Does a replacement battery increase resale value / insurance claim value?

[BIG ACH]

So I have an interesting question...

I have a 2013 Model S 85, with 63,000 miles... it's on the original battery and original motor. Overall it's doing great - upgraded the infotainment, Battery degredation seems to be about 4% or so... The car was purchased brand new and has been in my family since day one.

The other day I was at Carmax shopping around for another car for my wife and decided to get the Model S appraised just for the hell of it... Carmax offered $13,000....

Kelley Blue Book has it listed it for around $19,000 or so.... I'm assuming this would be around the value from Progressive Insurance if I end up totaling the car (assuming they don't go crazy low balling - in a perfect world, right? )

I'm obviously not trading in but it got me wondering... Say the battery just decides to die tomorrow...

Tesla cost to replace the battery would be $15,000.... so now I got a replacement... the car's value to me is technically now $19,000 + $15,000 = $34,000 right? But say if I got in a wreck the very next day after I replaced the battery and the car is totaled... Would Progressive still value it at $19,000 based on the mileage of the car or would the new battery be factored in?

Anyone been in a similar situation? Thanks!

 

[morbidz]

value of the car to you has nothing how insurance will value the car.
they go by similar cars available in the area for sale to make you whole after the accident.

 

[BIG ACH]

value of the car to you has nothing how insurance will value the car.
they go by similar cars available in the area for sale to make you whole after the accident.

Agreed - and that is a fair comment... but does insurance factor in the battery replacement? Whether it's for similar cars or my car?

Say in scenario 1 there are 200 2013 Teslas in the area with original batteries.

And in scenario 2 there are 2002013 Teslas in the area with brand new batteries.

Will the value be different for those two scenarios or does it just not matter - It's all about the age and mileage on the car?

 

[jjrandorin]

Agreed - and that is a fair comment... but does insurance factor in the battery replacement? Whether it's for similar cars or my car?

Say in scenario 1 there are 200 2013 Teslas in the area with original batteries.

And in scenario 2 there are 2002013 Teslas in the area with brand new batteries.

Will the value be different for those two scenarios or does it just not matter - It's all about the age and mileage on the car?

You should be able to look at what insurance companies do for older ICE vehicles that have had engine replacements. I dont think repairs to have a working car are factored much into insurance resale value. All they owe you is a car with similar age and mileage, or at least that is how that was handled in my past, for me.

This is like asking "If I replace my drivers seat that doesnt function sometimes with one that is fully functional then total the car, is insurance going to give me more money?

In your scenario above, it might be worth a few hundred dollars at most, but it certainly is not going to get anywhere near what you paid for the battery (so perhaps $500, not 15k or anywhere close to it). Thats the genesis of the term "not worth it to repair".

It might be worth more to you, or "worth it" to you, but that battery replacement would be a sunk cost.

 

[rcnesneg]

Unfortunately insurance companies don't process EVs like that - or ICE vehicles either.

The moment the car is "broken" the value drops to nearly nothing. Once it's "fixed" it's back to normal value.
I had a Subaru Outback (worth $8000) and had the H-6 engine replaced for $7000. The vehicle was then worth $8000 (instead of $2000 with a broken engine). I spent $52,000 over 2 years replacing broken or worn parts, and sold the car for $7500. It doesn't matter if it's

The best thing you can do financially to avoid this is move somewhere that you don't have to drive a car everywhere and rent from a carshare company when you need one. Cars are expensive, no matter what kind you drive.

 

[ATPMSD]

You should be able to look at what insurance companies do for older ICE vehicles that have had engine replacements. I dont think repairs to have a working car are factored much into insurance resale value. All they owe you is a car with similar age and mileage, or at least that is how that was handled in my past, for me.

EVs are blazing new territory. With EVs, mileage matters less than battery age / capacity, and insurance companies are going to need to rethink how they approach the value of older EVs.

For now, I will suggest you consider what @jjrandorin noted as to how ICE cars are handled. Is a 100K ICE car with a new engine worth more than one with the original engine? Intuitively yes, but the trick is to find cars on the market you can use as examples. In the case of EVs with a new battery, at present, such comparisons are likely difficult to impossible.

Before changing the battery I suggest it is best to talk with your insurance company so you can make an informed choice.

 

[Black306]

Tesla cost to replace the battery would be $15,000.... so now I got a replacement... the car's value to me is technically now $19,000 + $15,000 = $34,000 right? But say if I got in a wreck the very next day after I replaced the battery and the car is totaled... Would Progressive still value it at $19,000 based on the mileage of the car or would the new battery be factored in?

Problem with that equation is that it assumes the value of the car with a failed battery is $19k; that’s not the case. By spending $15k, that’s just brining it back up to the estimated $19k value.

 

[ATPMSD]

Problem with that equation is that it assumes the value of the car with a failed battery is $19k; that’s not the case. By spending $15k, that’s just brining it back up to the estimated $19k value.

Pretty sure the OP is not talking about a car with a failed battery. (?)

 

[livesmith]

From my standpoint I doubt you'll find much advantage other than to yourself with a new battery.
I'd be surprised if insurance cared what battery you had in it. Just like if you had a Mercedes and just had the engine replaced.

Personally if I were looking to buy your car and it had a bigger battery I would be willing to pay a bit more for it but nothing like what you paid for it.

 

[BIG ACH]

That is a good point and sort of conundrum I was discussing last night... Right now I am gauranteed $13k from Carmax (or maybe a bit more from another dealer) - that I can apply to a new car.... do I just take that and go trade in (I'd really rather not)... or do I try to see if the car will make it to 100,000+ miles before I decide to trade...

I understand that there are stories of Tesla's going way past the 100,000 mile mark with no problems.... but I also know there are some rare stories of customers batteries having sudden failure at 60k, 70k, or 80k miles...

So I'm sort of playing roulette with the car... maybe the car will last another 100k miles... maybe it will just die tomorrow.... What would be the smarter decision?

I don't owe any $ on the car so that is good and guess I'm fine if the battery lasts another 40-100k or whatever... I'm even fine if the car is wrecked and say Progressive pays out the car's current value.... but if I have a sudden battery failures - then well.. now I don't have that "$13k credit" anymore." and I don't have a car :/

 

[rcnesneg]

That is a good point and sort of conundrum I was discussing last night... Right now I am gauranteed $13k from Carmax (or maybe a bit more from another dealer) - that I can apply to a new car.... do I just take that and go trade in (I'd really rather not)... or do I try to see if the car will make it to 100,000+ miles before I decide to trade...

I understand that there are stories of Tesla's going way past the 100,000 mile mark with no problems.... but I also know there are some rare stories of customers batteries having sudden failure at 60k, 70k, or 80k miles...

So I'm sort of playing roulette with the car... maybe the car will last another 100k miles... maybe it will just die tomorrow.... What would be the smarter decision?

I don't owe any $ on the car so that is good and guess I'm fine if the battery lasts another 40-100k or whatever... I'm even fine if the car is wrecked and say Progressive pays out the car's current value.... but if I have a sudden battery failures - then well.. now I don't have that "$13k credit" anymore." and I don't have a car :/

Start a savings account for another car and keep driving it. Statistically you save the most money by having the least. Not having a car is best obviously but statistically you're most likely to have it run for ages with a few $2-$4k repairs.

Or trade it in for the cheapest high-mileage model 3 you can find (probably around $20k) since they seem to be more reliable and have less problems. I think you would break even between maintenance on an old S or trading to an early model 3.

 

[E90alex]

Generally, no. If you are selling to a private party, you might find someone willing to pay extra for yours with a new battery over another one for sale, but you will not recoup the full (theoretical) $15k cost. Maybe a few extra thousand.

But if you’re trading it in or getting a payout for a totaled car, they won’t care.

 

[ucmndd]

I think you could successfully argue to an insurance adjuster that there is SOME value to the new battery - specifically the warranty coverage that it comes with that any other “comparable” car they pull wouldn’t have.

But it won’t be anywhere near the entire $15k replacement cost.

 

[BIG ACH]

So my preference is to keep the car for as long as I can... I don't necessarily care to have the latest.... but thankfully the funds are there if I do need to buy a new car....

At the same time $13k could be a nice down payment on said new car...

I understand that statistically speaking a battery will probably go much further than 60k miles... at the same time... it's still a 10 year old battery.... if that or the drive unit suddenly fails... then there goes that bonus $13k lol

 

[NV Ray]

I agree with all forementioned comments. On a personal level, I purchased my 2012 MS P85 last Fall from the original owner for $27k. 3 days after purchase I got the BMS_u029 alert requiring replacement pack. I chose to purchase a NEW pack from Tesla for $20k.

I make my decision knowing the risk that my car is not now worth $47k - either from my insurance or if I sold it. However if I did nothing it was worth probably $7k-$10k.

The only advantage now is that if I choose to sell my car, I'd have a better chance of selling vs a like car without a replacement pack.

 

[jjrandorin]

So my preference is to keep the car for as long as I can... I don't necessarily care to have the latest.... but thankfully the funds are there if I do need to buy a new car....

At the same time $13k could be a nice down payment on said new car...

I understand that statistically speaking a battery will probably go much further than 60k miles... at the same time... it's still a 10 year old battery.... if that or the drive unit suddenly fails... then there goes that bonus $13k lol

Dont confuse "worth to you" with "insurance value" as those are usually no where near being the same thing. Also, to put some perspective on this, you are talking about "losing 13k" but, even if you had to buy a new battery for the car , the cost to you would still be less (much less) than the cost to you of buying a new car (even though your existing car would not be worth what you put into it at that point).

13K + 15 = 28k, and you are not buying any brand new Tesla for 28k spend, so whether your existing car is "worth it" or not to insurance, you would still be out significantly more money buying new vs keeping and repairing, provided you are happy with continuing to drive the car you have.

None of that makes insurance value any different, if you replace the battery, but you are not going to "save" by trading your car in now. There are plenty of reasons to buy a new car, but "save" generally does not fit the bill on that.

 

[TLLMRRJ]

Yes, this is another hidden area that we will be screwed with EV's. You will definitely be underinsured after a battery replacement. That is going to be a lot more common than engine replacements because they go bad with time, just like milk, regardless of mileage, driving habits, maintenance diligence, and charging habits. It's just a chemistry thing.

 

[NV Ray]

You should be able to look at what insurance companies do for older ICE vehicles that have had engine replacements. I dont think repairs to have a working car are factored much into insurance resale value. All they owe you is a car with similar age and mileage, or at least that is how that was handled in my past, for me.

This is like asking "If I replace my drivers seat that doesnt function sometimes with one that is fully functional then total the car, is insurance going to give me more money?

In your scenario above, it might be worth a few hundred dollars at most, but it certainly is not going to get anywhere near what you paid for the battery (so perhaps $500, not 15k or anywhere close to it). Thats the genesis of the term "not worth it to repair".

It might be worth more to you, or "worth it" to you, but that battery replacement would be a sunk cost.

You're right. There's no box to check that says "got a new engine". Although I'd submit new engine=RDU. New pack=?

 

[cduzz]

I know for "classic" cars you can just say what you want the value of the car to be if it's totaled; there's no way to value a 1963 hillman minx otherwise....

Can you get declared value policies for modern cars? If the insurance company believes the replacement value of the car is $14,000 they'll set the policy cost at that value.

 

[TLLMRRJ]

I know for "classic" cars you can just say what you want the value of the car to be if it's totaled; there's no way to value a 1963 hillman minx otherwise....

Can you get declared value policies for modern cars? If the insurance company believes the replacement value of the car is $14,000 they'll set the policy cost at that value.

No, you can't.

I have those "agreed value" policies for my collector cars. The agreed value is based on what you spent to buy the car, and it can be adjusted up if you make a convincing case for improvements or market appreciation. They will not just let you declare the value you want. Otherwise you could buy a $30K collector car, insure it for $3M, and have it "accidentally" burn down to the ground with a fuel leak.