TL;DR Tesla's monthly payments underestimate its resale value so you should buy not lease

As The Model 3 and now the Model Y have lease plans, lots of buyers will be considering whether to lease or to buy. Here we look at the two options and show you why it is better to buy.

Option 1 - Tesla Lease

Tesla's default choices are a $4,500 downpayment and 12,000 miles per year. Β In our study, we moved the miles to 15,000 miles/year and $0 downpayment. Your monthly payment is $686/mo and for the first payment, you have an additional $695 acquisition fee.

For this evaluation we will ignore the tax breaks, tax rate, and assume that any maintenance is independent for the ownership option.

For 36 months, the total payments is $25,391.

Ownership of Model Y = $0.

Option 2 - Financing

48 Months

The option for financing from Tesla is from is for a fixed 2.49% and for 48,60, or 72 months. The Tesla calculator assumes that the value of the Model Y at the end will be 0, as the loan is paid off. An easy way to check this in Excel is with the formula below:

=FV(2.49%/12,48,1122,-51190); which calculates the future value of the loan. The details are:

  • 2.49% per year, or 2.49%/12 monthly for
  • 48 months, with
  • $1122 per month payment, and
  • $51,190 financing

This gives a future value of $22.46. What this means is that the loan is essentially paid off, and you own the vehicle, but ignores its residual value. Also, it costs you $53,835 for this option over 48 months or $40,376 over 36 months.

What do you get for your additional investment into a loan over a lease? You get to own the Model Y at the end of 48 months. Now using the Keemut depreciation model which looked into all Model 3, X, and S depreciation over five years (along with other luxury cars), we have come up with a depreciation model which shows that the value of the Model Y.

At the end of your loan, the value of the Model Y is about $26,600.

In the chart below, the blue line is the value of the Model Y, think of it as the value if you bought it in cash. The area is the value of the Model Y with a loan. Because you don't own the vehicle while it has a loan, you only have the portion of the value that is paid off. By the 48th month you have made all payments and you own the full vehicle amount.

For 48 months, the total payments is $53,835.

Value of Model Y at ownership = $26,641.

If you sold it after year 4, your monthly payment would be the (amount paid - value of the vehicle)/48 months = $566/mo.

Option 3 - Financing

60 Months

Looking at the 60 month option, you will pay less monthly, but overall you end up paying ~$600 more than the 48 month option in total payments. You also "lose" out on the equity of the Model Y from month 49-60.

For 60 months, the total payments is $54,496

Value of Model Y at ownership = $21,953.

If you sold it after year 5, your monthly payment would be the (amount paid - value of the vehicle)/60 months = $542/mo.

Option 4 - Financing

72 Months

For 72 months, your total payments come out to be $55,162 and the residual value comes to $18,090 at the end of 72 months. On a monthly basis, you would be paying about $515/mo for 72 months if you sold the Model Y right after paying it off.


Tesla gives multiple options so consumers can decide which option is best suited for their needs. From our perspective, what Tesla is doing is underpricing the resale value in comparison to the lease option. Based on cost savings, the 48 month option would be the most ideal in terms of ownership and getting the most value for your investment.

Tax Breaks, Sales Tax, and other variables

For business owners, the lease option is usually better since you can write off the full amount. If you finance, you cannot write off the depreciation and interest. For more information, it will depend on each company's tax issues and discussing with an accountant is the best way to move ahead in your decision.

Since these variables are specific to each user, we did not include them here. If you want to customize the calculation, you can sign up for Keemut where we you can add all the expenses and revenue streams to get a more granular look at your own case.