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Thoughts about Tesla Warranty, CPO, Service, and Other Policies

Discussion in 'Model S' started by MsElectric, Aug 4, 2015.

  1. MsElectric

    MsElectric Active Member

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    We've had a lot of discussion lately about various CPO, warranty, service and other policies and I thought I'd share some thoughts about what I think would be helpful for customers as well as Tesla in the long-term.


    • Be particular about which cars qualify for CPO. If a car is not in perfect condition, auction it off. It seems the vast majority of the CPO cars are in great condition so I don't think this is an endemic issue but news about Cyclone's car and what he's going through is distressing.
    • Certify a car BEFORE it goes up in the CPO database. Take pictures of the actual car so a potential buyer can see photos of the actual car they are about to buy, including photos of each of the wheels. Stock photos of the car are pointless.
    • A certified car should mean the car has been thoroughly checked out including the paintwork and Tesla should stand behind the car, shoddy work by the previous owner included. The whole point about buying a Certified car is knowing that the car has been thoroughly checked out and the manufacturer will stand behind the car being sold. If this means a higher price, so be it.
    • Be transparent about the CPO cars you sell. List the in service date along with the service history for the car. I can't imagine buying a used car without seeing the car's history. Knowing the car's service history is the most basic critical bit of information to look at in buying a used car.
    • There have been reports of Tesla owners being refused to see the service histories of their own vehicles. This is just wrong on so many levels.
    • When you buy a Mercedes CPO car you can request to see the VMI (Vehicle Master Index) that shows all service records. The same goes for just about any other car dealer. Tesla should be at least as transparent as a car dealer about a car's history.
    • Get rid of the absurdly high $200 deductible per issue for extended warranty repairs. No other premium car maker in this segment has such a high deductible. If you go in for 3 malfunctioning door handles that's $4,000 for the extended warranty plus $600 in deductibles.
    • Price the Extended warranty with a zero deductible (as in the case of Mercedes) or a $50 deductible and make the availability of an extended warranty consistent for new and CPO cars.
    • If a customer can buy a 4 year extended warranty for a new car within the first 4 years and the same applies to a private party sale, the same should also apply for CPO cars. Why withhold the Extended Warranty option from those who buy a CPO car when those cars have been presumably thoroughly checked by Tesla?
    • The $600 service fee regardless of whether it is a minor service or major service is absurd. Charge for annual services based on the actual work done like a car dealer would.
    • For minor services our Mercedes dealer charges right around $200. On years when no fluid changes are required a Tesla, an EV, should not cost $600 a year to maintain. This is all the more important considering annual service is a requirement for not voiding the Extended Warranty.
    • Make it absolutely clear that the extended warranty would be voided if the annual service is skipped. I doubt many people who buy the Extended warranty realize this as it just became clear to me only recently.

    I don't think these are unreasonable requests given that they each represent what you can expect from a car dealer.

    For now Tesla has the premium EV market to themselves but these points I've mentioned are going to matter to customers sooner or later when they have more competition. It's better for Tesla to address some of these concerns now, rather than when they have 2X or 3X more cars (and customers).

    I still consider Tesla to be the world's finest car company and the Model S is without a doubt the best car available to buy at any price but I think some policies can be made better for customers, and that will be better for Tesla in the long term.
     
  2. rxlawdude

    rxlawdude Member

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    Agree with most of your points, but I must point out once again a couple of important details:
    1. The Extended Service Agreement is a CONTRACT, not a WARRANTY. Consumer protections that apply to warranties do NOT apply after the 4yr/50,000 miles warranty expires.
    2. To maintain the validity of this Vehicle ESA, You must follow correct operationsprocedures and have Your Vehicle serviced as recommended by Tesla. If requested, proof of requiredservice, including receipts showing date and mileage of the Vehicle at the time of service, must be presented before any repairs under this Vehicle ESA commence. Service within 1,000 miles and/or 30days of Tesla’s recommended intervals shall be considered compliant with the terms of this Vehicle ESA.

    In other words, if you buy your Model S and Extended Service Agreement at the same time, drive 25,000 miles a year, and bring the car in for annual inspection/service each of those two years, you are not compliant because you didn't have it serviced at 12,500 mile intervals. If you then rely on the ESA after the warranty is gone, Tesla has every legal right to consider the ESA void because you didn't maintain during the warranty period. In contrast, during the factory warranty period, Tesla cannot deny you any warranty claims unless they can conclusively prove that lack of servicing at 12,500 miles or one year was the direct and proximate cause of the failed warranty part.

    There's a possible loophole: it only says that servicing is needed "every 12,500 miles or annually." Nowhere is the "whichever comes first" clause that would make this unambiguous.
     
  3. MsElectric

    MsElectric Active Member

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    You bring up a great point about the ESA and the factory warranty. They've said that "service is optional" but it is only recently I realized the implications of that for Extended Warranty service. So if you pay $4,000 for an Extended warranty and take the car in for service only every 2 years could they technically deny Extended Warranty service? I suppose they'll have to prove the failure was caused due to servicing the car only every other year but I don't see how they could do that given that fluid changes are due only every other year but this is one of those areas that I think they can better clarify with a clear policy.

    I keep talking about service records but this is again why they need to alter their policy to disclose the complete service history to an owner upon request. Let's say you are buying a car from a private party with an Extended Warranty. How would you know if the Extended Warranty coverage is intact unless you see the Tesla service records that all required services have been performed?

    Thank you for your post and pointing this out.
     
  4. Zaxxon

    Zaxxon Member

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    The points I've highlighted above are the ones that resonate most with me:

    #1 - Specifically in relation to Cyclone's experience. As you say, a certified car should be... certified. What the prior owner did or did not do is (should be) Tesla's problem, not Cyclone's. They theoretically certified the car. If they are not standing behind the car, then it's just a used car.

    #2 - #4 - Tesla likes to tout that EVs are simpler and much less expensive to maintain than ICE vehicles. Those are just words--the facts (and Tesla's policies) will either prove that they are much less expensive or that they're not. Today, they are not. $600/year may be competitive with other brands in the luxury segment, but it does not jive with the claim that the cars require much less work (given Musk's assertion that the goal is to run the service division at close to zero profit). The same line of thought applies to the extended warranty on CPOs--if they are certified by Tesla, then they should be treated the same as first-owner vehicles in terms of warranty options.

    And the deductible follows--having a higher deductible than competitors tells us that Tesla does not stand behind their marketing claims that their vehicles will be less expensive to maintain in the long run. If they truly believed that to be the case, then they would at minimum match, or hopefully exceed, the extended warranty terms of their competitors. I'm going based off of the descriptions mentioned on TMC of other brands' policies, as I've not owned a BMW/Audi/Lexus/Mercedes myself.

    I have hope that these are just growing pains that Tesla is experiencing, and that as they get their feet under them in the lead up to Model 3 they will wise up and put their money where their marketing mouth is on these points.
     
  5. hpham007

    hpham007 Banned

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    Tesla is a master at controlling this message. Before the S came out, they were expounding on the fact that the drive units were tested to 500,000 miles. Most people took them at their word since it was entirely plausible. The motor is much simpler than ICE engines and you never heard of a Leaf having it's motor replaced. Now it seems like drive units are a consumable item like an air filter that you replace every 30 - 40 thousand miles. Now they're saying a million miles drive unit is their goal when they haven't shown or demonstrated the current ones can last as long as a typical ICE engine.
     
  6. rxlawdude

    rxlawdude Member

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    +1 to this. I've checked out the Mercedes B class fora, and drive unit failure seems to be common. Tesla supplies these to MB. Similarly, Toyota is having problems getting replacement drive units for its RAV4 EV.

    I hope I didn't make a very expensive mistake in buying a 70D.
     
  7. mibaro2

    mibaro2 Member

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    I am sure as Tesla matures that it will change its warranty and ESA policy. We won't see this as early adopters.
    I believe that a year from now Tesla will have a better warranty and extended warranty program in place.
     
  8. rxlawdude

    rxlawdude Member

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    I'm not sure that in its third model year, owners purchasing today are "early adopters."
     
  9. jeffro01

    jeffro01 Active Member

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    I disagree, I'd say early adopter status continues until they've produced at least 250K cars. People forget just how hard it really has been for Tesla to come this far.

    Jeff

    - - - Updated - - -

    I think this depends on how you want to approach it and your perspective. I'd say, just from reading here, you have a better than 50% chance that your going to need a drive unit replacement at some point in the life of your 70D, even if it's just the 3 year lease. It's also possible that Tesla may be getting close to completely working the bugs out as well just from some more recent posts.

    I've grappled with this a lot, it's put me on the fence more times than I care to count. On one hand I want a car that is issue free, I haven't had to take a car in for anything other than the usual service for years. On the other, I recognize that this is all cutting edge, bleeding edge if you will, technology that is going to take some time to work all of the bugs out of it and by purchasing the car I accept the reality that something is going to break at some point. The question for me is whether or not I'm okay with this, and have the patience many members here seem to have, or whether I should wait to look at Tesla seriously again until the Model 3 starts delivering. That's the benchmark for me, the Model 3 will have to be rock solid if it's going to be the EV for the masses that Elon and Tesla are advertising it to be...

    Jeff
     
  10. AmpedRealtor

    AmpedRealtor Active Member

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    I guess I'm going to find out because I'm ignoring the mileage intervals and am having the car serviced annually, per the email that I received from Jerome Guillen. I have more miles on the car than indicated in the intervals, but Jerome said I could bring it in annually and ignore the mileage. We'll see.
     
  11. 3mp_kwh

    3mp_kwh Member

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    Repeating, for emphasis because it's worse than this. When a CPO customer spots a problem in one area of the car, at delivery, that occurs in several others and turns into something bigger, Tesla should own it, quickly.

    You shouldn't punish your customers, for trusting you. That's just bad business.
     
  12. MsElectric

    MsElectric Active Member

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    #12 MsElectric, Aug 6, 2015
    Last edited: Aug 6, 2015
    We have gone the CPO route with Mercedes a couple of times and each time the experience inspired confidence in the process and we received a car that was pretty much in like new condition. We also liked the fact that the dealer and Mercedes was very transparent with us about what it is they are selling us, it's current condition, and it's past history.

    • We were sent a detailed spec sheet about the car (Tesla does this)
    • We were sent a CarFax of the car showing the in service date and any insurance claims for repairs (Tesla does NOT do this but you can buy a CarFax)
    • We were sent a full vehicle history of the car that showed everything done to the car along with any complains by the past owner and what was done to fix them. This is the single most important piece of information about a used car as it shows the service history for the car and it tells you if the past owner diligently cared for and serviced the car or could not really care less (by all accounts Tesla refuses to provide this information and I'm honestly shocked people are buying used cars without this information. I'd refuse delivery if they refuse to disclose the history of the car).
    • We were sent detailed high resolution photos of the car showing the interior, outside , and each wheel. This is common for any CPO car where there are often 20-30 photos of the car available. (This seems to be hit or miss based on how helpful the staff at the location happen to be and the quality and quantity of photos may change. This seems to be done as a favor rather than standard policy. IMHO actual photos of the car should go up alongside the listing).
    • We were also sent the CPO worksheet that showed everything that was done to certify the car. In each case we saw about $3-6K worth of work done to the car to get it ready for delivery.

    These are all part of the CPO buying experience and it puts the customer at ease on what they are buying. IMHO Tesla should adopt each of these policies to just stay in parity with what a car dealer offers as currently their CPO offering is less than what a car dealer offers and that's never a good place to be if you are claiming that your goal is to offer a better experience than a car dealer.

    Apart from that I agree that the notion that EVs are less expensive to service is not reflected by the $600 annual service fee. As I've said before minor services for our Mercedes V8 costs just around $200 on years that call for little more than an oil change. At least you can get around this exorbitant $600 service fee buy prepaying for 4 services and this is really the way to go with Tesla service.

    Also the notion that an EV should have fewer repairs and cost less to maintain is not reflected in the Tesla Extended Warranty (ESA) policy. They charge you $4,000 for the extended warranty (the highest in the industry) and then hit you for $200 for each repair, after requiring $600 each year for servicing even on years with no fluid changes. By comparison:

    • Mercedes warranty deductible is ZERO. You can go get 4 issues with the car fixed for nothing and with Tesla that is another $800!
    • BMW deductible is $50 but this is per VISIT not per each item fixed so if you take your BMW in for 4 issues, the cost is $50 and with Tesla that is $800.
    • Audi deductible is $85.
    • Also worth nothing that Porsche, that loves to charge for anything possible offers a ZERO deductible.
    • Volvo also offers a zero deductible for repairs.
    • Jaguar also offers a zero deductible.
    • And finally Range Rover that perennially makes some of the most unreliable cars still manages to offer their warranty with a zero deductible.

    The current high deductible fee for the Extended Warranty (ESA) does not inspire confidence in the cost of repairs and maintenance after the initial 50K miles. I think it is worthwhile for Tesla to revisit these policies to be more reasonable and competitive with the competition.
     
  13. Cyclone

    Cyclone Active Member

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    Personally, this is how I honestly feel. Now, Tesla's stance was that the detailer messed up my car. However, that doesn't absolve the fact I was told that if the previous owner repainted the car without going through Tesla, they would not cover a repaint to poor work. That last part really bothers me. Even if, in my case, it really was the detailer that caused the problem and there was not a repaint in the fender (and I'm not saying that is or is not the case), this policy is just bad/wrong.
     
  14. spectrablue

    spectrablue Member

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    This topic has finally motivated me enough to get off center and post my first comments.

    The thoughts shared in this thread are spot on. As a future CPO customer I couldn't agree more with some of these concerns.

    • CPO pictures - if Tesla doesn't show pictures of the actual car, then I should assume the vehicle is accurately represented by the stock photos of a brand new vehicle.
    • CPO availability - if the cars are posted for sale, they should be immediately available for delivery. I'm fine with making a deposit to secure the purchase, but I'm not fine with waiting an unknown amount of time to test drive, inspect, and/or even see the vehicle in person. I couldn't imagine waiting weeks to take delivery of a CPO vehicle.
    • CPO service history - I can't imagine how Tesla wouldn't provide a complete factory service history. In the Pre Owned Vehicle Limited Warranty document the owner is held to the following terms: You are responsible for the proper operation of the vehicleand for receiving and maintaining detailed and accurate records of your vehicle’s maintenance, including the 17-digit Vehicle Identification Number (“VIN”), servicing center name and address, mileage, date of service or maintenance and description of service or maintenance items, which should be transferred to each subsequent purchaser.
    • CPO Vehicle Limited Warranty - are we in agreement that there is $0 deductible on repairs for CPOs? The next bullet has me concerned.
    • Extended Service Agreement - $200 deductible per item?! This is the first I've heard of it. I thought BMWs $50 deductible (on CPO warranties) was an outrage, and that is per visit even if repairing multiple items. I couldn't imagine purchasing an "extended warranty" with any kind of deductible.
     
  15. Cyclone

    Cyclone Active Member

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    Spectrablue, check out my thread My CPO (and disappointments) Experience for some background info. Tesla has all but refused to furnish me the service history of my CPO. They site that the history has the prior customer's contact information and for their privacy, they cannot disclose that. When I asked them to print it out, obscure the customer data, make a photocopy, and give me that instead, they said "we will look into that". Over 3 months later, I'm still waiting even though I've asked multiple times for this. And per my thread referenced above, other than for the repaint on the front passenger fender, I have not had to pay for repairs. Tesla picked up the cost for the removal of the scratch on the hood and the repainting of the passenger rear quarter-panel and rear bumper. I also paid to retrofit the power folding mirrors as that was not available when my car was originally built. And yes, the extended warranty is how you are seeing, but alas, you cannot even buy it on a CPO car (at the moment).
     
  16. MsElectric

    MsElectric Active Member

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    #16 MsElectric, Aug 6, 2015
    Last edited: Aug 6, 2015
    The fact that they told you they could not share the car's service history when you are the OWNER just because the service records have the previous owners information is such and complete utter bull-doo-doo. It is such bull-doo-doo that no car dealer will refuse to share the car's service records with the current owner of the car because it would be ridiculous.

    I've enclosed below for reference what Mercedes would share when you inquire about a CPO car in addition to actual photos of the car and the CarFax. In addition to the information enclosed below, they actually gave me a 21 page (Yes, TWENTY ONE PAGE) service history of the car outlining every little complaint and issue with the car and what was done to fix everything, including every service that was performed including service notes. This is what it means to buy a CPO car. That you are buying a well cared for car with complete service records and the history of the car.

    My take on service records is that if there is nothing to hide with the service history of the car, why not disclose it. Conversely if the service records are being withheld I'm going to wonder what it is they are trying to hide.

    For reference, when we bought a CPO Mercedes they gave us the following worksheet describing what was done as a part of the CPO process when we initially inquired about the car (we had not bought it yet). It shows that they spent $4318 to CPO the car and what that entailed.

    The other documents are an example of the car's service history that they will disclose to you. Note that I received a further 21 pages of service history but the point I am trying to make is how transparent the service records of the car should be when buying a CPO car. Also notice how easy it is to redact information and hence why it is such bull-doo-doo to claim the service records can't be shared because it has the previous owners information... :rolleyes:

    If you are buying a CPO Model S, ask for the service records. Personally, I'd reject delivery if they refuse to share the car's service records.
    WorkDone.JPG VMI-1.JPG VMI-2.JPG
     
  17. AC123

    AC123 Banned

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    I considered CPO and bought new for one simple reason - with the extremely little information they offered about the actual car, plus the general reliability occurrences especially with older cars (good service notwithstanding*), it was too much of a leap of faith for me to go CPO, even though I could have saved 20-30k.

    *Good customer service at service centers is great, but it is still an inconvenience.
     
  18. mibaro2

    mibaro2 Member

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    Just an FYI since you are focusing on CPO cars : the last point of the $200 deductible per item is not for CPO cars. CPO cars cannot purchase the extended warranty.
     
  19. MsElectric

    MsElectric Active Member

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    This is something they can fix easily though as they can list the service records of the car along with the actual photos of the car. As it is you barely know when the car went into service or how many past owners the car has had unless you pay for and pull up the CarFax for a CPO car.

    The service records are a big deal though because for CPO cars you have no way to extend the warranty and once the warranty is up, it is your problem and cost so it makes all the sense in insuring you buy a car that was properly cared for and maintained.

    I find it especially odd how Tesla claims to honor their Extended Warranty (ESA) the car must be serviced regularly but given the fact that you are on your own after the CPO warranty runs out, they don't tell you if the car you are buying was regularly serviced so you can make an informed decision.

    My advice to anyone buying a CPO car is to request (and of that fails demand) to see the service records and if they refuse the service records, refuse delivery. It should never come to that as this information should be readily disclosed...
     
  20. Cyclone

    Cyclone Active Member

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    This is why I went with a higher mileage (31k) car. My thought process was that in the first 31k miles, hopefully the prior owner knocked out all the original teething issues. And other than the glaring issues that I outlined in my car's thread, this was the case. I don't have misaligned panels, I don't have poor alignment, I don't some of the original issues. I did have the clunk and milling sound, but the 4 miles I've driving on my replacement drive unit didn't exhibit this problem. As to MsElectric's point, this is also why I wanted to see the cars prior service history so I can be on the lookout for any of the original issues that may not have been addressed yet.
     

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