Would a Leasing Program Benefit Tesla?
Via Auto Remarketing
CINCINNATI - You can’t secure a traditional consumer lease from Tesla. But the company did recently introduce its new Resale Value Guarantee program that offers a similar deal.
The program offers to buy back a Model S between 36 months and 39 months at a guaranteed residual.
According to Tesla officials, "When combined with a car loan provided by Tesla's banking partners, this program gives customers the functional equivalent of a lease."
But there’s a caveat.
The program is positioned as a lease program, but the owner still has to finance and pay taxes on the vehicle.
According to Scot Hall, executive vice president of Swapalease.com, these and other factors are keeping Tesla from enjoying the true benefits of a leasing program.
The car brand has introduced a program that is masked as a lease, but finding a way to offer a traditional lease will benefit Tesla's ability to compete against other luxury brands, as well as additional benefits for consumers, Hall suggested.
In April of this year, Tesla did launch a leasing program for small and medium size buisnesses in an effort to provide companies "the ease and simplicity of being able to deduct payments from their business taxes," according to the company. For more on Tesla business leasing, see the automaker's blog post here.
Hal explained that many other luxury brands use consumer-facing leasing programs as a way to ramp up growth as well as an outlet to push new EVs that compete directly with Tesla models.
"A standard lease program would benefit customers and help Tesla grow its brand further and compete against other luxury makers that are now focusing on EV technology," said Hall. "Look at the success luxury brands such as BMW and Mercedes-Benz have had as a result of their lease programs, which see between 50 percent and 70 percent lease rates for higher-end models. These lease programs have played a large part in the growth these brands have enjoyed over the years, particularly as they introduce EV models to compete against Tesla."
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →