The Short Answer

Tesla leasing works like most car leases: you pay for the vehicle's depreciation plus interest (called "money factor") over a fixed term. At the end, you return the car. The big difference? You cannot buy the car at lease end.

The Lease Process in 4 Steps

1
Choose Your Tesla
Select model, trim, color, and options online or at a Tesla store.
2
Select Lease Terms
Choose term (24-48 months) and annual mileage (10k-15k miles).
3
Credit Application
Tesla runs a hard credit check. Approval typically takes minutes.
4
Take Delivery
Pay due at signing, inspect the car, and drive away.

Key Terms Explained

Money Factor
Tesla's version of an interest rate. Multiply by 2,400 to get APR. Current Tier 1 rates range from 0.00205 to 0.00220.
Residual Value
The car's predicted value at lease end (48-58% of MSRP). Higher residual = lower payment.
Capitalized Cost
The price you're financing, usually MSRP minus any down payment or incentives.
Acquisition Fee
$695 fee to originate the lease. Often rolled into monthly payment.
Disposition Fee
$395 fee at lease end. Waived if you lease another Tesla.
Due at Signing
First month's payment + acquisition fee + taxes + fees. Typically $4,000-$7,500.

The Math Behind Your Payment

Monthly Payment = Depreciation + Finance Fee
Depreciation = (Net Cap Cost - Residual) รท Term
Finance Fee = (Net Cap Cost + Residual) ร— Money Factor

Example: 2026 Model 3 RWD

Component Calculation Amount
Depreciation ($40,240 - $23,339) รท 36 $469
Finance Fee ($40,240 + $23,339) ร— 0.00210 $134
Base Payment $469 + $134 $603
Tax (est. 7.5%) $603 ร— 0.075 $45
True Monthly $648*
*This example doesn't include acquisition fee. True all-in is ~$564 with fee rolled in.

Lease vs. Buy: What's Different?

Factor Lease Buy/Finance
Monthly payment Lower Higher
Down payment $4,000-$7,500 0-20% optional
Mileage limit 10k-15k/year Unlimited
At the end Return the car You own it
Modifications Not allowed Your choice

What Makes Tesla Leases Different?

๐Ÿšซ No Purchase Option

Unlike every other major automaker, Tesla leases have no purchase option at the end. You must return the car โ€” even if it's worth more than the residual. Learn more โ†’

๐Ÿ“Š Money Factors Instead of APR

Tesla uses money factors instead of APR. Multiply by 2,400 to compare with loan rates. Current money factors range from 0.00195 to 0.00220 for Tier 1 credit.

โšก Federal Tax Credit

On leases, Tesla captures the $7,500 federal tax credit and uses it to lower your payment. You don't file for it on your taxes.

What Happens at Lease End?

Frequently Asked Questions

How long are Tesla leases?

Tesla offers 24, 36, and 48-month leases. 36 months is most common.

Can I end my Tesla lease early?

Yes, but it's expensive. Early termination requires paying all remaining payments plus fees. A lease transfer is cheaper. See options โ†’

Can I transfer my Tesla lease?

Yes, Tesla allows one transfer per lease for a $595 fee. The new lessee must pass a credit check. Takeover guide โ†’

What credit score do I need?

650+ minimum, 720+ for best rates (Tier 1). Credit guide โ†’

Is insurance included?

No. You must provide your own insurance meeting Tesla's requirements.

Sources: Tesla lease agreements, Tesla Financial Services, community-reported deals. Current as of April 2026.