel]

I will lease and buyout in a month or two. Leasing for 2 years is insane. You pay $22K in interest (because the MF is basically 18%) and only $5K in depreciation because of the high RV. I think 3 year leases are slightly better with 14% equiv MF but still terrible.

 

[voxel]

So the lessor would not have to make more than a single lease payment before exercising the buyback? Is that true??

From the language of the contract - yes. I had experts chime in on my lease.

https://forum.leasehackr.com/t/tesla-cybertruck-lease-buyout/622627/4

 

[mk9027866]

With the current lease buyback offer, can someone check my math?
scenario, lease CT AWD with immediate buyback to capture the $7500 fed EV lease credit

I’m pretty sure the buyback number is after all payments are made…

 

[ABILISK]

I couldn’t be restricted to 15K mi/yr. If you know, for a fact, that you’re going to buy the truck, which you will, as it’s the greatest vehicle ever conceived, just buy it.

 

[shopaholic]

I am not sure you could do buy back in a month or two, unless they expressly said so.

 

[voxel]

I am not sure you could do buy back in a month or two, unless they expressly said so.

Clause 32.

1. PURCHASE OPTION. You may purchase the Vehicle from us if you are not in default, on an AS-IS, WHERE-IS basis, at any time before or at the end of the Lease Term. To purchase the Vehicle, you must pay the sum of (a) the amount in Section 14 if you purchase the Vehicle at the end of the Lease Term, or the Adjusted Lease Balance plus the purchase option fee in Section 14 if you purchase it before the end of the Lease Term, plus (b) any related official fees, such as sales tax, other taxes, title, tags, license and registration we are required to collect, plus (c) any past due Monthly Payments and any other amounts you owe under this Lease. If you purchase the Vehicle, you will transfer title, re-register the Vehicle and remove and return the license plates (if required by law) within 30 days after purchase or any shorter time required by law. You will sign any additional documents necessary to effect the purchase. We may, at our option, apply any credits or security deposit under this Lease towards the purchase price

 

[kpanda17]

Key statement, feel you need to have Tesla give that number for 1-2 month lease
Would be interesting to see that number.
Fix my spread as I used the section 14 number of $54K, it’s higher but what is it?

 

[voxel]

Key statement, feel you need to have Tesla give that number for 1-2 month lease
Would be interesting to see that number.
Fix my spread as I used the section 14 number of $54K, it’s higher but what is it?

It's all in the contract

" (3) Adjusted Lease Balance: The Adjusted Lease Balance equals the Adjusted Capitalized Cost minus the sum of all accrued monthly Depreciation for each Monthly Period before termination of this Lease and the Monthly Period in which this Lease terminates."

The adjusted cap cost is listed in your contract

Discussed in https://forum.leasehackr.com/t/tesla-cybertruck-lease-buyout/622627

The key thing is... the CT lease is mostly interest and very little depreciation. It's an immediate buyout candidate.

 

[kpanda17]

It's all in the contract

" (3) Adjusted Lease Balance: The Adjusted Lease Balance equals the Adjusted Capitalized Cost minus the sum of all accrued monthly Depreciation for each Monthly Period before termination of this Lease and the Monthly Period in which this Lease terminates."

The adjusted cap cost is listed in your contract

Discussed in https://forum.leasehackr.com/t/tesla-cybertruck-lease-buyout/622627

The key thing is... the CT lease is mostly interest and very little depreciation. It's an immediate buyout candidate.

Can we do a quick estimate? 2 months of depreciation
Typical lease early term is a fee plus all lease payments, not the case here?

 

[voxel]

Can we do a quick estimate? 2 months of depreciation
Typical lease early term is a fee plus all lease payments, not the case here?

Not true at all.

That's like paying all interest (and depreciation) on a loan even if you pay it in the first month. Early lease buyouts do not pay for unearned rent charges (interest).

 

[kpanda17]

Not true at all.

That's like paying all interest (and depreciation) on a loan even if you pay it in the first month. Early lease buyouts do not pay for unearned rent charges (interest).

My bad, confused it with turn in
Like breaking apt lease
You’re right buyout is diff, keeping

 

[mongo]

Just leased a Beast instead of financing because Tesla just enabled lease buyouts. So I get the lease incentive of 7500 off. Then I can buyout the lease. Wife and I do not qualify for the 7500 federal tax rebate, so I figured this lease incentive off plus a 2k dollar referral code made sense. Then I can decide if I want to keep the CT for longer than 3 years, in which case I will buy out the residual. I also maxed out the lease downpayment which was like 24k. I pick it up on MoNDAY....so excited.

With the current lease buyback offer, can someone check my math?
scenario, lease CT AWD with immediate buyback to capture the $7500 fed EV lease credit

You do not get the $7,500 credit directly, Tesla does and the lease numbers already reflect their adjustment due to it. 45W commercial credit not 30D point of sale.

If going full 3yr term, a $80k AWD costs $100k with buyout:
54,930+695+395+7,500+(36×999).

 

[mongo]

The key thing is... the CT lease is mostly interest and very little depreciation. It's an immediate buyout candidate.

Be aware of the wording around purchase as lease and purchase to resell. For reference, under 30D (as opposed the the commercial 45W), one needs to wait at least 30 days before doing a buy out.

https://www.irs.gov/pub/taxpros/fs-2024-26.pdf

Q6. What factors are used to determine if a transaction is a “lease” for tax purposes? (updated Feb. 3, 2023)
A6. Based on longstanding tax principles, the determination whether a transaction constitutes a sale or a lease of a vehicle for tax purposes is a question of fact. Features of a vehicle lease agreement that would make it more likely to be recharacterized as a sale of the vehicle for tax purposes include but are not limited to:
• A lease term that covers more than 80% to 90% of the economic useful life of the vehicle.
• A bargain purchase option at the end of the lease term (that is, the ability to purchase the vehicle at
less than its fair market value at the end of the term) or other terms/provisions in the lease that
economically compel the lessee to acquire the vehicle at the end of the lease term.
• Terms that result in the lessor transferring ownership risk to the lessee, for example, a terminal rental adjustment clause (TRAC) that requires the lessee to pay the difference between the actual and expected value of the vehicle at the end of the lease. (Note that special rules exist under section 7701(h) for qualified motor vehicle operating agreements that contains a TRAC.)

Q7. What happens if the clean vehicle lease agreement is recharacterized as a sale for tax purposes? (added Dec.
29, 2022)
A7. In the event the clean vehicle lease is recharacterized as a sale, the lessee would need to determine if they are eligible to claim either a Clean Vehicle Credit or a Qualified Commercial Clean Vehicle Credit. The lessor would not be eligible to claim either credit because they would have engaged in a resale of the vehicle.

 

[Vegetaban]

Just leased a Beast instead of financing because Tesla just enabled lease buyouts. So I get the lease incentive of 7500 off. Then I can buyout the lease. Wife and I do not qualify for the 7500 federal tax rebate, so I figured this lease incentive off plus a 2k dollar referral code made sense. Then I can decide if I want to keep the CT for longer than 3 years, in which case I will buy out the residual. I also maxed out the lease downpayment which was like 24k. I pick it up on MoNDAY....so excited.

how does the 7500 work for the lease?

EDIT: Saw later posts discussing this.

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