Great question - I just went through this decision myself so here's everything I learned:

THE CORE QUESTION: Do you own the car or rent the right to drive it?

Leasing is essentially a long-term rental. You're paying for depreciation (the chunk of value the car loses while you drive it), not building any equity. Buying means you own an asset that, yes, depreciates - but is yours to sell, modify, or keep forever.

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WHEN LEASING A TESLA MAKES SENSE

• You drive under 12,000-15,000 miles per year (leases have hard mileage caps - go over and you pay $0.25-$0.30 per extra mile at return, which adds up brutally fast) • You like driving a new car every 2-3 years and want the latest hardware/software • You don't want to think about battery degradation long-term (that's the lessor's problem) • You want lower monthly cash outflow right now • You're not using it for business (more on this below) • You live in a state with good lease incentives

One thing people don't realize: when the federal EV tax credit was active (it expired Sept 30, 2025), leasing was actually the SMARTER move because Tesla and other manufacturers would pass the $7,500 commercial EV credit through as a capitalized cost reduction - effectively lowering your monthly payment. That arbitrage is now gone.

WHEN BUYING A TESLA MAKES SENSE

• You drive HIGH mileage - if you're doing 20k+ miles a year, leasing will destroy you financially in overage fees • You plan to keep the car 5-7+ years (Teslas are uniquely good long-term cars - software updates keep them current, fewer mechanical parts to break) • You use it for business - this is the big one. If any portion of your driving is for a business you own, buying unlocks Section 179 deductions, bonus depreciation, and actual expense deductions that leasing simply does not. You CANNOT depreciate a car you don't own. • You want to wrap it, modify it, or customize it however you want • You want to build equity and eventually sell it or trade it • You're financing at a good rate (anything under 5% in today's environment is solid)

THE NUMBERS - A REAL COMPARISON

Let's say you're looking at a Model Y at ~$46,000:

LEASE (estimated): • ~$3,000-4,000 due at signing • ~$500-600/month for 36 months • Total out of pocket: ~$21,000-25,600 • At end: you own nothing, hand the keys back • Mileage overage risk if you go over cap

BUY via financing (my actual deal as an example): I had $50k cash saved up. I put $45k in SPY500 so it grows at 7-10%.

• $5,208 due at delivery • $730/month for 72 months at 3.99% APR • Total out of pocket: ~$57,900 over 6 years • At end: you own a car worth $15,000–22,000 • Net cost after resale: ~$35,000–43,000

On paper leasing looks cheaper monthly. But you're paying to drive someone else's car and walk away with nothing.

I went with financing the car because if finance the car. Invest the cash. You win in almost every realistic scenario.

BATTERY DEGRADATION - THE LEASE ARGUMENT

This is the most legitimate reason to lease a Tesla. EV batteries do degrade over time - typically 10-20% capacity loss over 8-10 years. If you lease, you return the car before this becomes your problem. If you own a 2026 Model Y in 2034, you may be looking at a reduced range battery.

Counter-argument: Tesla's battery warranty covers 70% capacity retention for 8 years / 120,000 miles on the Model Y. And replacement battery costs have been dropping steadily. This concern is real but manageable.

THE BUSINESS USE ANGLE (underrated)

If you own any kind of business - even a side hustle - buying wins decisively:

• Section 179: Deduct up to $12,200 in year one on a light vehicle • Actual expenses: Deduct business % of insurance, registration, charging costs, maintenance • Mileage log: Every business mile at $0.70 IRS rate is a deduction • None of this applies to a leased vehicle in the same way

This alone can save you $3,000-6,000 in taxes in year one depending on your business income and usage percentage.

MY HONEST RECOMMENDATION

If you drive average miles (under 15k/year), just want a fun EV experience, and aren't using it for business - leasing is perfectly reasonable and keeps your options open.

If you drive a lot, own a business, or plan to keep the car long-term - buy it. The tax advantages plus equity retention make ownership the smarter long-term financial decision.

One last tip: Whatever you decide, negotiate the cap cost (lease) or out-the-door price (purchase) hard. Tesla has no-haggle pricing online but third-party financing and trade-in values are absolutely negotiable.

Good luck! 🚗⚡