Tesla's big announcement today is that you'll soon be able to lease-to-own cars like the Model S with help from a number of banks. And prices start at $1,199 a month, or $500 thanks to some creative reasoning.

Here are some details:

  • US Bank and Wells Fargo have agreed to provide 10% down financing for purchase of a Model S (on approved credit). — The 10% down payment is covered or more than covered by US Federal and state tax credits ranging from $7,500 to $15,000. New Jersey, Washington and DC also have no sales tax for electric vehicles. These advantages are not available when leasing.
  • When considering the savings from using electricity instead of gasoline, depreciation benefits and other factors, the true net out of pocket cost to own a mid-range Model S drops to less than $500 per month. — After 36 months, you have the right, but not the obligation to sell your Model S to Tesla for the same residual value percentage as the iconic Mercedes S Class, one of the finest premium sedans in the world, made by Daimler (also a Tesla partner and investor).
  • Not only is Tesla guaranteeing that resale value, but Tesla CEO Elon Musk is personally standing behind that guarantee to give customers absolute peace of mind about the value of the asset they are purchasing.

So it's not a new car, it isn't about the big sale, but it is pretty good.

With this move, Tesla will be able to get their cars into more hands with a financing program. The $500 price tag isn't a straight $500 though. The base cost is actually $1,199 for an 85kWH model, but the savings of gas prices, tax credits, depreciation, not replacing brake pads, costs of electricity, etc, actually make it worth $500, which is the net out of pocket. They're assuming a lot, like the price of gas and what exact model of the car you bought.

Tesla has a calculator up on its site to show your "effective savings." If you drive 37,000 miles a year and live in West Virginia, it's basically free! Based on how I drive my personal car, I'd shell out around $900 a month to have a Model S.

This is a 5.5 year loan and, after year three, you have the opportunity to bow out and Tesla will buy the car back from you at the residual value of the S-Class.

Mike Ballaban makes a good point about the depreciation of the S-Class, the benchmark for the Model S:

Doesn't the Mercedes S-class have some pretty horrible depreciation rates? Or am I missing something?

For a 2010 Mercedes S-Class (one that's 36 months old), with 80,000 miles on it, Kelley Blue Book gives a value of $44,266.

That's about a 50% depreciation rate. Is it too early to calculate the actual market rate depreciation on a Tesla Model S?

Still, it's a great opportunity to get behind the wheel of a Tesla Model S instead of being a rich eco-mogul that can plunk down $80k in cash all willy nilly.