Thoughts on Prepaid Service and Extended Warranty

[hill]

I was never offered a service plan or warranty for my X. When were they supposed to offer that to me?

Don't worry - I'd bet dollars to donuts they'll be more than happy to take your money any time.

.

 

[idoco]

Just to clarify terminology. The 4 or 8 year pre-paid service plan is called the "Pre-Paid Service Plan", not "ESA".

The Extended Service Agreement (ESA) is what is normally called the "extended warranty", but isn't due to legal reasons in most states.

Well it should be called ESA and extended warranty!

Thanks for the correction

 

[HankLloydRight]

Well it should be called ESA and extended warranty!

YES! I totally agree.

 

[dtan398]

May be I should not mention the word "insurance" as it has digressed to another subject.

Functionally, "Extended Service Agreement" is an equivalent of "Extended Warranty" but legally, they are different.

Some states demands that Tesla must legally be registered as an Insurance provider in order to be able to sell "Extended Warranty."

To bypass that legal terminology, Tesla calls that as an "Extended Service Agreement."

Whatever it is, it is still a tool if you want to buy or skip it according to your risk assessment.

As whether Tesla is reliable or not, Consumers Report says no.

If it is not, why Consumers Report also said 97% of owners are happy with Tesla?

That's because Tesla has serviced all problems for free during the warranty period and owners don't have to go to court to sue like GM 32-cent ignition switch.

As whether the repairs are affordable after 50,000 miles, here are a summary from Model S:

ncoiled | April 29, 2016

Windshield: $900
Windshield wiper motor: $500+
Headlight,: $1000 - has to be replaced as a next higher assembly even if just the bulb fails.
Side mirror: $390
MCU (17" touchscreen): $4,000
Door handle: $1000-$1200
Rotors, full set of 4: $1400
Sunroof seal: $1800(?)
Leaky cabin(?): $2500
Front end suspension work(?): ~$1000
---

It's ridiculous that a burned light bulb replacement would cost $1,000 or a 12V battery that costs more than $300 but it seems to me, repair costs seem to be expensive.

By the way, it is true Tesla is a profit company so its programs including "Extended Service Agreement" is not a charity.

However, I do think that to have the ability to buy "Extended Service Agreement" is a privilege.

Consider those who do not have the privilege to purchase one:

1) Certified Pre-Owned: If you buy a Tesla directly from Tesla pre-owned selection, you are not allowed to buy Extended Service Agreement.

2) Third-party Pre-Owned: If you buy a used Tesla from non-Tesla source such as private owner or another company/dealership, you are not allowed to buy Extended Service Agreement either. However, if previous owner already bought it, you can have that owner to transfer that to you for a small fee.

So it is up to an individual to take in the data and decide for themselves.

And so far, from this forum, it is clear that there are 2 decisions after considering all the data:

1) No, it is not worth it.

2) Yes, it is worth it.

I am in the "YES, it is worth it" camp. Reason: Mine is a Model X, and according to Elon, it is the "most difficult car to build" due to it being "overengineered". Being introduced into production less than a year, a lot of 'bugs' haven't be 'known' or corrected. That's why Tesla is keeping the production roll out close to the Fremont factory so problems/recalls can be taken care of expeditiously and with lower costs. One main concern is the Falcon Wing Doors, and the Monopost Second Row seats. Durability is a BIG unknown since the car is in production less than a year. I guess one can argue that the car is completely covered bumper-to-bumper during the first 4-yrs/50,000 miles and that any problems should manifest itself during that period. Another reason, a lot of parts are unique to Model X or Tesla only, so they are not "cheap" and you have to get it serviced by Tesla. It's not like a Camry that's been around over 10 years and is one of the 'most' popular sedan around that owners has the option of getting is service besides the Tesla Service Center.
Warranties/insurance are always expensive until you need/use it. For me, being 70+, I like the peace of mind ESA provides, and as the saying goes: "If you don't spend it, someone else will spend it for you" when the good Lord calls you home! As an investor, I have faith in Tesla and will also hold some shares for the long term. Comments/replies entertained.

 

[paintpolisher]

I'll decide before I reach 4 years or 50k miles. You will put more miles then you think on a Tesla. We put 32k miles in 18 months on our S. Id rather figure out if it will be worth it then, rather then now.

 

[WABarb]

Buying an extended warranty is a roll of the dice.
Be assured Tesla would not offer it if they were losing money on it.
They throw everyone's money into a pot, payout repairs and in the end they make a profit. That means people with lemons are subsidized by those with rock solid cars.
You are not getting eight years of coverage for $4000 ($500 a year). You are actually paying $1000 a year for coverage in years 5-8.
Don't forget the most expensive portions of this car (battery and drivetrain) are covered for those 8 years already.
Then there is the matter of the $200 deductible. Let's say you have six issues covered by the extended warranty. That is $5200 you have paid to have those fixed for "free". There is a good chance you didn't save that much money.
Buy $4000 in Tesla stock and let that be your repair fund.
Insurance is for things that would ruin you financially. Healthcare, your home, wrecking your car.
There is no right or wrong answer. If you find $4000 worth of comfort in the extended warranty then get it.

I like your idea to purchase 4K in tesla stock...

 

[ecrsail]

Regarding the Model X prepaid service plan availability, I very recently communicated with Tesla ServiceHelp NA on this subject, and this is what they sent back:

[We] can confirm the Model X Prepaid Service Plans are not yet available. You will be sent an e-mail when they are available for purchase, and from that date all owners who had been delivered before that will have 60 days to purchase it. Deliveries starting after that will then have 60 days from their delivery to purchase.

Interesting that @GottaGetRidOfICE was able to purchase one already for $2100 plus tax (per his previous post).

 

[GottaGetRidOfICE]

@ecrsail, I hope that they honor that sale when push comes to shove.

 

[dtan398]

I think the service plans are, but can't see any pricing for the extended warranty.

I'm thinking if you trade it in, you lose it, but it would be transferable to a new owner if you sold it. Just guessing though.

I think for those that decide to trade it in, Tesla should prorate and refund the unused period.

 

[elguapo]

@dtan They do. They did that for me in my S and sent me a check for several thousand dollars. I think it may actually be mandated in certain states.

 

[fengshui]

I tried to purchase the pre-paid service today, and it's still not available for Model X.

 

[Tam]

I tried to purchase the pre-paid service today, and it's still not available for Model X.

That is odd.

The website does post the prices for pre-paid Service Plans very clearly. So, you should be able to purchase one.

However, you might not be able to buy Extended Service Agreement (extended warranty) because the website deleted the listed price as of February, 2016.

 

[madodel]

That is odd.

The website does post the prices for pre-paid Service Plans very clearly. So, you should be able to purchase one.

However, you might not be able to buy Extended Service Agreement (extended warranty) because the website deleted the listed price as of February, 2016.

The listed Service Plan is only for Model S, though some one on either Tesla's forum or TMC managed to get Tesla to sell him a Model S service plan for his X. "Advance payment of Annual Service Inspections via a Service Plan is the most economical means of maintaining your Model S." Every time I ask about the Service Plan I am told they are still working on it. My Sig X already has over 9,000 miles on it. Hopefully they figure out what service it needs in a couple of months.

 

[travwill]

I'm really surprised the ESA "extended warranty" isn't available for purchase yet - seems like they would have that available from day one; however, I could understand that they are looking at MX costs to price it. I expect it to likely be more than the MS, say $5000 instead of $4000 at least.

The good thing could be that it would be like the MS in the fact that you have until 30 days after your regular warranty runs out to buy it. That allows you to gauge how reliable your MX is for the first 4 years / 50K miles and determine if you want to buy it or not. Maybe not if you just had warranty replacements on many items, or have never had issues. Maybe a sure thing if the MX continues to have costly repairs or you are still worried about fixes post 4 years. Hopefully they will keep maintaining MX parts even for this generation ;-)

Definitely post when the ESA becomes available..

 

[MSullivan]

That is my plan, I just hope they pre-announce any price increase on the extended warranty. I have over 3.5 years left and I know it will go up by then.

 

[earlyretirement]

I think the service plans are, but can't see any pricing for the extended warranty.

I'm thinking if you trade it in, you lose it, but it would be transferable to a new owner if you sold it. Just guessing though.

I bought the 8 year pre-paid annual maintenance for my P85 Model S. I only used 3 of them and trading the car in. At least here in California, we get a pro-rated refund for any annual services that were not used. I'm not sure I'll buy that one again as there isn't too much they need to do. Every time I brought it in they mostly worked on problems that I waited to build up or they took care of service alerts.

I'd DEFINITELY buy an extended warranty if I kept it for over 50,000 miles. Too many things that can go wrong after you reach the maximum of 4 years or 50,000 miles.

 

[vandacca]

I wonder if Tesla uses some insurance company to help guarantee they don't lose money on these service plans. If that's the case, then it may take some time for an actuary to assess the risk and determine the cost.

 

[MSullivan]

I think between the $4000 and a $200 deductible per issue, leaves plenty of padding for Tesla to not loose money on an extended warranty.
I have decided to purchase both.
I want to keep this car 8 years and with my mileage I know it will not cost me another penny between now and then.
I have a real problem spending money on a car late in life. So if the touchscreen craps out after 6 years I don't want to be faced with a tough choice.

 

[HankLloydRight]

I want to keep this car 8 years and with my mileage I know it will not cost me another penny between now and then.

That's exactly my reasoning also. Between the service plan and ESA, my actual total costs are on average limited to about $1000 per year over eight years, plus the deductible for any in years 5-8.

 

[Sony SS-M7]

Still no sign of the extended warranty or prepaid service plans on the Model X, eh?