Does the Tesla Model 3 cost €349/month—should I take the bait?
This page is translated from the original post "La Tesla Model 3 tombe à 349 €/mois, faut-il mordre à l’hameçon ?" in French.
- 10/12/2024 12:22
Tesla has introduced on its Model 3 the High Purchase Option Lease (LOA), previously seen on the Model Y, with very low monthly payments. Interesting?
If I move forward and you step back… It’s been difficult to follow Tesla’s commercial logic for months. After unexpectedly introducing the concept of LOA (Lease with Purchase Option) with Low and High purchase options on the Model Y, the American manufacturer quickly withdrew it. Why? Too successful? Commercial cannibalization? Loss of profit? Stocks too low or too high? Mystery.
However, the same principle is now being applied to the Tesla Model 3 to reduce its rental costs. Remember that the electric sedan currently does not benefit from any ecological bonus in France. The promised reduction of the 2025 bonus will decrease the price difference with the Model Y, making the Model 3 more attractive again, but patience is still required.
Since the ongoing market competition in the electric vehicle sector will continue to evolve in 2025, should I consider Tesla’s High and Low Purchase Option LOA now? In a way, yes, because the product is very good and reliable, although somewhat annoying with its perpetual updates and electronic bugs. And importantly, one must carefully read the terms and conditions of this High Purchase Option LOA.
Significant Fuel Savings?
To benefit from the €349/month rate, spread over 36 months for 30,000 kilometers, an initial deposit of €7,880 must be paid. This is not a small amount, as it often requires taking out a loan. For a €7,880 loan at an annual interest rate of 6.9% over 36 months, the monthly repayment would be approximately €242.95. Add this to the €349 monthly fee, totaling €591.95. Over three years, this amounts to €21,310, which is more than 50% of the purchase price of the Model 3 Rear-Wheel Drive (€39,990).
Ultimately, this ratio is far too high to be worthwhile. Even accounting for fuel savings, this rate remains too high for a car that will have lost half its value—or more—after three years. All signs indicate that in the coming weeks, the Model 3, which is testing the market here, will see its rental drop to around €299/month. At that point, it’s time to reconsider our judgment.
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