If you’ve ever leased a Tesla and wished you could purchase it at the end of your lease term, your wish has finally come true. Starting November 27, 2024, Tesla is offering a lease buyout option for all its models, including the Model 3, Model S, Model Y, Model X, and Cybertruck. This new option allows customers in the United States to purchase their leased vehicles after the lease term ends—something Tesla had previously stopped offering. But what does this mean for Tesla’s future, and why is it happening now? Let’s explore all the details.
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What is the Tesla Lease Buyout Option?
Tesla’s lease buyout option allows those who leased a Tesla vehicle to purchase it outright at the end of the lease term. This offer applies to all Tesla vehicles, including the highly anticipated Cybertruck, previously excluded from this option. To begin the buyout process, customers can use the Tesla app, where they can confirm their intent to purchase, receive a purchase estimate, and then proceed with the transaction.
Tesla Lease Buyout: How Does It Work?
To take advantage of the new lease buyout option, follow these simple steps:
- Step 1: Access the Tesla app and navigate to the “Financing” tab.
- Step 2: Go to “Lease Details” and select “Manage Lease”.
- Step 3: Click “Purchase Vehicle” to confirm your intention to buy.
- Step 4: Tesla will provide a purchase estimate and prepare a purchase packet.
- Step 5: Sign the necessary documents and pay the full purchase amount, plus taxes and fees.
Key Information About the Tesla Lease Buyout:
- Available for: Model S, Model 3, Model X, Model Y, and Cybertruck (excluding Iowa and Louisiana).
- Fee: Up to $350 for the buyout.
- Third-party dealerships: Eligible to purchase leased vehicles.
- Exclusions: No buyouts are available for Canada, Iowa, and Louisiana.
Tesla Lease Buyout Pricing and Fees
| Tesla Model | Lease Payment | Buyout Fee | Other Fees |
| Model 3 / Model Y | $299/month | $350 | Local taxes and fees |
| Model S / Model X | $999/month | $350 | Local taxes and fees |
| Cybertruck | $999/month | $350 | Local taxes and fees |
Note: Leasing is not available in Canada for Model 3 and Model Y customers as of now, and lease buyouts are not available in Iowa and Louisiana. You can get more information from here.
Why Did Tesla Stop Offering Lease Buyouts?
In 2022, Tesla decided to stop offering lease buyouts for all models, citing its plans to transform leased cars into robotaxis. Tesla envisioned its vehicles as “appreciating assets” that could be part of an autonomous fleet, transporting passengers and generating income when not in use.
Elon Musk, Tesla’s CEO, has been vocal about this vision, stating that the company’s cars would become “robotaxi” vehicles that could generate revenue for owners. As part of this plan, the company stopped allowing customers to buy their cars at the end of their leases.
Elon Musk (CEO): “Once we solve autonomy, we will no longer sell cars; we will instead operate a robotaxi network that makes more money than just selling cars.”
However, this ambitious plan has yet to fully materialize, and Full Self-Driving (FSD) technology is still not capable of fully autonomous operation. As a result, Tesla has reversed its stance on lease buyouts, perhaps due to slower-than-expected progress in self-driving technology or a shift in its business priorities.
Why Did Tesla Reintroduce Lease Buyouts?
Tesla previously stopped offering buyouts after 2019, stating that it planned to use returned leased vehicles in its robotaxi fleet. Elon Musk had always been vocal about his belief that Tesla cars would eventually become autonomous robotaxis, creating a new form of public transportation. The idea was that you could send your car to pick up passengers, and in doing so, your car would make money while you weren’t using it.
But, as we know, achieving fully autonomous driving hasn’t come as quickly as anticipated. Tesla has faced challenges in rolling out Full Self-Driving (FSD) capabilities, and the autonomous robotaxi fleet has yet to materialize in the way Musk once predicted. In fact, just a few months ago, Musk stated that once Tesla solves autonomy, the vehicles will not be sold outright because the company will use them to generate income through autonomous ride-hailing services.
However, with the introduction of the lease buyout option, it seems Tesla has reconsidered its approach, at least for now. Some analysts believe this is a sign that Tesla’s autonomous vehicle goals are further off than previously expected.
“Please note, customers who choose leasing over owning will not have the option to purchase their car at the end of the lease, because with full autonomy coming in the future via an over-the-air software update, we plan to use those vehicles in the Tesla ride-hailing network.” – Elon Musk
Is the Tesla Lease Buyout Decision Linked to the Company’s Struggling Sales?
Tesla has had a tough time meeting its sales goals for 2024. The company has been dealing with declining sales in the U.S. compared to last year, while other EV manufacturers continue to see growth. In light of this, the lease buyout option may be a strategy to help Tesla boost sales in the fourth quarter.
Incentives like 0% financing, lower lease prices, and Full-Self Driving transfers have already been used to attract buyers. By reintroducing the lease buyout option, Tesla might be hoping to convert more leasers into long-term customers, which could help meet its sales targets for 2024.
Tesla Lease Buyout: Is It a Good Deal?
The reintroduced Tesla lease buyout option can be a great deal if you’re already enjoying your Tesla and want to keep it long-term. Compared to the traditional used car market, buying your Tesla at the end of your lease can often offer favorable terms, and it’s especially attractive to those who have gotten used to the car’s features.
There are several advantages to leasing a Tesla, especially if you’re considering buying it at the end of the lease term:
- Lower Initial Payments: Leasing a Tesla often requires lower monthly payments compared to purchasing outright.
- Option to Buy: Now, you can purchase your leased car after the term ends, allowing you to enjoy the benefits of leasing with the option of future ownership.
- No Residual Risk: Leasing lets you avoid concerns about the vehicle’s long-term value, as you can simply return it if it no longer meets your needs.
- Flexible Terms: Tesla offers flexible lease terms, with options for customers to purchase their vehicle after the lease ends or return it.
- Incentives & Discounts: Tesla is also offering attractive leasing deals, such as free Supercharging and Full-Self Driving for new customers who sign a lease by the end of the year.
Tesla’s 2024 Vision: Shifting Approach to Autonomy and Robotaxis
As of now, Tesla’s robotaxi plans are still in progress, but the new Cybercab model, unveiled in late 2024, is now intended to be the dedicated vehicle for these services. The Cybercab is designed from the ground up to handle autonomous driving and is expected to be ready for widespread use within the next two years.
This is where things get interesting. If Tesla plans to deploy robotaxis with the Cybercab by 2026, why would the company allow lease buyouts for regular models like the Model S or Model 3? Perhaps Tesla recognizes that it cannot count on Full Self-Driving technology being ready for mainstream use as quickly as initially expected, or it may no longer see these cars as suitable for autonomous services.
Elon Musk (CEO): “We’re shifting focus to the Cybercab, but all Tesla vehicles will eventually be capable of participating in a robotaxi network.”
Read more: 2024 Tesla Referral Program: Get $2,000 Off & Earn Up to $10,000 with Referrals
FAQs:
What is the Tesla lease buyout option?
The Tesla lease buyout option allows customers to purchase their leased Tesla vehicle at the end of the lease term. This applies to all Tesla models including Model S, 3, X, Y, and Cybertruck, excluding some states like Iowa and Louisiana.
Is the lease buyout option available in Canada?
No, the lease buyout option is not available for Tesla customers in Canada at this time. Customers in the U.S. can use the option starting November 27, 2024.
How much does the Tesla lease buyout cost?
There is a fee of up to $350 for the lease buyout, plus applicable taxes and fees.
Why did Tesla stop offering lease buyouts?
Tesla initially stopped offering lease buyouts to keep its vehicles for use in its robotaxi fleet, a plan that involved full autonomy and self-driving technology. However, the company has since revisited this decision due to delays in autonomous driving technology.
Can third-party dealerships buy Tesla lease vehicles?
Yes, third-party dealerships are eligible to purchase leased Tesla vehicles, giving customers more flexibility in how they handle their lease return.
Which Tesla models are eligible for the lease buyout?
The lease buyout option is available for the Model S, Model 3, Model X, Model Y, and Cybertruck (excluding Iowa and Louisiana).
