- In a rare move, Tesla will offer leases on used Model 3 sedans and Model Y SUVs
- The deal applies only in California and Texas
New car shoppers often face a choice that used car shoppers don’t: buy or lease? New car leases are relatively common.
Tesla, however, has announced a new program that lets customers in California and Texas lease a used Model 3 or Model Y.
Announced on the social media site X (formerly known as Twitter), the offer includes no down payment and a monthly payment of $225.
Lease vs. Buy
- Leasing typically means a lower monthly payment, but equates to long-term rental
For those with strong credit, a lease can offer a much lower monthly payment than purchasing a car. The caveat? You don’t own a car when the lease ends, though you can often buy it at a pre-negotiated price. Many lessees roll over into a new lease every time their lease ends, an inexpensive way to keep access to a car.
Related: KBB Car Leasing Guide
However, used car leases, while they exist, are relatively rare. The banks operated by automakers generally don’t offer them, though some dealerships have relationships with separate financial institutions that let them offer the rare used car lease.
As Usual, Tesla’s Move Is Divisive
- Fans call it exciting; critics say it’s desperate
As with most things Tesla does, the move immediately triggered debate online. Fan site Teslarati called it “a great deal” that consumers “won’t want to pass up.” Electric vehicle (EV) enthusiast site Electrek said it comes as Tesla “desperately tries to move vehicles before the end of the quarter.” The Drive said it “borderline feels like a fire sale moment.”
Tesla is facing multiple threats to its dominance of the EV market. In September, the federal government will end a $7,500 tax credit on new EV sales and a $4,000 tax credit on used EVs.
The White House also dealt Tesla a massive blow in July when it stopped enforcing all fuel economy rules. Those rules had required automakers that missed fuel economy targets to buy credits from automakers that achieved them. For many years, those credits earned Tesla more money than car sales.
Tesla sales peaked in February of 2023 and have not recovered since. The company has few new cars in its development pipeline and has bet its future on autonomous robotaxis, a market where it competes with several more established companies.
