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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.

I have never complained about about the charge for supercharging on my 60, the deletion of the fog lights, etc., but this one really upsets me as I would have happily bought the warranty if there had been a warning of the increase! There may need to be a coordinated email campaign to George B.

Should we start another White House petition?

Wow. I have to agree that this doesn't seem kosher.

Like most of you, I've sold a few MS's since taking delivery in March. The biggest question I get from people, (after range and charging) is "How's the warranty?"

I mention the terms, and people aren't very impressed. Honestly, Tesla's basic warranty is not up to the standards of other vehicles in it's class. However, I always tell people that Tesla is a benevolent company, and I have faith and confidence that they will do right by their loyal customers in the long run.

I feel like I lied to those people.

What do I tell them now?

This does not match how Tesla had behaved in the past, what had changed?

I believe George B's email is gblankenship@teslamotors.com please all send him an email today!

Wow, this is disappointing. I live in CT, and we can't buy any service plans at all for now, no extended warranty, nothing. Right now we have to go with the $600/year, pay as you go service plan, with $100 per Ranger visit. Service plans and extended warranty don't even pop up on my screen.
I was hoping to buy the extended warranty when it eventually came available here. Now, I'm not sure what to do. Does this mean Tesla has decided that maintenance is going to be more expensive than they originally thought? Why did they do this so suddenly, without notice? Very upsetting, and not what I would expect. Eager to hear what the big man has to say.

I Just sent him an unhappy email.

I spoke with my Inside Sales Advisor at Tesla, she acknowledge the price increase to $4,000 and stated that it was simply due to the fact that Tesla determined they were losing money on service at $2,500 and needed to increase it to $4,000 to break even. She said it is not profiteering in any sense, but that is what they need to charge in order to cover their costs. She said that for anyone who previously ordered the $2,500 warranty, the old price will be honored. Her words were basically "service is costing a lot more than we had anticipated."

I think people should go back and review the plans that are offered. The 4+4 covers pretty much everything to keep the car running well, while the extended warranty which kicks in in year 4 only covers defects in materials or workmanship. If those don't surface in the first 4 years, they will probably never happen. When you buy a warranty that's what you are buying, protection from a low probability event. The price on the other plans have not changed. I'm not saying that those of you that wanted this extra shouldn't be upset. I'm just surprised that so many people wanted this plan. I never buy them myself, they are just a waste of money.

So when I bought the 4+4 plan in April, I paid $1900+1900 for $3,800. Does the $4,000 extended warranty price mean it's 4+4 for $4,000 (only a $200 increase over initial price in April)? I would certainly hope so, as an extra $1000 per year for years 5-8 seems out of line, especially if you go al a carte and pay $600 per year, but then the $600 might also increase dramatically. I hope someone can clarify what you get for $4,000, whether it's for all 8 years or just the 4 additional years above and beyond standard warranty.

let's hear more arguments for/against getting it at any price! I don't usually buy the extended warranty when I buy electronics, etc, the only exception is Applecare, but I did buy the 4+4 service plan, so I am leaning toward not getting the extended warranty, still they should have announced it somewhere. @AmpedRealtor, I don't think your Sales Advisor knows what she is talking about, we are not talking about service, this is extended warranty. Did they raise the service plan too? I don't see it since I have already bought it.

I just emailed George. Not happy about this. Current owners deserve the decency of a heads up that this is coming and a period to opt in and buy. An extended warranty at his price point was part of my purchasing criteria. Sure, ultimately it is my fault for not taking action more quickly (all of 33 days) but would any of us thought they would increase this from $2,500 to $4,000 this quickly, really? I feel slimy auto industry tactics creeping in here. I hold Tesla to a higher standard and expect better! I'll sign a petition.

@Velo
The 4+4 service plan is separate and distinct from the Extended Service plan which is a warranty that extends the free 4 year/50,000 mile warranty to 8 years/100,000 miles. It can be purchased near the conclusion of the included warranty, so most people wouldn't pay for it until the end of 3 years. I don't know how Tesla can know what their warranty costs are going to amount to on the MS in the 4-8 year time frame since it is a new car. It is a cost that most would factor into their TCO if they were inclined to stay covered. The fine print shows that extended warranties have many jurisdictional footnotes by state and some states are not even eligible eg WA.

@ portia, I specifically asked about the increase to the "extended warranty" and was told the cost of warranty repairs were much higher than expected, hence the increase to the cost of the extended warranty. It made perfect sense to me. If you are going to cover repairs after the standard warranty expires, and after having Model S in the wild for year and gathering data on service costs, hiking the price on the extended warranty represents Tesla's expected costs after the first four years.

To add to my previous post, maybe Tesla knows something about the rate of manufacturing defects that we don't? Just speculating, of course.

With the one year anniversary of the first delivery of Model S , How could service be costing so much when all the cars are still under original warranty? The extended service plan must be purchased before the original warranty expires? The cost of labor at the service center is $200 an hour?
What am I missing?

The extended warranty is purchasable anytime in the first 4 years. They can raise prices at any time. What would you all propose as to what, as a prospective purchaser, think is a reasonable policy. They should honor the price as quoted when you declared your intent to buy, but otherwise, snooze you lose.

What I think would be a reasonable approach:
1) For current owners (those who have received their cars), you are notified that there will be a forthcoming price increase (say, two weeks' notice) to $4,000. If you purchase before then, you get the $2,500 price.

2) For those (like me) currently going through the purchase process, you are able to purchase at the original price until the day you take delivery of your car or the above date, whichever is later. After that, you can purchase at the new price.

3) For those who do not yet have a confirmed reservation number, your purchase price is the new one.

Tesla called me in response to my email to say essentially they never intended to price it at $2500 and it was essentially mispriced. Kudos for the phone call, but a major, major let down on the lack of warning. Very disappointing.

Since us "early adopters" take a risk on supporting Tesla, at least have the decency to give us an "expiration" period at this price just like when you decided to raise the price of the Tesla and itemize the 21" rims.

We took a risk buying a beta! All this bait and switch crap. Swapping headliners from alcantera to textile, removing fog lights, Michellin to Continental tires, swapping prices, etc...

What's next?????

Maybe you should pay us interest for all your DUE BILL items since we already paid for it!!!!

Sorry.. just venting. Just bull$hit.

It seems to me that what they're trying to do is charge extra for the one thing they CAN charge extra for (most people probably haven't locked it in) as a way to make up for unexpected warranty claims.

Claims that happened because its a brand new design so of course there are going to be design/production mistakes. I don't think they're profiting in the near term, but its an adjustment designed to save their butts.

I imagine the Pano-roof alone has accounted for a good chuck of the warranty $'s.

How owners and in particular early adopters are being treated is very discouraging. I sent an email to George and Ownership. I would encourage everyone to do so as well. It just feels like early adopters are an after thought. I definitely do not like the direction this is going.

Maybe we need dealerships to protect us from Tesla after all....

What I am worried about is it sounds like Tesla is admitting that more things are breaking than they thought. This is extremely troubling since one of the reasons I decided to buy a Tesla was the expected lower risk of repairs due to a simpler drivetrain. If Tesla can't even figure out how much their own repairs are going to cost them, I am worried.

Kidding of course..., but this sucks. It means long term reliability is not good. $4000 to break even? There go the fuel savings....

riceuguy:
I call BS on whoever called you - see George's blog post from 11/29/12:

"2013 Model S Price Increase
By George Blankenship, Vice President, Worldwide Sales and Ownership Experience
TAGS: Customers / Model S /
66 comments
NEW PRICING FOR MODEL S

...

Model S comes standard with a Four Year, 50,000 mile New Vehicle Warranty. An additional Four Year, 50,000 mile Extended Warranty will now be available for $2,500. Please note, this is a “Four Year” Extended Warranty, not two or three years like most Extended Warranties. You will be able to purchase this option through your MyTesla page in the near future.

...

Our customers are among our most important assets and we will always strive to deliver to them the most innovative cars in the world while minimizing price increases as we have done today.

Thank you,
George Blankenship"

As I recall, this was supposed to be the great precedent for how transparent Tesla would be with annoucing price increases and we generally lauded them at the time. Now, not so much...

I emailed ownership, but if I get the same lame response, I will have to voice my thoughts to George B. as well.

Here's what I just sent to George B:

Hi George,

I picked up my Model S in April, and despite some typical delays, minor glitches, etc., I’ve enjoyed my overall delivery and ownership experience tremendously. Unlike many, the issues around fog lights and other controversies haven’t much bothered me. However, I have to express tremendous disappointment in the handling of the extended warranty pricing. I debated including the cost in my financing (an option my credit union generously offers at the time of purchase), but at $2500 it didn’t seem worth it. In fact I decided to mull over the extended warranty in general given that Tesla is so new and we’re basically placing a bet that you’ll survive another 8 years!

Well, I finally decided to go ahead and get the warranty, so you can imagine my surprise when I clicked on “Services Sign-up” only to see a price of $4000! I was even more surprised when, upon emailing Tesla Service, I got a call (nice touch) to say that essentially Telsa never intended to price it at $2500 and it was basically mispriced. Kudos for the phone call, but a major, major let down on the lack of warning, especially considering you yourself announced the pricing in a blog post, the pricing was on the website, and even in the contract. I found this to be a very disappointing response, and while I get that Tesla now realizes the offering was mispriced and appreciate that Tesla intends for service to be revenue neutral, this was still a $1500 kick in the pants that wasn’t planned for and would have been nice to have been able to include in my financing!

A more appropriate approach would have been to provide a brief window (even a week) for early adopters to make a decision without being penalized for Tesla’s miscalculation. I am often a voice of reason in the forums, pointing out the business realities rather than the emotional aspects of many decisions Tesla makes, but I’m afraid the angry mob has it right this time: raising prices on extended service may be the right thing to do, but the cost of allowing a window of amnesty would be far outweighed by the avoidance of negative goodwill created by pulling the rug out from under your most loyal customers. I hope this is the last thing I have reason to write to you about (other than for positive things, like the service and gallery staff here in Austin, all of whom have been just stellar)!

Regards,

I just checked the Tesla website

http://www.teslamotors.com/service#/service-plans

and it seems that nothing's changed.
$ 1900 for 4 years 50,000 miles

$ 3800 for 8 years 100,000 miles

Time to stop freaking out!

I think they really mis-priced it at the beginning. If you look at extended warranty prices for luxury cars like Mercedes for instance, for most of their models it costs about 3 thousand to 6 thousand bucks for 3years extended warranty, not 4 years like Tesla. It's probably similar with other luxury cars such as BMW and Audi. I hope though Tesla did not factor in their pricing one time capital expenditures for their service centers, such as one time major expenses for purchase of shop equipments. In my opinion only recurrent costs should be factored in their pricing. Regardless of other luxury cars extended warranty prices, if Tesla is encountering higher service demand than expected, they should work hard to address the root cause to keep service cost as low as possible. For instance if tire wear is one of the major problems, Tesla probably needs to modify their specifications for tire alignment, in particular specification of negative camber. Perhaps they should set the back tires with a lower negative camber spec. or add a camber adjuster to the MSs so owners can adjust the tires to their own spec to ensure the longevity of their tires.

Mercedes...Extended Warranty --- for most of their models...3 to 6,000 bucks for 3yrs!

http://www.searsimports.com/extended-limited-warranty/

@George210, we're talking about the extended warranty, not pre-paid service.


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