This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Why Can't You Lease a Tesla?

PORTLAND, Ore. (TheStreet) -- Those looking to lease a Tesla anywhere are in the same frustrating fix as those trying to buy one in New Jersey or Missouri: They just can't.

Last year, Tesla introduced its Resale Value Guarantee, which allows owners of its Model S to sell their financed vehicle back to Tesla between the end of months 36 and 39, regardless of the loan's term. That buyback price is 50% of the original base purchase price of the 60 kWh Model S plus 43% of the original purchase price for all of the options, including the upgrade to the 85 kWh battery pack -- not including taxes, fees and accessories. What it isn't, however, is an auto lease.

Not only do you have to finance the vehicle as you would if you were buying it, but you're paying taxes on the full price of the vehicle rather than on the amount the car will depreciate over the lease term -- the portion of the vehicle's value that you'll use during the lease. Meanwhile, you're still limited to 15,000 miles a year while you're financing between 60% and 90% of your vehicle?

Why does Tesla prefer this method? Because, as you may have gleaned during the past few months after watching Tesla deal with the states, it does not like third-party involvement. It doesn't want a dealer in the mix, it doesn't want a bank backing its deals -- it wants a direct sale. While announcing a small-business version of the Resale Value Guarantee this year, Tesla left the distinct impression it doesn't think much of standard lease agreements:

While customers have become accustomed to lease agreements that run as long as 10 pages, we found that we could say all that needed to be said in less than three pages -- and it's written in plain language. In keeping with the Tesla way of doing things, our customers can handle and sign their lease agreements completely electronically. Customers are able to view an electronic version of the lease agreement upfront before delivery. Even the signature process at delivery is simple: a one-button tap on the 17-inch touchscreen in their new Model S is all it takes.

Tesla sees its financing options as an extension of its innovation, asserting that "when combined with the fuel savings of Model S, [they] provide an attractive value proposition compared to what's available for a gasoline-powered car." What the company isn't saying is that there's no way it can offer a traditional lease and still provide its customers the U.S. government's $7,500 Plug-In Electric Drive Vehicle Credit.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs