While the appeal of leasing dipped in recent years, owing in part to a lack of inventory, it’s slowly making a comeback in the current high interest rate economy. One of the key benefits of leasing a car instead of buying it is lower monthly payments because there’s no principal to be repaid. Leasing also opens the door to vehicles that might otherwise be unaffordable, including top-selling electric vehicle (EV) Tesla (Nasdaq: TSLA).
Of course, Tesla is no longer the only electric vehicle (EV) in town, and consumers have several other options to choose from. Among them is the Honda Accord Hybrid, the sales of which have been setting records for the automaker. In 2023, Honda’s electrified models including the Accord increased more than threefold to close to 300,000, which was over 25% of its total sales. Lessees often become hooked, returning to the same brand and model in a show of loyalty to the brand.
Tesla is hard to beat, with over 50% of new EVs across America sporting the electric motor logo. Many of those EVs are the Tesla Model 3, the price of which has been rising of late. Consumers have more reasons than ever to rent an EV these days, including the Tesla Model 3 or the Honda Accord Hybrid, but not before knowing the true cost of leasing either one first.
Tesla Model 3
- Model: Tesla Model 3 Base Version
- Monthly Payment: $299-$329
- Down Payment: $2,999 before taxes and fees
- Cost to Fully Charge the Battery: Between $13 and $18
- Vehicle Range: 341 miles on a single charge
Tesla’s Model 3 has earned the title as the company’s most affordable model, and its latest lease deal makes the cut. As of April 2024, consumers could lease one of these sporty base EVs for under $300 per month, down from a previous monthly payment of $329. Tesla investor Sawyer Merritt revealed the details of the deal on Elon Musk’s X platform. While customers once had to wait months or longer for the vehicle, more recently the Model 3 lease has been known to be available on the very same day.
Even if you catch the Tesla Model 3 RWD lease at $329 per month, you’re not too far away from the other deal. This lease includes a 36 month term with a $2,999 down payment and permits 10,000 miles per year. If you combine the down payment and monthly payments and divide by the lease term, you’ll find you’re monthly payment is in the ballpark of $412 prior to taxes.
While it’s a good deal on a Tesla Model 3, lessees should consider the fine print, including out-of-pocket costs such as taxes. The amount of the out-of-pocket costs tend to vary based on details like the state in which you’re buying. But customers have documented having to dole out as much as $5,000 for the combined down payment, taxes and fees.
One of the reasons consumers choose a lease is for the option to buy the vehicle at the end of the term, given the possibility that the EV could have a higher value than the buyout price. However, the Tesla Model 3 lease doesn’t offer lessees a purchase option. Aside from walking away, Tesla offers two options: upgrade to a different EV or extend the lease on the current vehicle.
Also, if you were hoping to receive the $7,500 tax rebate on your Tesla Model 3 lease, think again. That incentive reportedly goes to the company, something to consider before signing on the dotted line. Tesla leasing is available in most but not all U.S. states.
Honda Accord Hybrid
- Model: Honda Accord Hybrid EX-L
- Monthly Payment Amount: $272-$473, depending on the dealer and region
- Down Payment: $1,775-$1,999 before taxes and fees
- Cost to Fuel Up: Approximately $47 per tank
- Vehicle Range: 563-614 miles
More than 50% of the latest six Honda Accord trims are hybrid: Sport Hybrid, EX-L Hybrid, Sport-L Hybrid, and Touring Hybrid. You can lease a Honda Accord Hybrid EV for as little as $272 per month for a 36-month term and 10,000-12,000 miles per year. Other deals involve monthly payments up to $473. Down payments start at roughly $2,000 but rise closer to $4,000 with fees and taxes. The sticker price for this vehicle starts at $32,195 for the base Sport trim.
Unlike the Tesla Model 3, you should be able to negotiate a buyout for the Honda Accord Hybrid at the end of your lease term. Considering the Honda Accord is a hybrid and not a plug-in electric vehicle, it won’t qualify for the $7,500 tax incentive. But you will be able to enjoy good mileage at between 41-48 MPG for the hybrid models. Honda has upped its interior tech game with the hybrid model, including a Google Assistant and Apple CarPlay, but the exterior leaves consumers wanting for something sportier.
Consumer reviews tout the spacious interior and fuel efficiency, but the Apple CarPlay has been known to be temperamental.
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