Believe it or not, you can still buy a new car in the United States for under $14,000. The least expensive option on the market is the $11,990 Nissan Versa, a car that Car and Driver says, “has insultingly flimsy materials” along with a 109-hp 1.6-liter engine that makes for slow acceleration but gives reasonably good fuel efficiency.
Most of us opt to buy more car than what the Versa has to offer, but that ultra-low price is appealing to budget-conscious shoppers. If the Versa is too “flimsy,” buyers can step up to something like the $14,000 Ford Fiesta.
Once the car is purchased, it can be driven for many years with no further finance costs, which is one of the benefits of buying a car outright.
A 24-month finance term on a $14,000 car, at 3.11 percent interest, is about $600. For the same price you could drive one of the most desirable luxury cars on the market: An all-electric Tesla.
Late Friday afternoon Tesla sent an email announcing a 24-month lease promotion, starting at $593 per month, on either the Model S or the Model X. That’s a two-year cost of $14,232.
Of course, comparing the purchase of a Versa or Fiesta to a lease on a new Tesla isn’t a real-world comparison. What it does do is illustrate the fact that Teslas are starting to become affordable enough for everyday shoppers.
In its email, Tesla said,
It’s never been more affordable to experience the exhilarating performance and extraordinary safety of the groundbreaking Tesla Model S sedan and Model X SUV. With the best safety ratings of any car ever built and equipped with driver assistance Autopilot features that steer, change lanes and control speed, Tesla’s zero-emissions vehicles have revolutionized the modern driving experience.
Be aware, though, that the starting lease price of $593 goes up really fast.
You can visit Tesla’s leasing page for a payment calculator, but the $593 monthly payment is based on a Model S 60 valued at $66,000 on a 24-month term with a hefty down payment of $6,000. The base Model X 60D, valued at $75,000, carries a $730 lease price.
This new lease option might be great for someone who ordered a Model 3 but wants to drive a Tesla now, rather than wait two years for the sedan to become available. Otherwise, purchasing a cheaper car outright probably makes a lot more sense, even if owning a Fiesta isn’t quite as sexy as driving a Tesla.
How would you rather spend your $600 per month: purchasing a Ford Fiesta or leasing a Model S?
-tgriffith
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At this point, leasing is about the only way a Tesla makes sense given that we don’t know much about how the battery packs will degrade and what it will cost to refurbish/renew them.
That said, driving a Tesla is seriously different from driving a Fiesta or a Subaru! Do a strictly numbers-based comparison is fairly silly; if everyone did that, there would be no high-end cars on the market! People buy and drive cars for mostly emotional reasons but then, you knew that. :P
went a pick up truck
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Well played, Matt. The other thing to consider is the price of driving electric. Some people will put a higher value on two years (or more) of emissions-free driving than saving money on a gas-powered car. It’s all personal preference of course, and your scenario presents some serious cash savings. Love it.
Interesting idea… here’s what I’d do:
I would opt not to ignore the weighty $6,000 down payment and apply it, along with a $600/month payment, to the purchase of a new Subaru Impreza 2.0i hatchback (roughly $20,000). That would provide all-wheel drive, fuel efficiency, and the versatility of a hatch, not to mention I would own a car with one of the industry’s lowest depreciation rates after 24 months.
I could then sell the Subaru, rendering the total cost of this vehicle to roughly $100-$200 per month (2014 Imprezas have an average listing price of just under $18K, per CarGurus Price Trends: https://www.cargurus.com/Cars/price-trends/Subaru-Impreza-d375).
The result? A ~$3,000 Subaru instead of a $20,000 Tesla rental.