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Re-Thinking the Service Plan

In light of today's announcement, I'm rethinking the service plan. I just bought the 4+4 plan, but the announcement strongly implies that there really won't be much need for service for at least the first couple of years, and now that a full menu of annual service isn't required to maintain warranty protection, the economics seem to favor wait and see (at least for those that don't put on obscene mileage). What do my far more brilliant fellow owners think?

I'm keeping mine too. My service center in Menlo Park, led by Randy and his awesome team has been nothing short of first class to deal with -- knowing that I'm covered across the board by such a fine team is more than worth the expense.

With regards to the wheel or curb rash raised by rd_redford not being covered under the tire plan-- you are correct. I decided not to purchase it as it was managed by a third party, and had lots of hidden issues and stipulations. (Pre authorization required, no automatic tire replacement so the speed rating is intact, no curb rash coverage, etc.)

So for tires I decided to take that risk myself. When I gave my beauty a touch of curb rash, by accident, Randy and his team to the rescue. I of course needed to pay out of pocket for the damage but it was repaired and my wheels look amazing.

You do have to be happy with a company that constantly finds ways to improve its deliverables to its customers. SInce I bought the car it has just been one improvement after another. My Tesla grin is still here and bigger than ever.

By its terms, my Service Plan provides that if I cancel without claim within the first 31 days, I am entitled to a full refund. So the fact that I purchased a 4+4 plan before Elon's announcement should not cause me any difficulties.

Regarding the New Vehicle Limited Warranty ("NVLW"), as I see it, nothing has really changed. Notwithstanding George Blankenship's comments to the contrary, the NVLW never provided that it would become void if I failed to perform annual inspection and maintenance. Such an interpretation would probably be unenforceable anyway. The NVLW provides that it MAY be void if I fail to perform the recommended inspection and maintenance. I interpret this to mean that, under the NVLW, TM may refuse to cover any problem that could have been avoided had the recommended inspection and maintenance been performed. In other words, the entire warranty does not automatically become void if I miss a service, but I may be responsible for particular problems caused by my own negligence. In this respect, I do not think that Elon's announcement changes much, if anything. If I ignore warnings, or never check the things that should be checked, my warranty may not cover me if those things fail.

The question remains whether I should perform the recommended annual inspection and maintenance, either $600 per year or $1,900 for four years. The Model S is a sophisticated and expensive piece of machinery, and includes a lot of cutting edge technology. A prudent owner would want to have it looked at and spruced up from time to time. Who but TM would have the knowledge and equipment to do this? Yes, it is expensive for the amount of work they are likely to do. But since I never put much stock in the threat to void the warranty before Elon's announcement, and I still bought the prepaid Service Plan, I don't see any reason to cancel it now.

What TM did was clever. By removing the threat of a voided warranty, TM did what it was probably required by law to do. But it did not lower the cost of service, which admittedly is high. I think most people will probably still have the service performed, because it is prudent to do so. But they will feel better because they are no longer being bullied into it.

Just about every new vehicle warranty, including the much beloved Mercedes Benz, has a clause in it that says that certain repairs will not be covered by the warranty unless the owner has a documented maintenance trail. This is standard stuff. You can't drive your ICE dry of oil and then expect the engine to be replaced for free. Tesla warranty has weak language that appears to say the same thing. But that is up to the lawyers to decide for those of you who forgo the maintenance in favor of letting your car go to pieces. That may not be much of a problem since Tesla's lawyers are all probably jumping off the building in Palo Alto after yesterday's announcement.

Wear and tear items are not covered by warrany anyway. Most owners think of brakes and windshield wipers in this category. But electical contacts, 12 V batteries, not to mention seat and floor covers, door latches (I don't mean the servo failing, I mean the latch wearing). In any cases, switches (like for the charge port door do wear out. I don't want to go there. This is new technology. I don't understand the Caddy service guy when he says that the framich wore out on my schizometer and that isn't covered on the warranty. So is this going to be better? I would rather be safe than sorry. Consider this scenario: Your door handles stop presenting. After working on the car for 24 hours, they determine that electical contacts which haven't been cleaned and adjusted in 20000 miles shorted out the servo. The problem would most likely not have occurred had the regularly scheduled maintenance taken place. Do you really want that in your life?

I plan to have regular scheduled maintenance and I will pay in advance so I can save a few bucks on it. I trust that I will get value for my money. I trusted them with 94k already, I can trust them with another 475 a year.

Hmmm some major decision maker at TM was actually paying attention during their 'process improvement' section of their Quantitative Analysis Course while doing their MBA. TM's resolution of issues from the 40's to the mandatory service plan almost reads like a Harvard Business School case study...

The customer wins, but TM wins long term by winning the hearts and minds of Tesla buyers and their family and close friends...

TM - textbook example of how to do business right...

@FLsportscarenth,

Mostly TM is reactive not proactive. Communication with reservation holders is close to zero, I have always had to make the first move and call.

@Chuck

I would give them a certain amount of credit - on paper the 40-60-85 selling scheme seemed good. Sales were lagging for 40s and reservation holders were getting pissed at production delay. TM could not have foreseen these things so guess what? 40's get a 60 with a pay to upgrade option. This is a very pro-customer thing to do. TM is new at mass selling an is learning well - giving customers a great solution counts as good problem solving in my book. TM seemed to have its ear to the ground and came up with a winner. I do not see the same level of customer care from other manufacturers and once TM irons out the bugs and is 'caught up' it stands in a position to eat the other guys lunch.

You can be proactive with established processes, when in new territory creative pro-customer fixes are innovative improvements. What other manufacturer's entire output is 'bespoke' and production of a totally new model? That is a lot of individual responses, if I was in TM's position would be hard to respond. Tesla's volume will only get bigger, in future they will need some inventory for 'the lot' and to keep costs down make sure cars are delivered right so few human time intensive fixes and corrections.

I plan on the 4+4 plan as well. I can make no better argument for it than has already been made by inherkinr, trushin and norcal. However, I will add that Musk indicated that the yearly (or 12.5k mile) check ups would include hardware updates as well.

As to customer service, I do not expect to speak with someone directly each time I call. Any question I have asked has been answered within 24 hours of my phone message or email.

inherkiner.....My friends and family have expressed similar sentiments to me about my sanity!

I just signed up, I appreciate everyone's input.

It's reactive because TM has realized that it's much quicker and more efficient to invent the core idea then toss it into the crowd (the press and us). We work for free vetting every possible permutation of a solution, and then we throw it back. They sand it, polish it, and present it as sheer brilliance....and it is. Crowd source your solutions and you've addressed the majority of potential customer concerns and deepened their loyalty.

In my case during reservation TM was always ahead communicating, never had to call. Emails arrived always a couple of days ahead of expected. Delivery was available first day of window. ( Service is another story )

Still struggling with the merits of the extended warranty. With the extended warranty (repair) agreement there is a $200.00 per part/ item deductible which can only be assessed once on each part/ item. This would mean that if all four door handle servos go in the 5th year, and for the purpose of argument each costs $400.00, I'd still receive a bill for $800.00 (4 handles x $200.00 deductible). If all four handles blew again in year 7, I wouldn't pay the deductible again on any of them. So I'm paying the first $200.00 on potentially every part that fails. Am I reading that correctly?

I drive about 25000 miles a year. Now I am glad that I only need to bring my car in once a year instead of twice a year, the 4 year or 4+4 plan would really end up costing $950/year. That may include tire rotations, etc but I can't imagine that a tire rotation will cost $350. I realize all of the other potential benefits, but ultimately the once a year out of pocket $600 cost is the better way to go for me.

Extended warranty is a must. But the nice thing there too, is you don't have to purchase until the initial 4 year warranty is about to expire. Way more consumer friendly in the end. Unlike most car dealers who push to have you pay it all up front.

Sure I can wait, but then it will be like the bag of potato chips I waited a week to buy, the price jumped 30% and the weight dropped from 9 to 7 ounces. An imperfect analogy but I'm still a little miffed about my chips. It's unlikely the extended warranty will be $2500.00 in four years unless you're in the deflation camp.

@DouglasR +1

I purchased the 4+4 plan and intend to keep it. I also plan to purchase the extended warranty. My decision has a lot to do with personal circumstances and preferences. TM is very new and hard facts are rare at this stage in the process. Early Adopters should be prepared to mitigate a variable level of risk.

1. I make many decisions based on how they will affect my stress level. Life Is Good because I chose to live it that way. I never risk the financial health and safety of my family. I'm not wealthy. I save. I keep spending under control. I sleep well.

2. TM is a new company developing a new car and service model. I can afford to take the risk if a reasonable safety net is in place. Otherwise, the Model S is out of my reach.

3. I'm optimistic but not naive. I'm confident that something expensive will need replacement within eight years. Aside from things such as wiper blades, are there any inexpensive parts on a Model S? When a breakdown occurs, TM will see that I maintained the car and planned (paid for) unforeseen issues. We won't play the blame game. Correcting the issue and maintaining a good relationship will be their best option, even from their perspective. There are enough owners online to sink TM if they don't act reasonably for owners who play by the rules.

Again, this is a very personal decision based on how I live and my financial resources. I understand there are other owners with very deep pockets who can assume a different risk level. Each of us will need to make a decision based on personal values. There's no wrong answer. Do what works for you.

I think you can buy the extended warranty at any time prior to the expiration of the original warranty -- at least that's what Tesla HQ told me. It may be more expensive 3+ years from now, but I'm willing to take that risk rather than plunking down $2500 on it now.

As for the service...I'm leaning toward NOT taking a risk on that, and paying for that now. Just trying to decide between 4 year and 8 year.

Tesla has yet to say whether software/firmware updates will be free without a service plan. People have assumed so, however, this is not confirmed. Hopefully they will confirm one way or the other before my time window runs out.

Those considering the extended service plan (warranty) might want to read the fine print to see all the things that are excluded. This is not a bumper to bumper extended warranty.

So the 4-year plan extension reads: "Four year extension to prepaid Tesla Service. Up to a total of 100,000 miles"...

Anyone think this means that you can add it later if you bought just the 4-year plan (it's a prepaid service)?

from the service agreement: "...cover the
specified annual maintenance inspections for the subject Vehicle for the selected plan (the “Plan”), with
coverage becoming available on and retroactive to the date of purchase of Your Vehicle or, for Additional
Plans, the date of expiration of Your initial Plan (the “Effective Date”), provided that You purchase this
Agreement no later than 30 days after the applicable Effective Date."

So you can still add the additional 4 year plan for $1900 as long as it is before the Effective Date of the initial plan (4-year plan).

That would be nice cause I only have enough for the 4-year plan at this time, since I've been buying TSLA stock with my extra cash on hand (pre earnings release)! :)

Seriously guys this is a car in the Mercedes S class cost category. Please ask any one who owns an S class how much maintenance costs over 100,000 miles. (including the cost of an extended warranty).
Even a Lexus LS will cost you much more than this Deal.

@illioilli - No, it is not at all clear that you can add the second 4 years later. The sign-up page says this:

"Four year extension plans are only available in combination with an initial four year service plan at this time. Extension plans may be available for individual purchase in the future. Availability, duration, and pricing subject to change."

The language you quoted describes the coverage term if you purchase an agreement no more than 30 days after its Effective Date, but it doesn't guarantee you the right to purchase the second four year agreement separately.

I routinely get mail trying to sell me extended warranties on my other cars even though the regular warranty has run out. It's all about statistics and predictable cash flow. I see no reason why Tesla would not do this. Of course, the future cost will be more. But will it be more than the future value of what it costs now?

Interesting: today my "sign up for services" page no longer says "xxx days remaining". Yet all the options remain the same!

I purchased the 4-year non-ranger service. It appears I CAN upgrade to Anywhere and/or +4 extension with just a click of the mouse and a credit card.

So I still don't understand: what does Ranger service provide that Free Loaners does not? (From a customer point of view I don't care whether they fix it in my garage or their shop as long as I have a nice loaner car to drive and its valet delivered to me).

Depends on how far you live from a service center.
I live 465 miles from the nearest SC. Have a feeling ranger service is the way to go for me.

I live 25 miles from 2 service centers and signed up for ranger service. Probably I will never use it, but just for the peace of mind. Cars have the tendency to need service when work is killing me and just to have the option to say please pick it up is worth every penny.

@pilotSteve - One difference might be that loaners are available only if the service will exceed four hours, whereas Ranger service is available no matter how long the service will take.

The loaners only kick in for 4-day service. No such restriction on Rangers.

ddruz@aol.com,

Software/firmware updates are free even if you do not buy a service plan. I live in Connecticut, and due to annoying laws here, Tesla cannot sell a service plan because they don't have a dealership in the state. I discussed this with the ownership team at Tesla, and they informed me that I can just pay the $600 per annual service, and I would have all the same benefits as people who purchase the service plan, except I cannot pay for unlimited Ranger visits at this time. If I had the option, I would buy the service plan with unlimited Ranger visits because it doesn't seem that pricey to me considering the new technology and the amount I've spent on prior luxury car service.

The $600 annual service IS a Service Plan. You get exactly the same as what you get in one year of the $1900 prepaid 4-year plan.

(I hope this formats correctly the first time since there's no edit button!)

So, here's my latest email exchange with Tesla on this subject:

GeekEV wrote:

"

I'm trying to figure out if this is still worth having and could use your help. I've read the information at http://www.teslamotors.com/service but am not 100% clear on what exactly the plans cover. Please help sell me on why I should keep the service plan?

1) It was my understanding that all cars would receive software updates and new features for as long as you support them, but the service page seems to suggest that updates, monitoring and remote diagnostics are all a feature of the service plan. Does that mean that if I drop the service plan and do not get the annual service checks that I will lose some or all of those things?

2) The service says it covers 'replacement parts like brake pads and windshield wipers (excluding tires)'. Based on my prior experience with hybrids and other EVs, the brake pads will last a very long time before needing replacement. Wipers are cheap. What else would be checked/replaced at these services?

3) Someone on the forums was indicating that the annual service (for the Roadster at least) included hardware upgrades with any re-designed or improved parts as well as a general 'reconditioning' of the vehicle to maintain it in tip-top shape - is that accurate and true for the Model S service as well?

If the service plan will keep my car in premium condition, then I'll probably keep it. If, on the other hand, all it really nets me is an annual inspection then I probably won't. As you can imagine, I got the plan because the service was mandatory to maintain the vehicle's warranty and the plan was equivalent in cost to $600 x 4 that I would have wound up paying anyway. Now that it's optional, I'm struggling to figure out why I need it. Any mechanical failure or deficiency would be covered under the standard warranty anyway and what maintenance items an EV does have are infrequent (brake pads) or inexpensive (wipers and cabin filters).

I want to keep my car in tip-top condition, as it's the first luxury car I've ever owned, but I just don't see what the service plan does for me. Any further insight you can provide would be most appreciated.

"

Tesla Ownership wrote:

"

Thank you for seeking clarity. At this point, if you would like to withdraw from your service plan in the next 60 days, we will not require notarized affidavit.

Also, replacement parts like brake pads and windshield wipers is not covered under warranty and only included as part of annual service. We can, of course, provide these for you but there will be a fixed ost to provide and install. However, 24 hour roadside assistance, system monitoring, remote diagnostics will be included free of charge under your current new vehicle limited warranty. Software updates are free for the time being and the foreseeable future, but may become a paid service. No further information is known regarding this possible change of process. And lastly, new features is regarding software based enhancements from what I was able to gather. No plans have been expressed to add hardware features to our current vehicles.

Please reach out again if there is anything else we can assist with.

"

GeekEV wrote:

"

Thank you for your response. I want to make sure I take every care to maintain my vehicle in tip-top shape, but at the same time I don't want to spend pointless money. Given your comments, I'm struggling to find the value add of the service plan. I'll keep it if I can find one. I know things are in flux and maybe the answers aren't known right now, but do you see any value in the plan that I'm missing?

With respect to hardware upgrades, Elon's blog post said this:

http://www.teslamotors.com/blog/creating-world%E2%80%99s-best-service-an...

'...to address a few things here & there and perform any hardware upgrades – our goal is not just to fix things, but to make the car better than it was.'

What kinds of things here and there? What kinds of hardware upgrades? Better how?

Thanks again!

"

Tesla Ownership wrote:

"

To follow up: I believe that what Elon is referring to comes from our Roadster experience. Sometimes a reinforced or reengineered part becomes available for your vehicle. As a part of annual service we will switch the part out. There is not specific part list at this time, as Elon is making a forward looking statement. If you come in for an annual service at any time, we will perform this service. It is not limited to those that heave prepaid 4 years.

Regarding value of the service plan: I believe that it is good to properly maintain your vehicle as outlined by the manufacturer. However if you do not see the benefit to our annual service or deem it unnecessary in your mind, you are free to refund at this time.

"

GeekEV wrote:

"

Alright, since the service was mandatory before to maintain warranty and I knew I'd be paying $600x4 anyway the plan made sense. Give what's transpired and your information, I believe it makes more sense to cancel and I'll just play it by ear and bring the car in periodically when it makes sense to do so.

Just to confirm, there's NO difference between having the plan and paying for service on a case by case basis, right? If so, please proceed with processing a refund for me.

"

Tesla Ownership wrote:

"

There is no difference as far as the warranty is concerned whether you service annually or as you see fit. I will continue with the refund.

"

Based on this exchange, my current plan is to get a refund and just manually schedule/pay-for services whenever it feels appropriate based on how the car's holding up. Maybe every year, year-and-a-half or even two. We'll just see how it goes. I hope this helps someone else decide...


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