No, I didn't. I decided that I wasn't worried enough to need it.
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Thinking about pulling the trigger on a warranty extension Now that Tesla offers one
- Thread starter davewill
- Start date
One thing that always stuck me as odd about people buying extended warranties is that basically, people with no knowledge are saying to the experts with data,"I bet you I know better and it will cost more than you think."
That is what you are saying when you buy an extended warranty. I know better than you and bet it will cost more than you say based off your data. In fact, build in some cushion for yourself to make sure you make money, and you can have all of it if I'm wrong. You may have a room full of people who's whole job it is to estimate these costs, but know better.
Just from a logic standpoint, it is always a bad bet. I would imagine it is exceedingly rare that the buyer of the warranty knows more about how much it is likely to cost than the seller. So you basically would rather pay $3K now than have a 1 in 8 shot at paying $5K or something along those lines. Whatever it is, I promise you the math does not work out in the buyers favor.
Around 20 years ago, at the dealership I worked at as an intern, they aimed for a 60% margin on those warranties by the way. As in, if they expected an average cost of $800/vehicle and bought the warranties for that, they would try to sell it for $2K. That value could and probably has changed over time, but the dealership often made more on extended warranties than the sale of the car itself. I remember commenting on them to my manager when I was new. He told me something along the lines of, it is a total sucker's bet used against people's fears and often the people who are worried about getting a good deal on the car would also be scared enough to buy an extended warranty. So, they would sell a car cheap thinking they had a good chance at making real money on the warranty in the F&I office.
Having said that, there are people out there who they have worked out for and that saved money. There are just more people who lost money.
That is what you are saying when you buy an extended warranty. I know better than you and bet it will cost more than you say based off your data. In fact, build in some cushion for yourself to make sure you make money, and you can have all of it if I'm wrong. You may have a room full of people who's whole job it is to estimate these costs, but know better.
Just from a logic standpoint, it is always a bad bet. I would imagine it is exceedingly rare that the buyer of the warranty knows more about how much it is likely to cost than the seller. So you basically would rather pay $3K now than have a 1 in 8 shot at paying $5K or something along those lines. Whatever it is, I promise you the math does not work out in the buyers favor.
Around 20 years ago, at the dealership I worked at as an intern, they aimed for a 60% margin on those warranties by the way. As in, if they expected an average cost of $800/vehicle and bought the warranties for that, they would try to sell it for $2K. That value could and probably has changed over time, but the dealership often made more on extended warranties than the sale of the car itself. I remember commenting on them to my manager when I was new. He told me something along the lines of, it is a total sucker's bet used against people's fears and often the people who are worried about getting a good deal on the car would also be scared enough to buy an extended warranty. So, they would sell a car cheap thinking they had a good chance at making real money on the warranty in the F&I office.
Having said that, there are people out there who they have worked out for and that saved money. There are just more people who lost money.
Since Tesla is a closed vertical system and electric cars have some more sophisticated stuff in it the parts cost alot more money.. Also labor at Tesla last I looked is $200/hour. I paid about $1750 for my warranty and let's say touch screen goes south isn't that $1500 sans labor. Also my plan gives me a prorated refund for the unused time if I cancel. So my warranty started in April let's say I buy a Tesla next April I'll get about $875 back. Don't know if Tesla does that
colepalmer
Member
I think Tesla is totally unique and outside the typical extended warranty analysis. My car with 400 miles on it needed a replacement of the Power
Conversion System and the High Voltage Controller (both under warranty of course). If the car had been out of warranty, I would guess $8000 in repair costs. There are parts in this car that are astronomically expensive. I priced an extended warranty through x-care - $2900 for ten years. My piece of mind is valuable to me. I get $7500 back next winter and using half of it to have this coverage is a good value. These cars are a bear if something goes wrong. If the labor rate is $200/hr, now, what will it be in 8 years, say...same with the parts. Even with springing for the warranty, I still paid under $50,000 for the car and I can tow 3500#. Compare that to the cost of the only other cars that can match that, a Kia EV-6 and a Cadillac Lyric, each of which are $58,000 -$62,000.
The point is the company is vertically integrated and has control over everything regarding repairs. Also, each person's circumstances are different. It is not the typical ICE car analysis. The car is a good value even if one springs for an extended warranty. My piece of mind is worth it.
Conversion System and the High Voltage Controller (both under warranty of course). If the car had been out of warranty, I would guess $8000 in repair costs. There are parts in this car that are astronomically expensive. I priced an extended warranty through x-care - $2900 for ten years. My piece of mind is valuable to me. I get $7500 back next winter and using half of it to have this coverage is a good value. These cars are a bear if something goes wrong. If the labor rate is $200/hr, now, what will it be in 8 years, say...same with the parts. Even with springing for the warranty, I still paid under $50,000 for the car and I can tow 3500#. Compare that to the cost of the only other cars that can match that, a Kia EV-6 and a Cadillac Lyric, each of which are $58,000 -$62,000.
The point is the company is vertically integrated and has control over everything regarding repairs. Also, each person's circumstances are different. It is not the typical ICE car analysis. The car is a good value even if one springs for an extended warranty. My piece of mind is worth it.
Thanks for your reply. You have no idea how many people said...nah, I'll take my chances and bank the money in case I need a repair. Unless and until Tesla and other EVs have certified repair shops other than Tesla they have you by the short hairs
colepalmer
Member
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