Leasing a Tesla vs. Buying a Tesla: Pros and Cons of Each

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Leasing a Tesla vs. Buying a Tesla: Pros and Cons of Each

As a Tesla enthusiast, one tough decision you’ll have to make is whether to buy or lease a car. Your budget and lifestyle will certainly influence your decision. Tesla EVs are increasingly popular due to their advanced technology, futuristic design, and zero emissions. Leasing is now a popular option, but is leasing a Tesla worth it? Is owning a Tesla the better option? Leasing and owning a Tesla are two paths to getting behind the wheel of this luxurious electric vehicle. While both have advantages, you need to consider their differences before making a decision. Let’s look at the pros and cons of leasing and owning a Tesla, associated costs, tax incentives, long-term commitments, and more.

Leasing a Tesla vs. Buying a Tesla: Side by Side Comparision

Buying a TeslaLeasing a Tesla
What it meansBuyer has full rights to the EV for lifeLessee has limited rights to the EV, and for a specified period
OwnershipThe buyer owns the vehicle after the completion of paymentsThe lessor retains ownership rights
Cost of acquisitionHigher monthly installment Lower monthly installment 
Security depositA high initial amount of deposit requiredNo security deposit required
Mileage limits/restrictionsNo mileage limitsHas annual mileage limits
Additional feesTaxes and registration feesNone 
Trade-inIt’s not as easy to trade in your Tesla for newer modelsHigher flexibility to trade in and exchange the vehicle for newer models
CustomizationYes, you can easily customizeAllowed but requires owner’s authorization
Tax incentivesA federal tax credit of up to $7,500 for buying a new Tesla$1,500 for the lease of a new Tesla
Credit: Bearded Tesla Guy

Leasing a Tesla vs. Buying a Tesla: What’s the Difference?

Owning a Tesla grants you exclusive ownership of the car and all its features. On the other hand, leasing provides you with temporary access to the vehicle for a predetermined period, with limited access to certain features.

Infographic Buying a Tesla vs Leasing a Tesla

Ownership Cost

When buying a Tesla, the most significant expense is the car’s initial purchase price. Tesla models typically cost more than other vehicles, which can be a significant hurdle for many people. However, several financing options from dealerships or banks are available to help offset the upfront cost. 

You also need to keep in mind the costs associated with owning a Tesla. This includes taxes, registration fees, and maintenance. While fees vary from state to state, they can add up over time, making owning a Tesla really expensive.

Will you be charging your Tesla at home? Tesla recommends installing a wall connector to charge your car, which can cost anywhere from $400 – $1,000, depending on the type of connection you need. Additionally, monthly electricity bills may go up if you drive your Tesla regularly. If you’re leasing and decide to pay for your lease upfront, you will avoid extra fees such as sales tax or dealer markups.  In some cases, you could save thousands throughout the lease period. Some companies even offer discounts for signing multiple leases with them simultaneously.

A Tesla Super Charging station can charge a Tesla within an hour.

©Sheila Fitzgerald/Shutterstock.com

Terms for Buying and Leasing

Leasing a Tesla is an affordable and convenient way to drive this luxury EV, although this option has yet to be available in all states. If you’re interested in leasing a Tesla, your application must be approved for a loan by Tesla.

Tesla auto loans typically have no minimum credit score requirements. However, customers with the highest credit scores (720+) qualify for financing with a lower APR.  The cost and specifications of your Tesla depend on the features and options available when placing an order. Your car’s configuration also determines its purchase price. Taxes and official charges, which can add up to 10% or more of the vehicle’s purchase price, are excluded from a Tesla’s price.

Maintenance Costs

Leasing a Tesla offers an advantage over ownership in terms of maintenance costs. For starters, you’re only responsible for the routine maintenance costs during the lease term. These costs include oil changes, tire rotations, brake pad replacements, and other essential services.

Tesla repairs and maintenance can be costly due to expensive replacement parts and skilled technicians. You can spread out repair costs over a longer period (up to 8 years or 150,000 miles) by purchasing an extended warranty. When you lease a vehicle, on the other hand, you won’t have to worry about paying for repairs.


ev vs regular car insurance
Insurance for an electric car may cost more than insurance for a regular gas-powered car.


Lessees must insure their Tesla with Tesla Lease Trust as the lienholder and extra insured party. Tesla owners are obligated to carry insurance that provides at least:

  • $50,000 of coverage for damage
  • $100,000 for physical injury to one person
  • $300,000 for any accident
  • bodily injury insurance for the entire worth of the car,=
  • Maximum deductible charge of $2,500

Resale Value

Comparing the resale value when leasing or owning a Tesla is challenging. With leasing, the higher resale value belongs to the lessor. If you wish to upgrade your vehicle in a few years, you may be liable to pay a termination fee to end your lease early and may not receive any money back.

On the other hand, when buying a Tesla, the vehicle’s resale value can vary significantly depending on the model, condition, and mileage. The older the model, the lower the value. Similarly, a Tesla with a higher mileage or one with any mechanical issues will have a lower resale value. Tesla owners can customize their cars, but selling them at a loss can be perilous. Investigate its resale value to maximize your return on investment if you decide to sell your Tesla. Leasing a Tesla may offer immediate financial benefits, but you may not recover the whole cost of upgrading your vehicle.

Tax Incentives

Electric vehicle tax credit EV
Under the IRA, EV tax credits are available at different levels to both new and used EVs.


There are tax incentives for leasing and owning an electric vehicle such as a Tesla. If you purchase a new Tesla, you may be eligible for a federal tax credit of up to $7,500, although it’s not easy. This tax credit is available for the full purchase price of the vehicle, not just the monthly lease payment.

Additionally, some states offer incentives, such as state tax credits or rebates, for purchasing an electric vehicle. If you decide to lease a Tesla, you can also take advantage of certain tax benefits. Many states offer tax incentives for leasing an electric vehicle. Also, if you’re leasing a car for your business, you can deduct the standard mileage rate for the commercial miles driven or claim actual expenses, including monthly lease payments.

While leasing a Tesla has certain tax benefits, the IRS does not offer special tax incentives. Potential tax incentives for both leasing and owning a Tesla do exist. However, it’s advisable to research and consult a qualified tax professional to determine if any tax incentives apply to your situation.


You are free to customize or modify your Tesla in both cases. However, if you’ve leased your Tesla, you must first get permission from the vehicle owner to avoid invalidating its warranty. If you own a Tesla, you can do wheel upgrades, window tinting, interior upgrades, and install vinyl graphics, and smoked tail lights.

Leasing vs. Owning a Tesla: 5 Must-Know Facts

  • The cost of owning a Tesla is a bit lower compared with other EV models.
  • Teslas are more fuel-efficient and require less maintenance than gas-powered cars. Lessees won’t have the car for long, whereas owners avoid costly upkeep costs.
  • The average cost of buying a new Tesla ranges from $42,990 (Model 3 Rear-Wheel Drive) to $109,990 (Model X Plaid), while leasing one costs anywhere from $334 per month for three years.  
  • Tesla offers both leasing and financing to buy in 41 states.
  • Leasing a Tesla has an annual mileage limit of 10,000, 12,000, or 15,000 miles, depending on your budget.

Leasing vs. Owning a Tesla: Pros & Cons

Is Buying a Tesla Worth It?

Tax benefits (Up to a $7,500 rebate for buying a Tesla)Much more expensive (higher monthly payments and registration fees)
You have full rights to the vehicleHigher long-term maintenance costs
Freedom to customize vehicle freelyIt’s not easy to upgrade to newer models
Freedom to move anywhere

Is Leasing a Tesla Worth It?

Highly affordable (cheaper monthly payments) Limited driving range per year (10,000, 12,000, and 15,000 Miles)
Comes with the option to upgrade to newer modelsLimited customization options
No security deposit required
Lower long-term maintenance costs
1,500 tax incentive for leasing a new Tesla
No tax and registration fees

Leasing vs. Owning a Tesla: Which is the Better Option?

The decision to lease or own a Tesla requires careful thought. While weighing between buying and renting, it’s essential to consider all of the associated costs. Go the leasing route if you’re on a budget but would love to sit on this comfy, low-maintenance EV. Besides, this option offers more flexibility in trading in your current model for newer ones. If you prefer owning your EV and want the freedom of customizing your ride or no restrictions on annual mileage, buying a Tesla is the better option.

Leasing a Tesla vs. Buying a Tesla: Pros and Cons of Each FAQs (Frequently Asked Questions) 

Is it better to lease or finance a Model Y?

Renting a Tesla results in lower monthly expenses than buying. You can rent the Model Y for $489 monthly with a $4,500 down payment. However, the lessee is only allowed 10,000 miles annually over the 36-month term of the lease. On the other hand, a loan payment exceeding $700 if you’re buying is less enticing than the monthly payment of around $500.

Why can’t you buy a Tesla at the end of the lease?

Tesla doesn’t allow third-party dealerships or third-party persons to buy leased-out cars. Their policy is that the vehicle should be returned to the leasing company when it expires. Future changes to this policy are possible, but not at this time.

Can you lease a Tesla or only buy one?

If you’d love a Tesla but don’t have the finances to buy one, you can drive any of their models as they’re usually available for 24- to 36-month leases. Only clients who fulfill the company’s criteria are allowed to lease, such as the minimum age of the majority. You can buy a Tesla by acquiring a loan from a Tesla financier or any third-party mortgagee with 36 to 72 months terms.

What are the negatives of owning a Tesla?

Although buying a Tesla can be a pleasant and eco-friendly choice, there are a number of drawbacks you should take into account. They have a high initial cost, limited battery range, and a scarcity of charging stations.

How many years will a Tesla last?

The battery life of a Tesla car is 1,500 battery cycles. This is equal to 300,000 to 500,000 kilometers. If you drive 40 miles each day, that translates to roughly 22 to 37 years.

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