Extended Warranty - Is it worth the cost of purchasing?

Extended Warranty - Is it worth the cost of purchasing?

My 4-year new car warranty on my S D70 expires on July 31, 2019. My question - is it worth the cost ($2,600 currently on the Tesla website) to buy another 2 years?

The Extended Service Agreement “covers the repair or replacement necessary to correct defects in materials or workmanship of most parts manufactured or supplied by Tesla during the coverage period” (italics mine) (excluding of course the battery and drive unit, which are covered by a separate warranty). It seems to me that most such defects would have materialized during my 4 years driving my S (I have only driven 30,000 miles however).

I have had several door handles fail, the charge port failed to close a couple of times, and last November I was locked out of the car and a tow truck driver (sent by Tesla) had to charge the 12-volt battery to unlock the door. That’s really the extent of the problems I’ve encountered.

I would appreciate any comments from those who faced a similar situation.

Thank you

I am having trouble figuring out how to post a response. I hope this works.

First, my thanks to all who responded so quickly and with such insight. I thought all the comments were very good and to the point. I am very grateful for your input.

I continue to be worried by the phrase “covers the repair or replacement necessary to correct defects in materials or workmanship of most parts . . .” The key word for me is “defects”. A part wearing out after being used for 4-5 years wouldn’t seem to meet the definition of a “defect”. Maybe Tesla wouldn’t be too strict on the difference between “normal wear and tear” and “defects”.

I am not worried very much about the out-of-pocket cost of replacing a door handle or two, if I don’t elect to purchase the ESA. But if I had to replace a major mechanical feature such as the Traffic Assisted Cruise Control (TACC), which I use a lot, that could be a major expense.

I also am aware that the car will not be eligible for the extended warranty for years 7&8 if I don’t purchase the extended warranty for years 5&6.

As to some specific suggestions: The door handles on my S are the “present” kind. I have absolutely no aptitude or ability to replace a frayed wire. The Berkeley Service Center said a door handle fix is $600 (but others on this post have said it is more) and that road side assistance is covered by the “warranty”.

With the $200 per occurrence deductible, and $2,600 for just 2 years, my low mileage and driving style, it comes down to peace of mind, as Big Horn points out.

johncrab | 25. Juli 2019

I bought it for four years and less than a year in, I canceled it and received (eventually) a refund. They play fast and loose with their terms but when I bought it, an "annual service" was required in order to keep this in force. That could be done by prepaid package or taking in the car annually. They have now canceled (quietly) the annual service programme so that left my ESA null and void, prima facie. I would suggest reading every word of the contract they are offering if you wish to proceed but be prepared for this to be cancelled without notice as the service plan was. I believe a door handle replacement is $1200, so it might help you out but since most door handle problems come down to one frayed wire, I figure I'll take care of that on my own. If you are not used to doing that sort of procedure, this might be a good buy for you. There is a deductible, so factor that carefully as you weigh your decision.

Bighorn | 25. Juli 2019

If you managed to get to four years without going through 50k miles, I'd say it may well be worth your expense to get another four years covered. I got mine policy early on (2013) when it was $2500, and I grabbed it before the price jumped to $4000. Personally, I wouldn't spend $4000 now, but that's because coverage wouldn't last me a year since I drive more than 50k miles a year. Don't worry about the verbiage in the contract--they've never been sticklers for the clauses about annual maintenance and are certainly less apt to do so since they're not recommending annual service anymore.

I've had 4 or 5 handles go bad and I've never been charged anything even when I was beyond 100k miles The part that usually breaks costs about 30 cents, so if you're handy, you can follow along with a video and do it yourself. They charge a bit over $200 to rebuild one because of labor costs, which isn't much more than the deductible ($200). The deductible, however, can be applied to several fixes at once. They might choose to install a newer generation handle if an older version fails--these run around $700.

I don't think the road side assistance is extended with the ESA. I just pay a few bucks a year through State Farm to have a RSA rider which is handy since Tesla's doesn't cover accidents or tows for flat tires. Had they offered an extended warranty beyond 100k miles, I probably would have been around break-even if they charged $4k/50,000 miles based on what I've repaired in the first 250k miles.

jordanrichard | 25. Juli 2019

Do keep in mind that you have to have at least $2500 worth of repairs, just to break even. Also keep in mind that the $2500 you are paying is you paying $2500 worth of repairs in advance, plus there is a $200 deductible for each warranty visit.

acegreat1 | 25. Juli 2019


Bighorn | 25. Juli 2019

Just saw that it's only $2600, down from $4k apparently. No brainer--yes.

NKYTA | 25. Juli 2019

It, the ESA, has worked for me for my 2012 S. Even at the higher price that I paid.

It would have seemed silly NOT to do that for one of the first 2000 cars made by a new car company. Especially since it was in “my backyard”.

The ESA wasn’t offered on my wife’s 3, and since we waited for Dual Motor, I figured that had time to work out the kinks.

NKYTA | 25. Juli 2019

s/that/that Tesla/

Yodrak. | 25. Juli 2019

The Extended Service Agreement is not a warranty. Understanding what that means, what the difference is, may help you make a decision.

nukequazar | 25. Juli 2019

I can't find the full contract anywhere. All the warranty and ESA links on the website have overview, FAQ, and bullet points but not full details. Anybody know where to find it?

Also, I feel like the 2-year extension is probably not worth it but the 4-year play may be. More likely that expensive things start going wrong with a car in years 7-8, and close to 100,000 miles than years 5-6, up to 75,000 miles.

Bighorn | 26. Juli 2019

Sorry, I keep recognizing new details, such as the fact this is just a two year add-on rather than four. That’s getting a little pricey. Like I said earlier, I’ve spent about $4k per 50k miles. Given your low mileage, you’ll likely experience fewer wear issues. I think the deciding factor then becomes peace of mind as there’s a decent chance you won’t come out ahead.

TaoJones | 26. Juli 2019

There are multiple options - both a 2 year option and a 4 year option.

In the end, it's a roll of the dice. I passed getting the ESA for the first S, and the touchscreen failed the day I traded in that car. It could have been avoided had Tesla checked the logs the week before like they said they would, but that's another matter.

I now have 1022 miles in which to pull the trigger for the ESA for this S and will probably flip a coin when the time comes. Am not considering the 2-year/25K mile variant as I could wipe that out in a few months of Cannonball Run-esque merriment, but the 50K mile variant may have some utility.

Again, it's a roll of the dice. Now that annual services at significant additional cost are no longer required, the value proposition is more appealing. I imagine it will take another year to get the FSD board swap done that I stupidly paid for in 2017. So I'll have the car at least that long which will chew up a good chunk of the 50K miles anyway. Eh.

Plus do note that the ESA is refundable, to a point. Also transferrable.

Good luck in yer decision.