Extended Service Agreements No Longer Transferable?

[Drivin]

assumptions I made about Tesla making the car more reliable, supportable, and cheaper to own as the fleet grew have proven unfounded. They are becoming more like just another car company every day. CPO and warrantee policy changes are diminishing the value of my car faster than I expected when I purchased.

This isn't particularly surprising.

Silicon Valley is full of companies that come along and promise disruption, doing it differently, and eventually go back to the same old, same old...of course there are companies that do make it and fundamentally change things but they are the exception relative to the number of companies that try. They do it by fundamentally changing everything, and not be constrained by parts of the old guard. For instance, imagine if Amazon tried to change things by also having Amazon stores that you can drive to.

Tesla certainly did a lot of things differently that had the potential for major changes, BUT, it is still a car that has a lot of other things going on that have nothing to do with being electric (pano roof, electronics, alignment of panels, other fit and finish issues), those "old guard" things are still hard to get right and have well known support costs.

This latest move isn't surprising given the change with the Ranger service (hmmm, looks like this is taking us more to support than we thought).

What is surprising is that according to the article posted earlier, the pre-paid maintenance is ALSO not transferable. That makes absolutely no sense unless they believe that a car will actually cost more for a yearly service if it changes owner...or they shouldn't have sold the pre-paid maintenance in the first case, and this it was just a way to get more cash flow.

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the ESA covers essentially anything else that might fail.

Are you sure about that? It is an ESA, not a warrantee.

The language says it covers defects in materials and workmanship.

If, for instance, the screen starts to develop dead pixels, is that normal aging of a part, or is it an actual defect? Since they aren't warranting the parts, they could argue many things are "normal wear and tear".

 

[HankLloydRight]

Key word: essentially.

 

[JeffS]

Can someone point to the place where this $1300 per door handle figure came from? I'm going to talk to my SC on Tuesday, I can't believe this is still the case for door handle repairs.



The number actually would be: $4000+ 4x$200=$4800.

And that's if the ONLY thing you go in for for repairs in 4yrs/50k miles.

So you can't really compare the non-ESA price for 4 handle repairs to the total cost of the ESA, since the ESA covers essentially anything else that might fail.

I corrected my error...it was the $200/part deductible which I guess is no more. So now, it has been re-corrected..?

And the handles and screen are the two known vulnerabilities that are not covered by the battery/drivetrain warranty.

Under the ESA, if a handle stops working, chances are it is going in to be fixed. Folks won't wait for another one to fail. Wear items are excluded from ESA. So with or without ESA, we are all paying for brakes and shocks and tires and bulbs and such (as I understand it...though I may be wrong). What's left are latches, heating elements, cameras, compressors, power steering, window regulators, stalks, etc. Sure it is a lot of stuff, but really, the only two significant vulnerabilities seem to be screen and door handles. Those are the only two problems I have heard being addressed with any frequency at all.

Everything that makes the car move, is under the 8yr unlimited mile warranty. And really, that's all the REALLY expensive stuff.

 

[Az_Rael]

If that is the case, you are correct by $400. That is barely ahead in my opinion, but that is just me. Everyone has a risk tolerance. What baffles me is that in most circles, only those with less brains than cents buy extended warranties. They are the things you get suckered into with the finance person.

With Tesla though, it seems illogically flipped. Like... Crowd mentality fear in my opinion. But that is just me. Just my opinion.

I am in the minority on lots of levels. I am unconcerned about the depreciation because I plan to keep my car for 150,000 miles like I do all my cars. But really, still, this whole thing seems way overblown to me. Again, just me. And hey...what do I know.

You are entirely correct that buying an extended warranty is usually a losers game. I have bad luck with cars, so I tend to buy them. Make my money back about half the time. (Had a transmission fail out of warranty once on a Honda Accord at 70k miles. An Accord! Glad we had bought the warranty although I remember feeling pretty dumb about it when we bought the car).

It probably doesn't help that my first two cars were VWs. Man, those repair costs really got high. So I am gun-shy about buying cars with questionable reliability without coverage to at least 100k miles. I would put Tesla in that bucket. So I will buy the ESA for my Model 3.

I agree about the depreciation argument. It probably won't affect it as much as if the cars become known as "unreliable luxury cars" due to their actual reliability ratings. If they turn out to be as rock solid as a Corolla, no one will care about extended warranties. If they end up being closer to a Range Rover, well...

 

[HankLloydRight]

What's left are latches, heating elements, cameras, compressors, power steering, window regulators, stalks, etc. Sure it is a lot of stuff, but really, the only two significant vulnerabilities seem to be screen and door handles. .

None of those are cheap to fix or replace. Also, the adjustable shocks are an ESA item that could be very expensive to repair. Heating elements, window regulators, stalks, etc all might be cheap parts, but the labor to get in to replace those items can be phenomenally expensive. I once had a 49cent tiny vacuum hose on a VW that failed, and it took about $4000 in repairs before it was found and replaced. You can't discount the hefty labor charges when it comes to ESA replaceable items.

My g/f bought a used 2009 BMW convertible, with BMWs extended warranty. She's gotten her money back several times on that, since the roof keeps springing leaks and having multiple sensors and switches break, and one of the two turbos failed (along with several other covered repairs).

So yeah, sometimes ESAs/EWs don't make sense, but they do in as just as many cases... you just don't know which when buying one.

If we could take our Teslas to any local shop for repairs and parts, the ESA probably doesn't make sense. But we don't have that option, we're locked into the Tesla SC for all repairs and parts.. so if anything fails, we only have one option. In this case, the ESA makes a lot of sense (to me).

As I posted in another thread (or maybe this one), with the pre-paid service plan $475 per year (I bought the 8-year plan), and the ESA for $1000 per year after the factory warranty runs out, my total annual expense for all repairs and maintenance for 8 years/100k miles is capped at $1,475 per year.

That's less than any other car I've ever owned for total maintenance and repair costs.

edit: And that's excluding wear items like tires and brakes.

 

[JeffS]

Well, if the service on a Tesla is going to be abisimally expensive between the miles 50,000 to 100,000 - then I guess we know why Tesla updated their policy.

And if this is the case, then we are all screwed for resale. Not just the folks without ESA.

I don't think it is the case at all. I hope I am right. So should everyone here.

 

[rxlawdude]

I thought the current ESA (nov 2015) is $4000 plus $200 per visit. No mention of a per part deductible (I think that was an older one). So by that math you are ahead with the ESA and 4 door handles (as separate failures) vs paying out of pocket.

https://www.teslamotors.com/sites/d...ments/na_tesla_warranty_plan_agreement_ot.pdf

Except you're not. You forgot the additional $2,400 in "annual/12.5K mile" services needed to keep the ESA in effect.

 

[Az_Rael]

Except you're not. You forgot the additional $2,400 in "annual/12.5K mile" services needed to keep the ESA in effect.

I have to pay that amount to maintain the car whether or not I buy the ESA. So it's a wash.

I am one of those people who follow the manufacturers recommendation for maintenance to the letter. I can't currently service a Tesla anywhere but Tesla. So... its a cost I will be paying at Tesla rates. I will be scrutinizing these plans as details about Model 3 service costs start being added to the language.

 

[JeffS]

No...you don't. That annual service is the most obnoxiously priced bill of goods I have ever been sold. I willingly purchased it year #1 with ESA still a possibility. I will decide year to year if I will or won't...and how. If there is something important, like a battery coolant flush, I will just take it in for a (you guessed it) a battery coolant flush.

 

[HankLloydRight]

As I posted in another thread (or maybe this one), with the pre-paid service plan $475 per year (I bought the 8-year plan), and the ESA for $1000 per year after the factory warranty runs out, my total annual expense for all repairs and maintenance for 8 years/100k miles is capped at $1,475 per year.

Just correcting my own post. My total cost for repairs and maintenance is $475 for the first 4 years, and then $1475 for the second four years/50k miles. If I average that total cost over eight years, that's $975 per year total capped cost (plus $200 per visit if any repairs are needed in years 4-8).

Still, in my mind, a pretty darn good deal for total maintenance and repair costs for a high-end vehicle like the Model S.

But yes, the non-transferability thing is a huge mark against the "new" ESA. I am not arguing that point at all. I'm hoping Tesla pulls a "New Coke" moment and realizes the collossal error of their ways, but somehow, I doubt they will.

 

[Az_Rael]

No...you don't. That annual service is the most obnoxiously priced bill of goods I have ever been sold. I willingly purchased it year #1 with ESA still a possibility. I will decide year to year if I will or won't...and how. If there is something important, like a battery coolant flush, I will just take it in for a (you guessed it) a battery coolant flush.

I am an odd person that way. I take all my cars to the dealer and service them per the manufacturers recommendations. I know this is outrageously more expensive then finding an independent shop, but I do it anyway. I own a 2006 Tacoma with 112k miles. Guess where it goes for maintenance? Toyota.

So for ME, the costs of the Tesla maintenance are a wash. I will probably buy the pre-paid plan just to save some money. Did that for our Audi, and I love that all the maintenance costs are already paid for on that car up to 50k except tires.

 

[Spidy]

After watching this I don't know who wouldn't want an ESA on the early cars. Actually surprised how much he got covered under warranty, thought Europe had no ESA.

 

[LoL Rick]

Can someone point to the place where this $1300 per door handle figure came from? I'm going to talk to my SC on Tuesday, I can't believe this is still the case for door handle repairs.

Not 1300. digitaltim just paid 869.
OMG: digitaltim’s delivery story… - Page 19

 

[JeffS]

Not 1300. digitaltim just paid 869.
OMG: digitaltim’s delivery story… - Page 19

Well that right there makes the ESA price even harder to swallow, especially with $200 per visit. HVAC...if that remains reliable to 100,000 miles...that is, in my mind, the big unknown. A screen and 2 door handles are less than the cost of the ESA.

 

[qwk]

Not 1300. digitaltim just paid 869.
OMG: digitaltim’s delivery story… - Page 19

This depends on what SC, how they are feeling that day, and so on.

 

[Luclyluciano]

Who cares if you will or will not break even with the ESA. The ESA is about maintaining and increasing resale value of the car and encourages new car purchases as well as a byproduct.

Other manufactures res understand this so the question remains why is it that Tesla does not?!


The Mercedes-Benz Extended Limited Warranty[1]


Your Mercedes-Benz is engineered to bring you years of driving pleasure. With this in mind, if you plan to drive your vehicle beyond its four-year/80,000 km new vehicle warranty, then a Mercedes-Benz Extended Limited Warranty might be right for you.

Extended coverage is available for up to seven years or up to a 160,000 km maximum, whichever comes first.[1] And if you change your mind and decide to sell or trade in your Mercedes-Benz during this period, an Extended Limited Warranty can help retain and increase the resale value of your Mercedes-Benz.
- See more at: Mercedes-Benz Toronto Corporate Stores | Warranty

 

[JeffS]

Back to the idea that ESAs are for people with fewer brains than cents. It's the thing you get suckered into at closing. It's generally considered a rip off. Everywhere else but here.

This thread has a "sky falling" quality to it, over a product that, when you math it out, isn't a very good deal.

With that said, I don't buy cars very often. It is incredibly expensive to get new super-premium cars frequently. If the depreciation involved in buying and trading $100,000 cars every couple of years is already no big deal, then I am concerned that this is mountain/mole-hill kind of stuff right here.

As I said before though...just my own personal thoughts...and really...what do I know?

 

[JeffS]

Oh...and if a car is generally unreliable, warranty doesn't help the value. The value will suck no matter what. Base value will be on demand. And if a car has horrible reliability, demand will be low. Which pushes prices down. Everyone needs to stop pinning resale values on the ESA.

Folks can claim they will buy a car used IFF it has an ESA. But really? If the cars prove reliable between 50k & 100k miles, won't they likely not care?

Teslas need to be reliable as they age. If they are, we all win. If they are not, we all lose. ESA is irrelevant.

That much...is fact. See? I knew something!

 

[Quantum`]

Back to the idea that ESAs are for people with fewer brains than cents. It's the thing you get suckered into at closing. It's generally considered a rip off. Everywhere else but here.

This thread has a "sky falling" quality to it, over a product that, when you math it out, isn't a very good deal.

With that said, I don't buy cars very often. It is incredibly expensive to get new super-premium cars frequently. If the depreciation involved in buying and trading $100,000 cars every couple of years is already no big deal, then I am concerned that this is mountain/mole-hill kind of stuff right here.

lol, my sentiments exactly. I only carry the minimum liability insurance for house, car, and avoid it altogether for commercial. I can handle it. Have for 40 years.

However Elon's goal of a million-mile drivetrain notwithstanding, there have been alot of replaced traction motors... enough to give me pause. But most of these seem to be on the P85 and P85D, so maybe the rest of us are Ok.

 

[HankLloydRight]

there have been alot of replaced traction motors... enough to give me pause. But most of these seem to be on the P85 and P85D, so maybe the rest of us are Ok.

If you do more reading and research on the drive unit replacements, most of the early replacements were happening not due to a failed or failing drive unit, but rather a noisy bearing that can easily be replaced. Once Tesla realized the actual source of the problem, the number of actual "drive unit failures" is much much lower than reported "drive unit replacements".