Model S Service Contracts - the poll edition(tm)!

[RDoc]

It would be interesting to know how this is currently being handled.

Suppose a new customer signs up for a Model S reservation having read the specs, and used the design studio to come up with a price. Since it's not available in the design studio, the price doesn't include the service contract price.

When do they find out about it? Do they get told about it when they make the reservation, when they have to commit, or only after the car is delivered? I haven't read anything from existing customers about when Tesla officially delivers the news.

And there's still the question of what happens after 4 yrs/50k miles. The batteries are stated to have an 8 year warranty, but there's no mention anywhere AFAIK of how much that warranty will cost. When are customers going to find out about that?

 

[ElSupreme]

Would it have been nice if the pricing of maintenance matched the marketing guff about the low maintenance requirements for EVs, YES.

That said, I don't feel that $475 per year/12k is a deal killer for a "premium" sedan. My hope is that by the time Gen III comes out, the service centers are paid for, and Tesla has more data, the maintenance price will fall to a much more reasonable $200/year. For now, Tesla has to pay for those service centers somehow.

Yes this is my main grip. EVs are so much less complicated and easier to maintain. In my mind that means less cost to maintain.

And your second paragraph is also the conclusion I came to after a few days of this announcement.

 

[joefee]

I was looking for 3-4 yrs. free for Sig’s.

 

[4sevens.com]

supreme - can't get the deposit back. MVPA signed already.
The point is 1) they didn't even have a hint of a required service add-on until now and 2) while I agree cars need maintenance - it shouldn't be forced down a buyers throat meanwhile holding your warranty hostage. Other options should be made available - for example service al la carte outside of a annual service plan.

To me this whole thing smells like this.... you go to a fast food joint... order your burger... as you hand over the cash they stop you and say... well you have to buy it as a combo... you have to buy a drink and fries or you don't get the burger...

Mycroft - I think their service centers may be approved contractors... keeps them flexible but it'll cost the consumers more because of more overhead....

- - - Updated - - -

So you think a dedicated page, and a front page spot (shared with some other blog posts), is not sufficient for people to find this info? I personally don't think warranty information warrants a huge disclaimer on a main page. If I care I can easily find the page from the front page navigation.



YOU MUST SERVICE YOUR CAR FOR THE WARRANTY TO REMAIN VALID! THIS IS TRUE FOR EVERY CAR SOLD TODAY!

NOT true.... warranty is void IF AND ONLY IF something breaks because of LACK of service.... and the dealership has to prove that.... just because you didn't service the car and something breaks because of a defect or poor design is NOT enough to void a warranty...

Read this page again... Model S Options and Pricing | Tesla Motors
8 year warranty on the battery (NOT prequalified with.... ONLY IF YOU BUY THE OPTIONAL SERVICE PLAN)

Also read here Model S Facts | Tesla Motors
Model S comes with a 4 year or 50,000 mile, whichever comes first, new vehicle limited warranty. An additional warranty covers the battery and varies by kilowatt hour capacity.

BOTH pages say NOTHING of requiring the customer to pay for the OPTIONAL SERVICE PLAN otherwise either warranty will expire.... that is only mentioned in GB's blog.

I can't see anyone justifying this...

 

[ElSupreme]

supreme - can't get the deposit back. MVPA signed already.
The point is 1) they didn't even have a hint of a required service add-on until now and 2) while I agree cars need maintenance - it shouldn't be forced down a buyers throat meanwhile holding your warranty hostage. Other options should be made available - for example service al la carte outside of a annual service plan.

To me this whole thing smells like this.... you go to a fast food joint... order your burger... as you hand over the cash they stop you and say... well you have to buy it as a combo... you have to buy a drink and fries or you don't get the burger...

Mycroft - I think their service centers may be approved contractors... keeps them flexible but it'll cost the consumers more because of more overhead....

Right and in BOTH of my posts I pointed out that there is a real gripe for you. You are NOT forced to maintain your car, you risk voiding your warranty. You can pay al la carte. It is $600 when your service interval comes up. If you don't get ANY OTHER CAR maintained close to a service interval you risk voiding your warranty! Maintenance is a SET LIST of things. The cost isn't dependent on the status of your car. Repairs are variable cost and again those are al la carte.


The real fast food metaphor is this: You go to the drive through and order a burger (which lists its ingredients, but there are no condiments listed) when you pick up your burger you thought there would be mustard on it, but there isn't. You ask for mustard and they say it is 25 cents.

 

[4sevens.com]

I was looking for 3-4 yrs. free for Sig’s.

This would be NICE. and perhaps for 85kWh customers.... These are the customers who paid the most, were at risk the most - putting their necks out for a new and young company who is making the rules as they go...

- - - Updated - - -

Right and in BOTH of my posts I pointed out that there is a real gripe for you. You are NOT forced to maintain your car, you risk voiding your warranty. You can pay al la carte. It is $600 when your service interval comes up. If you don't get ANY OTHER CAR maintained close to a service interval you risk voiding your warranty! Maintenance is a SET LIST of things. The cost isn't dependent on the status of your car. Repairs are variable cost and again those are al la carte.


The real fast food metaphor is this: You go to the drive through and order a burger (which lists its ingredients, but there are no condiments listed) when you pick up your burger you thought there would be mustard on it, but there isn't. You ask for mustard and they say it is 25 cents.

I'm not arguing that maintenance is needed. I'm arguing that they are forcing to purchase a plan announced after the fact.... more than 10,000 people signed up.

No the real fast food restaurant is this.... you didn't ask for mustard and they say they only make it with mustard and you're going to pay 25 cents for it... you can wipe it off if you like but the burger COMES with mustard... and they tell you this AFTER you fork over the cash.

 

[RDoc]

supreme - can't get the deposit back. MVPA signed already.

It sounds like you've already got you car. When did Tesla officially tell you that you need to buy the service contract? I don't mean the blog reply, an official statement with an opportunity/requirement to pay.

 

[Mycroft]

Mycroft - I think their service centers may be approved contractors... keeps them flexible but it'll cost the consumers more because of more overhead....

To date, afaik, Tesla has built their own service centers. I doubt they're going to farm this out to contractors.

 

[bonnie]

To date, afaik, Tesla has built their own service centers. I doubt they're going to farm this out to contractors.

I've never heard of Tesla using contractors for service, either. I'd be surprised to learn differently.

4sevens, did you have some actual information or was that just a supposition?

 

[colinb]

Doing the math compared to my 2008 Honda Civic the difference isn't all that horrendous. At 130,000km I had paid $3,361.32 in service costs excluding tires, all from a dealership (yes I know not the most economical place to get serviced). That works out to about $0.025/km. Based on a cost of $2,400 to get me to about 80,000km I would pay $0.03/km. With Honda I expect that their service network is both well built out and parts are readily available. With Tesla I know they are building it out and that as an early adopter I will contribute some capital to that process. By the time the Model E comes around if they can drive down the costs through this capital investment then I think everyone wins (I get a cheaper Model E to replace the other car, have some fun in the Model S, and life goes on). I never once thought that having this car, at this point in the industry's lifecycle, would be some how cheaper than my ICE which has years of established infrastructure.

- - - Updated - - -

Doing the math compared to my 2008 Honda Civic the difference isn't all that horrendous. At 130,000km I had paid $3,361.32 in service costs excluding tires, all from a dealership (yes I know not the most economical place to get serviced). That works out to about $0.025/km. Based on a cost of $2,400 to get me to about 80,000km I would pay $0.03/km.

Actually, on second look it gets cheaper if I choose the $1,900 plan - $0.024/km.

 

[Robert.Boston]

@colinb: Interesting calculation, but I'll wager that if you looked at the distribution of those costs for the Honda over those 130,000km, you'd find that the cost during the first 80,000km was fairly low (<$0.02/km) while the cost for the last 50,000km was much higher. That's certainly been my experience with cars.

 

[Beavis]

Didn't we settle this argument? GB's post is not legally binding. The written warranty is. The written warranty does not reference the service plan. That being said, the warranty does not cover damage done by unqualified techs. If you don't have your car serviced by a qualified person, you are at risk. None of this is unreasonable or is a surprise or is different than any other manufacturer.

If you don't like the price, just say so. If you want to propose a reasonable alternative to taking your car to Tesla for service, I will gladly listen.

 

[RDoc]

Didn't we settle this argument? GB's post is not legally binding. The written warranty is. The written warranty does not reference the service plan. That being said, the warranty does not cover damage done by unqualified techs. If you don't have your car serviced by a qualified person, you are at risk. None of this is unreasonable or is a surprise or is different than any other manufacturer.

If you don't like the price, just say so. If you want to propose a reasonable alternative to taking your car to Tesla for service, I will gladly listen.

Perhaps you think it's not legally binding, but that's not what Tesla says. Anyway, if they void your warranty and refuse to fix something, you'll have the pleasure of suing them.

This is different from other manufacturers as has been discussed many times. Consider this scenario:

You buy a Lexus and do no service at all. At 15k miles the transaxle fails because of a badly designed, or faultily manufactured gear set. Lexus has to cover it since the warranty is in effect and lack of service didn't cause the failure.

You buy a Tesla and the same thing happens. Tesla voids the warranty at 12.5 k miles, so even though it's a design or manufacturing flaw, you pay for it.

I doubt very much that the Rangers take the transmission apart and do non-destructive testing on the components at the annual check, so they wouldn't have caught it. There are lots of similar issues such as the 17" display. Testing electronics after assembly to catch future failures is extremely difficult or impossible. NASA can't do it, so I doubt Tesla will.

 

[mknox]

Consider this scenario:

You buy a Lexus and do no service at all. At 15k miles the transaxle fails because of a badly designed, or faultily manufactured gear set. Lexus has to cover it since the warranty is in effect and lack of service didn't cause the failure.

You buy a Tesla and the same thing happens. Tesla voids the warranty at 12.5 k miles, so even though it's a design or manufacturing flaw, you pay for it.

This is the point exactly! All this talk of comparing maintenance costs with other cars misses the mark completely.

 

[strider]

Perhaps you think it's not legally binding, but that's not what Tesla says. Anyway, if they void your warranty and refuse to fix something, you'll have the pleasure of suing them.

This is different from other manufacturers as has been discussed many times. Consider this scenario:

You buy a Lexus and do no service at all. At 15k miles the transaxle fails because of a badly designed, or faultily manufactured gear set. Lexus has to cover it since the warranty is in effect and lack of service didn't cause the failure.

You buy a Tesla and the same thing happens. Tesla voids the warranty at 12.5 k miles, so even though it's a design or manufacturing flaw, you pay for it.

I'm sure that in the Lexus warranty it says that scheduled maintenance must be completed in order to maintain the warranty. If there is a maintenance schedule item to "Inspect and repair" the transaxle at an interval before the failure and you fail to do that inspection then Lexus can absolutely void the warranty on that item and not do the repair. Unless they get a waiver from the FTC, Tesla will have to publish a standard maintenance schedule that comes w/ every other car. That tells you what must be inspected at what intervals. If this work is done the warranty is valid no matter what GeorgeB says.

 

[Beavis]

Exactly. Read the warranty. GB's forum post is not in it. That is a fact and not an interpretation. You guys are seeing something that's not there.

 

[RDoc]

I'm sure that in the Lexus warranty it says that scheduled maintenance must be completed in order to maintain the warranty.

That is not correct. What it says is they won't cover anything caused by not following the scheduled maintenance.

If you don't maintain the recommended service, then they can void the warranty only for damage caused by not doing the service. In the case of a design or manufacturing defect, particularly on something like a transaxle where the only service normally would be checking the oil level, that would be covered by the warranty. For something like the display failing, there isn't any maintenance, actually there isn't any possible, so it would be covered.

 

[strider]

That is not correct. What it says is they won't cover anything caused by not following the scheduled maintenance.

If you don't maintain the recommended service, then they can void the warranty only for damage caused by not doing the service. In the case of a design or manufacturing defect, particularly on something like a transaxle where the only service normally would be checking the oil level, that would be covered by the warranty. For something like the display failing, there isn't any maintenance, actually there isn't any possible, so it would be covered.

Again, GeorgeB's post on TMC is not a legally binding communication. Read the warranty. It reads exactly like what you said above and like every other vehicle warranty. If the maintenance schedule says to check the oil level, you do that, and it still grenades, Tesla must fix it since you complied w/ the scheduled maintenance.

Although Tesla does not require you to perform all maintenance, service
or repairs at a Tesla Service Center or Tesla authorized repair facility,
this New Vehicle Limited Warranty may be voided or coverage may be
excluded due to lack of or improper maintenance, service or repairs.

 

[markwj]

Regarding 'including N years service in the base price of the car', it has recently been pointed out to me what this actually means.

Firstly, let's not delude ourselves that this is 'free' service from anyone. If a manufacturer includes N years of service free with the car, what they mean to say is that the base price has already been internally increased X$ to pre-pay for this service. If anyone thinks they can buy a new iPhone for US$99, they're missing the point (a 2 year contract commitment point).

What was pointed out to me was that this has tax implications (in some countries / states). Taxes on the amount you pay for the car may be different than taxes you pay on service contracts later.

For example, in Hong Kong, new vehicles are normally taxed at up to 100% on first registration - that includes the vehicle, accessories, and everything provided with it. Raising the base price of such a taxed vehicle in Hong Kong by US$2,000 would mean US$4,000 to the purchaser. If the service contract is billed separately, it is tax free.

There is another thread here talking about a similar situation in Australia, where accessories are taxed differently than the car itself.

 

[brianman]

@markwj - That's a good point. I'm curious what the tax rate for the service plan is. In WA state, the sales tax on the (E)vehicle itself is zero.