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Extended service agreement price hike?

Extended service agreement price hike?

I could have sworn the price I saw last week was $2500 and when I just checked it, it was $4000? I just filled out my delivery survey. Could that have jacked the price or did I just have poor timing?

Update: This thread came to Elon's attention and Tesla Motors came through and gave us all a grace period to buy the ESA at the $2500 price.

AJC | July 3, 2013

I was alerted to the price raise by this forum a little while ago.
Sure enough, the web page listed $4,000 with no provision for adding an explanatory note. Since it was 2250 California time, I bit the bullet and authorized withdrawal of $4,000, but immediately called customer service, explained the situation and asked him to verify that my purchase was made before midnight July 3, Fremont time. He gave me his name and assured me that I would hear from Tesla on Friday.
We'll see...
AJC

isom | July 5, 2013

Same thing happened to me. Emailed ownership on the night of July 3rd and today they called. They honored the $2500 original price as long as I purchased the ESA today. I did. Great customer service.

Nbadhey | July 12, 2013

Horrible move on Tesla's part. I was scheduled to get my delivery in two days and signing up for the service agreements but to do this without an advanced notice makes me wonder what else this company may pull in the near future, especially since this is completely against their policy of "superior customer service"

Arun | January 3, 2014

If one buys the 4+4 year service plan for $3,800.00 does one have to buy the extended service agreement as well to ensure that the warranty is there for parts after the first $50,000 or 4 years time frame.
If so then what is the difference ???

J.T. | January 3, 2014

Yes, to your answer.

The ESA does justs that; it extends the bumper to bumper protection for the car.

The 4+4 Service Plan prepays for a yearly, or every 12000 miles service. You pay $475.00 per visit as opposed to $600.00 per visit, and probably going higher, if you don't take the plan.

Know this, Elon has stated that you do not need to have your car serviced to keep the warranty in force.

bp | January 3, 2014

The service plan covers normal maintenance items.

The extended service agreement covers part failure.

To be fully covered for 8 years, you will need both. Though you have the option to purchase only one or neither.

These plans are transferrable to a new owner - and there may not be an option to purchase them after the first 30 days of ownership.

Car t man | January 3, 2014

Things like this are a reason why some people don't want to be early adopters. Too often can early customers be pulled into something that can end up having a very different cost structure than anticipated.

Moves like this should be avoided. Tesla isn't taking absolutely best care of roadster owners, despite them "making" Tesla and stuff like this, not the best thing to follow up with...

It is easy to turn fans into enemies, especially when expectations are high. Expectations towards Tesla are some of the highest I think.

J.T. | January 3, 2014

@car t man Things like this are a reason why some people don't want to be early adopters.

Things like what?

Amps2go | January 4, 2014

Don't ever buy an extended warranty on anything. It is always a suckers bet. When a company offers an extended warranty they carefully estimate the average expected cost of repairs for the warranty period and then substantially jack up the price so they can make a profit. There will always be anecdotal experiences where people come out ahead with an extended warranty but averaged out over time you will always shell out more than you get back in services. Consumer Reports advises against service contracts and extended warranties for this very reason.

Bighorn | January 4, 2014

@Amps2go
I think you may be overgeneralizing--for Best Buy, it may be a good rule of thumb, but for 4 extra years coverage of a $120K vehicle, either price is quite reasonable. Ask Pungoteague Dave whether he's glad his car was under warranty and whether he'd plan to to extend it, if he keeps it beyond 4 years.

Amps2go | January 4, 2014

Most folks who buy a Tesla can afford to fix it if it breaks. The car seems to be very reliable and unlikely to break. I'm just saying that if you shell out $4000 for an extended warranty then odds are that you will not get anywhere near $4000 in service in return in 8 years. Of course there is a small risk that you will be unlucky and have to shell out $10 or $15k for some catastrophic electronic system failure but that is very unlikely.

AmpedRealtor | January 4, 2014

@ Amps2go,

Really? Wow. So all of us can afford a new $40,000 battery pack if it needs to be replaced? My car needed a new drive unit after 500 miles. If I needed that after the warranty expired, the cost of the repair would easily be higher than the cost of the warranty. A first year production car based on an all new ground-up design is bound to have unforeseen problems. Most owners have not driven this car for even one year, there is absolutely no way of knowing what the long term reliability of this vehicle is going to be. In fact, you should check out Edmund's long term test drive and read about the issues they've had, and this in just the first year.

I applaud your sense of confidence in Tesla. However, should this car require more than the usual amount of repair, an extended warranty would be seen as a huge perk at resale. Remember, too, that Tesla is your only source for parts. Expect to pay quite a bit.

Amps2go | January 4, 2014

Like I said, there will always be isolated examples of very expensive repairs like a failed battery. I do believe that this is very unlikely to occur in the first 8 years of ownership. Of course if you are one who worries about unlikely bad things happening to you then the $4000 will be well spent for your piece of mind. I prefer to make financial decisions based on logic and not fear.

JstACarGuy | January 4, 2014

@AmpedRealtor +1 I agree with you 100%. I bought my Model S knowing I'm an early adopter, and a high mileage driver. From reading the forums, Tesla has been great in repairing and replacing failed parts, as it goes through its maturing process. I couldnt afford to replace drive trains, door handles, sun roofs and anything else that may go wrong.

I've had a perfect ownership experiance, notwithstanding a replaced rear door handle that stopped presenting in my second week. I'm happy I bought the ESA and warranty. I respect those that didn't, but would not / and did not follow that path.

J.T. | January 4, 2014

But isn't the battery warranted to 8 years regardless of the purchase of an ESA?

Bighorn | January 4, 2014

@jtod
The battery is covered for 8 yrs. Lots of other pricy stuff though, as you know. Many folks who drive BMW, Porsche, etc aren't willing to own them out of warranty--if anything, it would be a selling point in the used market.

J.T. | January 4, 2014

@Bighorn I am in agreement. I purchased the ESA at $2500 after TM cleverly raised the price to $4000 then allowed a grace period. Best Sales Tactic ever!
But, AR bringing the cost of the one thing that is guaranteed for 8 years diluted the argument.

AoneOne | January 4, 2014

High power electronics can fail suddenly and expensively. Google Highlander hybrid inverter failures for some examples. I bought the extended warranty. Without it I would never have bought a car in its first year of production.

Luclyluciano | January 4, 2014

Is this extended warrantee a bumper to bumper warrantee? Some have said, only for manufacturer defects which is beyond useless.

J.T. | January 4, 2014

It's the same as the original 4 year, 50,000 mile warranty your car came with. However, if a defect shows up in the MCU after 4 years it is not useless.

Amps2go | January 4, 2014

The car is already covered for 4years and 50k miles. The $4000 extended warranty only covers years 5-8. These are probably the most reliable years of a cars life. The battery is covered for 8 years anyway. Modern cars are very reliable. Cars have most of their problems in the first few months and then again after 8-10 years when parts start oxidizing. The car manufacturers are well aware of this and that is why they are so eager to sell you an extended warranty that conveniently terminates when the car is 8 years old. It is a big money maker for auto dealers.

SBerg | January 4, 2014

Happy New Year! I love my MS but am falling out of love with Tesla Motors. Raising the price without allowing owners and confirmed order holders to buy at the existing price is just not world class treatment. They should have offered a 15-30 day window to decide. I know, everything is subject to change without notice but that should not be the Tesla model. And this is going to give the nay Sayers great fodder for criticism.

While I used to sing the praises of Tesla, I don't think in good faith I can do that anymore.

Bighorn | January 4, 2014

@SBerg
There was a grace period as a result of this thread.

Is it true that there are ~54 "computers" in the Model S? I know failures are most prevalent in the first 6 months, but after 8 years of the freeze/thaw cycle I'd expect some more. Many of us had to debate the merits of a $2500 additional expense--I can see there's more of a psychological hurdle at $4000. Fortunately, one has 4 years to decide whether to extend the warranty.

plaikind | January 4, 2014

Certainly keeping the customer happy is important. However, if they really determined that they would lose money on the service plan then they would not want to give advance notice of the change. If they did then owners would have locked in the lower price and they would indeed lose money. Therefore, they need to weigh customer ire against the revenue loss. Obviously, they decided a little customer dissatisfaction was better than the lost revenue. I can't blame them for that, Tesla needs to make a profit to continue to serve us longterm.

crazybrit | January 4, 2014

Folks, I know this is a long discussion, but PLEASE read as much of it as you can before jumping to conclusions based on the original post. This story had a happy ending. The price was returned to $2500 for a reasonable grace period. Tesla did the right thing. Now be happy.

Jamon | January 4, 2014

@Bighorn maybe you can add a sentence in your original post saying that this was resolved by TM.

Bighorn | January 4, 2014

@Jamon
Good point--never expected to see this resurrected.

riceuguy | January 4, 2014

I know some folks believe the warranty is a rip off, however I think the whole point of it being optional is that we can each decide how much faith we have in years 5-8 of the car, how long we plan to keep the car, and lots of other factors. So while I am all for folks offering their opinions, their is no right answer to the question of whether buying the warranty is sensible or not (the service plan is a bit different as it is mostly just pay less or pay more later). I feel like further posts should continue to offer viewpoints but with taking the tone of "this is the right answer and you're making a mistake if you don't buy it/do buy it." It would make a nice change of tone.

LMB | January 4, 2014

(LMB spouse)

LMB and I never buy extended service plans for anything, but she made an exception for the Model S. There are just too many unknowns with a brand-new design, and no one, including Tesla, really knows how well the car will hold up over 8 years.

She bought the ESA at the old price just after the new price was announced. I think the biggest risk is whether Tesla will be around for 8 years. I certainly hope so, but the world has not been kind to automotive start-ups in the last half century.

Car t man | January 5, 2014

I was referring to the possible big changes in anticipated costs of ownership, which can, and often do, completely alter initial plans for some or many people. Things like tire wear, large price hikes on important cost factors such as extended warranties, which with expensive products, can make a big difference, do have the potential to push someone over from being a fan, to
being somewhat bitter. Or have a spouse who is..

Just saying. Not expected and unanounced hikes like this, along with a thing or two that may come down the road, can spell bad news.

J.T. | January 5, 2014

@Bighorn Perhaps deleting this thread as the OP would be prudent. People seem to be taking this as in present time.

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