Extended Service Agreements No Longer Transferable?

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As I've said on other threads this is a horrible policy for Tesla owners and those who want to be Tesla owners.

If anyone had planned on selling their Model S with an Extended Warranty to a private party, this will likely diminish the value of your car as a whole segment of buyers will no longer consider a private party purchase due to the inability to transfer the extend warranty (ESA).

It seems this was Tesla's intent as they want to have the used Tesla market all to themselves with their CPO program. This unfortunately comes at the expense of diminished value for Tesla owners due to the extended warranty no longer being transferable. If this policy change remains, as cars reach 50,000 miles there will be even steeper depreciation based on some people's aversion to not wanting to own/buy one of these cars out of warranty.

We had planned on purchasing a private party car with the Extended Warranty and this policy change essentially rules out us considering the purchase of a Tesla from an owner due to the lack of an extended warranty.

An unfortunate turn of events. As a prospective owner, there is no way I would want to own a Tesla out of warranty. So this change essentially would drive me to the CPO program for a used Tesla.

If a 3rd party warranty company started selling Tesla policies, that might help, but I seriously doubt any of them will considering the sky-high repair costs.

Wow. Just, wow. I've been planning on getting the extended warranty (car at 40.5K mi) later this year not only in case car needs serious work past 50K mi, but if/when I ever sell it.

So now Tesla is presenting us 2013 buyers with a big middle finger?

Gee thanks, Tesla.

Not crazy if they changed their policy.

But I did sell my Roadster out of warranty, don't know if it was much of an issue.

My page still says 4K for the ext warranty.

I find this non-transferrable news to be appalling. It has been one of my biggest fears about buying the car.

Though I had hoped that Tesla would be more enlightened than other companies. I may well be wrong. However, I am unclear if this applies only those who purchase the ext. warr. now, or it it applies to all. If it applies to all, I expect Tesla can expect a pretty vigorous class action suit. Yes, terms and conditions are subject to change. But there is an expectation of service and commitment and the courts seems to be more sensitive to this now as the corporate abuse of citizens has gone over the edge.

It makes me so sad, actually. I believe in Tesla's mission. I think the legal "suits" are taking over and moving the company to dark side. It seems to happen every time and it just plain stinks. I still hold on to the belief that a company can make a good product for the good of all and make a profit, if the mission is valuable enough and the product is good enough.

My hope is that Tesla will be one of those companies. I have not given up my vision yet. But it has been waning over the past six months.

tbone586 said:

Based on revised language just posted on Tesla's website, it appears that the Extended Service Agreement (extended warranty) is no longer transferrable to a new owner. Very unfortunate, and will definitely hurt resale values for privately sold pre-owned Teslas.

Also, I cannot find a price for the Agreement listed on the revised website. Previously, these were priced at $4,000. Is anyone aware of what the current pricing is?

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Where do you see this information? The agreement on the "my tesla" page hasn't been updated since November 2015. If you aren't an owner you can't see that agreement so I'm wondering were you see this change.

I found what you are referring to

But if you already purchased a prepaid service plan you can transfer that with your original agreement

This is a big fail in my opinion. For owners who did purchase the ESA with the express language providing for the ability to transfer, I don't see how Tesla can refuse to honor that clause. But also a fail for subsequent owners who purchased cars still under warranty who want to purchase extended warranty coverage. With all of the negative press that is circulating over the past two months, this doesn't send a positive signal to owners or prospective owners about the longevity and reliability of their vehicles. Why do this?

Extended Service isn't Extended Warranty, is it?

don't think its a huge deal breaker, unfortunate for sure. I will not be purchasing the warranty when it expires and I'm okay with that. Doubt there will be over $4,200 of repairs for the remaining years i keep the car(probably 2-3 years).

Maaz said:

don't think its a huge deal breaker, unfortunate for sure. I will not be purchasing the warranty when it expires and I'm okay with that. Doubt there will be over $4,200 of repairs for the remaining years i keep the car(probably 2-3 years).

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Cross your fingers you don't have any problems with your touchscreen, air suspension (if you have it) or door handles.

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richrootes said:

Extended Service isn't Extended Warranty, is it?

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Yes it is. Extended Service Agreement (ESA) is what people commonly refer to as an extended warranty.

I know Tesla doesn't want to be like other car companies, but come on!

SFOTurtle said:

This is a big fail in my opinion. For owners who did purchase the ESA with the express language providing for the ability to transfer, I don't see how Tesla can refuse to honor that clause. But also a fail for subsequent owners who purchased cars still under warranty who want to purchase extended warranty coverage. With all of the negative press that is circulating over the past two months, this doesn't send a positive signal to owners or prospective owners about the longevity and reliability of their vehicles. Why do this?

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Agree.

I expect companies will change terms as time goes on, but the terms I agreed to when I purchased my 8-year Service & 4-year Extended Service plans can't be changed willy-nilly just because a company wants to. Neither contract for example, is a self-renewing agreement where the then current terms go into effect upon renewal (like your telephone, cable, etc bills). The words in both of my Tesla Agreements I purchased back on October 6, 2015 stand, with section I "Transfer of this Agreement" of my Service Plan, and section J "Transfer of this Vehicle ESA" of my Extended Service Plan remaining in effect for me to transfer to a personal party for a $100 fee on each -- or at least that is my POV as a guy that dealt with contractual negotiations for years between major corporations (I'm not a lawyer -- just a business guy). Tesla could of course engage their Cancellation clause and refund the part of each contract I paid for and wasn't used -- so that now looms more heavily over me given Tesla's recent changes. Oh, will I be !#$(&%@#('d off if they do that one day. I'm sad for any owners that have been on the fence with their decision if or when to purchase either agreement -- but you know, the side benefit of taking the leap is you lock in terms and rates, no different than one does when financing a home or loan, otherwise you take the risk things will change and you may not get the same deal.

Personally, I'm glad Tesla is at long last trying to clean-up their contractual language and provide more clarity. I am saddened they are taking this approach of not allowing transfer of the extended agreements however. As has been said, it does not bode well for Tesla's confidence in long term reliability, and to me their decision will have an impact on resale value, which for future buyers that are more discriminating than some early enthusiasts, will be a consideration. Being able to sell a used MS on the open market that comes with an extended warranty and perhaps even a prepaid service agreement for some number of years adds confidence in the buyer's decision to purchase one vehicle over another, to accept a vehicle that may be over their financial means, or by then not have the most stellar reliability record. If Tesla made this no-transfers change simply because they don't want to do the paperwork -- even though they contractually received $100 to do it -- it's short sighted. OTOH, I highly suspect these changes have been made more to try and further differentiate why buyers should purchase a NEW vs used (or even CPO) vehicle. It seems like a move a company that only really cares about making money off of new car builds and not Service, doesn't it? Owners with older vehicles that last too long don't help the bottom line of a company when Service isn't part of your business model. Upcoming shareholder results may shed additional credence to that thought. We'll see.

richrootes said:

Extended Service isn't Extended Warranty, is it?

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Most people would consider it to serve the purpose of a warranty regardless of what someone decides to call it. You are buying a product to fix the car if it fails out of the factory warranty period. Most human beings would consider such a product to be an extended warranty

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markb1 said:

I know Tesla doesn't want to be like other car companies, but come on!

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In this case, they are certainly not being like other car companies as no other car manufacturer I know has such draconian policies for an extended warranty (ESA).

What is a shame here is how short sighted this decision is. They want to boost their CPO program, in the short term by making it highly undesirable for someone purchase a Tesla private party. What this will end up causing is significant depreciation for Tesla. As stories of $1,300 door handles and other high repair costs come out, no one will want to own a Tesla out of warranty.

And if someone tried to sell a Tesla private party, they could get low balled by potential buyers who are now in fear of having to spend thousands in repairs with nowhere else to take the car for repair but Tesla. If that door handle repair ends up being $2,000 what do you do? You still have to suck it up and pay as Tesla has absolute control over the parts and repairs to the car.

WOW. I bought my S third party last year, it came with 8yr extended warranty and 8yr prepaid maintenance. The sale happened around the same time the CPO website went live. I would not have purchased the car if the warranty & service plan were not transferable!

Ryan Webb said:

WOW. I bought my S third party last year, it came with 8yr extended warranty and 8yr prepaid maintenance. The sale happened around the same time the CPO website went live. I would not have purchased the car if the warranty & service plan were not transferable!

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bought mine, it had a 6 year 100,000 bumper 2 bumper, which, at time of sale, does transfer to new buyer. I don't believe they can change that, as it's even listed in my CPO owners manual. They can only affect new orders... not existing.
When I

service agreements and warranty are NOT the same thing, according to my service rep.

SFOTurtle said:

Cross your fingers you don't have any problems with your touchscreen, air suspension (if you have it) or door handles.

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Yeah, I was mad at first but tesla acuslly
gave me no choice as I bought my model s used and have no option to even buy a warranty haha. But either way I willost likely blow through the extended warranty period within 2 years anyways since I have a couple long road trips planned.