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Flip Flopping on ESA

Flip Flopping on ESA

I have, until now, resisted the temptation to "save" $1500 on the ESA. My thoughts were that if the car showed itself to be service prone by the end of my 4th year I would sell it. I did not think it through to the next step: selling it will be easier if the car has an ESA. Plus, the ESA might be even more than the $4000 it will cost on Thursday so the value of my car will have increased because of the $2500 investment I made today.

I'm thinking of it just as I did the tech package and the leather seats. Why would anyone buy a used S without these options?

@Brian H. Thanks for your input on all the relevant threads. It certainly helped. Some here do not appreciate your contributions, I really don't understand them at all.

Bighorn | July 2, 2013

Well, IIRC, the Roadster extended warranty is $3K for 1 year, $4K for 2 and $5K for 3 years. The fact that all iterations of the MS cost the same despite the large variability in price makes me think it's a pretty good deal for a P+.

rdalcanto | July 2, 2013

Well, I just decided to take the $2500 I was going to spend on the ESA and buy more stock instead. It should be worth $5K in 4 years.... This way if I sell the car in 4 years, I'm ahead. If I keep the car 8 years but it is reliable, I'm ahead. If the car is a lemon, I break even.... If I buy the ESA, I'm out $2500 no matter what.

markapeterman | July 2, 2013

In Texas and several other states, the unused portion is fully refundable (it will be entirely unused until the end of the standard 4 year warranty), so I can't see a downside to getting it now.

SamO | July 2, 2013

@jtodman

Despite his belief that he knows everything, BrianH is not a Model S owner and has no access to these threads.

As to the ESA, I am on the same page.

AmpedRealtor | July 2, 2013

@ jtodtman, think about it this way. If the Model S proves to be "service prone", chances are buyers will be savvy to that and you'll have a hard time selling it without an ESA. So it's actually a good idea in that case, and even if that doesn't happen, having an ESA adds value to your resale and makes it less of a risk to a buyer.

JohnnyMac | July 2, 2013

@jtodtman

I wrestled with the exact same decision. For the record, I am not a long-term extended warranty guy either, as generally they don't pay off financially. However, in my case I am planning on keeping this car 8 to 9 years, until my kids are out of college. Plenty of motivation there to not flip it. Therein, I really don't want to own this car and be responsible for repairs out of pocket for major things that could go wrong during the latter half of that ownership. I figure if just one or two substantial components fail during that time, then the warranty will pay for itself and then some. If the car is more prone to breakage, then it will truly pay off. Additionally you have the added value that it brings if you do sell the car to a private party during that four to eight year period.

As you know from other threads we have both posted on, I've looked pretty long and hard at the specific language in the agreement, and I think it is one of the best in the industry given the mileage, duration and coverage it provides at what I feel is an extremely fair price of $2,500. Given the technology in the car itself, I just can't imagine owning this car long-term without it. I understand the lack of ICE moving parts but I'm more concerned about displays, door handles, air suspension components, and other high tech parts which could fail and be quite expensive to repair.

And let's face it, there's only one game in town for repairs, and that is Tesla and whatever rate they quote you for parts and labor for a repair. It's not like you can shop it or just run down to your trusty independent ICE mechanic you have known for a long time and have him take good care of you for a repair that would otherwise cost you a lot more at a dealer. That's just not gonna happen. This was one if the major influences that drove my decision to purchase the ESA yesterday.

I figure for a $100,000 +- worth of car, $2,500 is a nominal price to pay for piece of mind long-term. Don't get me wrong, I don't mean to trivialize that amount of money as I personally hate wasting or spending money on useless things that don't return value, but in this case I struggle to envision a scenario in the long run where that $2,500 does not become a smart investment.

Just my two cents. Factor that into your decision criteria and let us all know what you decide. I know you know this, but f you decide to buy, be sure and do it today.

Good luck.

AmpedRealtor | July 2, 2013

+1 JohnnyMac, great post and makes sense!

Just a little detour… I remember my dad went on a tirade once, swearing up a storm. He is an East Indian man of small stature, so hearing profanities come out of his mouth was quite hilarious to witness. In any event, he was upset because all of his motor oil leaked out of his BMW 7 series and onto his beautiful white driveway. Guess where he got his BMW 7 series serviced? Yup… Jiffy Lube!

The last place I'll be taking my Tesla for any kind of service, even tire rotations, would be to a non-Tesla facility. There are sensors in the wheels, so what assurance do I have that a non-Tesla service shop would even know how to properly rotate tires on a Tesla which has a TPMS that the non-Tesla technicians have probably never seen before. I just don't want anyone fiddling with things. Also, imagine this scenario playing out… your "mechanic" says wow, a Tesla! Then all the other mechanics gather around and start looking or disassembling things out of curiosity… no thanks!

Lou in SoCal | July 2, 2013

I view it as part of the cost of the car. I plan (hope) to drive this car for 8 years or more. To be protected for 8 years at $2500 isn't too bad. For all the things that could go wrong (e.g. screen, sunroof, air suspension, motor, etc.) over an 8 year time period, I pulled the trigger and am not looking back.

RCE | July 2, 2013

I went back and forth as well. At the end I decided to go ahead and get based on whether I would be madder at myself if I didn't but then had problems after year 4 vs mad at myself for 'wasting' $2500 if I bought and didn't need. And I didn't buy the service plan, figuring the a la carte use of service, while more expensive per time, better fit my need for flexibility on if/when I get service done.

irishstoutaz | July 2, 2013

We normally do not buy the extended warranties but did for our 2007 E550 and it paid for itself with an unexpected replacement of a cracked gas tank that would have cost us $3k had we not had the extended warranty.

While this particular issue is not going to happen with the MS, you just never know what expensive part might break/malfunction beyond the standard 4 year period. Realistically, $2,500 is basically $52 per month (over a 4 year period) for this additional piece of mind.

So we dediced to go ahead and get it due to the long term unknowns and that some of the major componenets that may have issues would be very expensive to replace.

TeslaOR | July 2, 2013

Tesla raised the ESA price from $2500 to $4000. If the car proves problematic, Tesla could raise it again. So waiting may not pan out.

J.T. | July 2, 2013

Thanks to all for your input.
@SamoSam. The fact that you feel the same as I do about the ESA convinced me I was on the right track. Also, thanks for pointing out that I hadn't taken Brian's status into account when I made the thread private. I understand he might think he knows everything but I'm wondering if you have any proof that he doesn't. :-)

@JohnnyMac very nice analysis. I bought in a little while ago and I feel very good about my decision.
@TeslaOr +1
@AmpedRealtor re your thoughts on resell. That was exactly what I realized this morning.

Brian H | July 2, 2013

Irish;
Good point. It's the unknown unknowns at this point (very early in the life of the MS line) that tip the balance.

jt;
;)
No way do I think I know everything, but I've been on site and read everything (EVERYTHING) for about 6 years, from even pre-Roadster delivery days. Anything I post is simply my best judgement given all available input. I even kept up with everything on Teslamotorsclub.com for a while, but that site's volume has defeated me now, and I just track a few issues and threads there these days. It's getting to be like trying to sip from a firehose, though! As the volume of buyers explodes, it will maybe get to be like trying to sip from a flame-thrower. <:0

Tesla is a triumph, IMO, and so is SpaceX.

SamO | July 2, 2013

SpaceX is going to be the story in the news for the next 10 years.

SpaceX has completed its 6th major milestone toward crew certification, with 100% success to date!

http://1.usa.gov/14oGOxD

ISS & then Mars

Then beyond.

Bighorn | July 2, 2013

First extended warranty ever, just placed on Paypal.

SamO | July 2, 2013

@Bighorn

That has a nice eloquence given where the money for Tesla comes from.

Bighorn | July 2, 2013

@Samosam
Musk for President of the World? Galaxy?

SamO | July 2, 2013

Grand Marshal Plenipotentiary of Mars at a minimum.

JohnnyMac | July 2, 2013

Glad to hear you decided to do it and that you feel good about it jtodtman! I think all of us who have decided on the ESA will feel good about it for years to come.

jbunn | July 2, 2013

Damn, I bought the car in Washington State, but just moved to California. The can't sell me the ESA, even though I'm ready to purchase it.

sq1mike | July 2, 2013

Just bought the ESA based on the thoughtful analysis in the posts on this thread. Thanks for being such a great community!

Bighorn | July 2, 2013

@Brian H
I think Donald would call them known unknowns, no?

Newampster | July 2, 2013

Production of my MS begins next week wit delivery in 3 weeks. I needed to commit to a service plan. I have always been a long term owner, but Tesla technology will probably change significantly in the next 3-5 years. I plan to get the minimum finance plan that allows the 3yr buy back guarantee. I decided that the 4+4 ranger service would be something I could use, or would provide a sweetener for the sale in the future. I spoke to Tesla toda and learned the ESA price change from $2500 to $4000 is effective July 3, so I placed my $7300 service/ESA order today. Service is one of the few unknowns and this covers it. Maybe a waste of money, but certainly provides peace of mind for current and potentially future owners. Worth it.

AmpedRealtor | July 2, 2013

JUST DO IT™

Brian H | July 2, 2013

I dunno. Do you? ;)

Sailor | July 2, 2013

Got the extended service today....had to finalize the purchase, then buy the package before the end of the 3rd.
Will get the 4+4 service after delivery in August. Just seemed like :
1. Cheap insurance and peace of mind
2. Great resale positioning when I want my next Tesla
3. Value for the whole package because I live in the Rochester NY area and the nearest service center is Toronto.

Bighorn | July 2, 2013

@BrianH

Why yes, yes I do.

"There are known knowns; there are things we know that we know.
There are known unknowns; that is to say, there are things that we now know we don't know.
But there are also unknown unknowns – there are things we do not know we don't know.”

—United States Secretary of Defense, Donald Rumsfeld

dr_gko | July 2, 2013

I'm confused. I thought the ESA costs an additional $1900 without ranger service and $2900 with it. Where did this $2500 number come from?

Amos' Tesla | July 2, 2013

On a whim, I called my local service center and asked what it would cost to replace a door handle...roughly $1,600. Today they can't get parts of the assembly and therefore must replace the entire thing. That will likely change down the line but that pretty much sealed the deal for me on the ESA. I think JohnnyMac summed it up well. I pulled the trigger and have no regrets.

SCCRENDO | July 2, 2013

The $2500 is the extended warranty for years 4-8 or miles 50-100,000. Going up to $4000 on July 3. Got me and many others panicked into buying it before July 3 although many of us still have questions if it was even worth the $2500.

Bubba2000 | July 2, 2013

The technology of Model S/X is going to evolve quickly in the next few years. Elon already indicated that 500 mile battery will be offered soon... probably within 3 years. He also indicated there would be Intermediate (in 3 years?) upgrades. I am guessing they could be AWD with increased horse power, smart cruise control, park assist, collision avoidance, lane change assist, improved seats and interior.

Elon also mentioned major redesign in 7 years after the Model S came out. I am thinking that it will be sooner than that. Model S needs refinement. At 4,647 lbs it is way too heavy. Take out the 1,000 lbs battery pack and the rest weighs 3,647 lbs with Al structure. I think Tesla could use stronger alloys of Al that are not that much more expensive, optimize the design and reduce the weight by 1,000 lbs. For a sedan it is too wide and long... especially for European city roads. Even for US garages it is a tight fit. Still, with limited resources, Tesla may make only minor modifications and improvements in terms of the structure.

Regardless, the car is going to evolve. In 4 years, the current model will be dated. I would be tempted to trade in. I am getting a 85P and will probably trade for the Model SigX that reserved. I am going to delay the delivery of the X as long as I can to get the 500 mile battery and some of the features I want. Still, to reduce the risk in case I keep over 4 years, I went ahead and added extended warranty and ESA with ranger. Just ordered it and it cost 2,400+2500. I just do not want to worry about this kind of thing. all it takes is cracked shocks, failed motor bearing and it will cost a lot more.

I ordered my 85P/Pano pearl white/grey loaded on 6-18 and sent straight to factory. Will probably get it in late July to early August. They are not in a hurry to send my HPWC. Offered them cash up front if they could deliver one from inventory close enough. No luck. Factory must be busy.

ddruz | July 3, 2013

I rarely buy extended warranties. In this case, however, I just bought the ESA after due reflection given the pending price increase. In case it is helpful to others here is my reasoning:

1) I sell the car at about 4 years. My assumption is that most used car buyers prefer a car with a warranty. A potential buyer is looking to spend $4000 (or more if price goes up) to obtain a warranty for the next 4 years. They will likely consider $2500 added to the cost of the depreciated car a value. Thus my risk of losing money on the ESA if I sell my car at about 4 years is low.

2) I hold the car between 5 and 8 years. The technology is so new that there is no statistical baseline for what could go wrong making an ESA purchase a serious consideration. Tesla now says that from their risk analysis they need to charge $4000 to be safe. Therefore $2500 is a very good price to pay for reducing my risk of 5 - 8 year ownership based on the most reliable information to date.

Carefree | July 3, 2013

After much deliberation I have decided NOT to buy the ESA. Why? Because I never sold a car privately. I always trade them in for a new one. I don't want to put up with the hassle. We usually keep our cars anywhere from 3-4 years. While we might keep the Tesla longer, there's a good chance that we will trade up to whatever the next version will be.

I am already looking forward to the next generation roadster:-)

hademarco | July 3, 2013

darn you guys....Just cost me $2500 in the eleventh hour. I wasn't going to purchase, now I did. JK ....thanks for this thread. It helped me make my decision.