
Tesla Model S Service Contract: $600/Year, Or Warranty Voided - tocomment
http://www.greencarreports.com/news/1079637_tesla-model-s-service-contract-600-year-or-warranty-voided
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paulsutter
Article has Mercedes costs completely wrong. My S63 has around 50,000 miles on
it but I've gone through four sets of brake pads. And mysteriously, the rotors
are always "just under spec" and always need replacing too. That's $3000 per
brake job, not to mention the myriad other issues they discover on every
service. The base price for regular service doesnt begin to cover the costs.
Luckily I didn't have to pay for the engine work once to fix a stuck lifter
and again when it was spewing oil all over the road. Admittedly, I drive my
car a little harder than most, but costs are costs.

I should get my Tesla model S around June and eagerly await the same
performance with only $600 a year maintenance.

~~~
IanDrake
I had a CLK430 and it was like a race car. By that I mean it needed a pit stop
every 100 miles. God I wasted so many billable hours in the shop.

Also, the brake dust would regularly turn the front wheels black. I was always
told it was the "high performance" nature of the pads.

I drive a Prius now and I still drive faster than 95% of people on the road. I
just look like a dork doing it.

~~~
ScottBurson
Yes, high performance brake pads do make black dust.

~~~
rdl
Really high performance pads make white dust, and much less of it (ceramic,
usually a $5-10k option)

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bengl3rt
In my opinion, the whole thing can be explained in three words from Musk's
reply: "concierge level service".

I have always been amazed (in a bad way) at the quality of the work done by
service departments at luxury and high-end car dealerships. I'm not sure what
kind of agreement these independently-owned dealerships have that they're
allowed to use the manufacturer's corporate identity to promote their
business, but it should be a whole lot stricter.

Conversely, I've never had my laptop receive a shoddy repair at an Apple store
- after all, the repair facility is owned and being operated by the same
company who built the machine in the first place, so they share common goals
and incentives. If Tesla is trying to do for car dealerships and service
centers what Apple did for high-tech retail, the privilege of participating
would definitely be worth $600/yr to me.

Now, Apple does have a licensing program in place to certify independent
repair facilities as "Apple Authorized Service Centers" where warranty work
can be performed. I think Tesla would do well to create a similar program, and
maybe they plan to! Who knows, it's early days yet.

~~~
AJ007
There is a reason why you can take a car to a mechanic and end up with it
worse off than before you took it in. Car mechanics are incentivized by the
dealer to push out jobs quickly. This isn't because they are lazy, its because
their ability to make money depends on it. That means real fixes are
substituted for patchwork fixes.

I don't drive much, but when I do, I like to take my car to a mechanic that I
can watch in person make the repairs.

~~~
bengl3rt
I have always wondered what my recourse is when a mechanic does shoddy work.
Can I sue them in small claims court for the cost of repairing damage that
their workmanship caused?

In this case I'm thinking of the time just a few months ago when a hose clamp
that was misplaced during a cooling system overhaul caused a head-gasket-
damaging overheat... which cost $4800 to fix.

~~~
mikestew
(Ex-ASE-certified mechanic here, but IANAL.) Your typical recourse is to
return to the shop and have them do the job again. Yes, the faster a shop
turns out a job the more they make per hour. But if a car comes back, the
money made on fast turnover gets lost quickly. So contrary to popular belief
there is an incentive to do the job right. If the car comes back, they should
work on it until it's right.

Now what if the shop said, in your example, "too bad, we're not fixing the
head gasket"? I'll start with saying that court is probably your next option.
But I have two other things to add. First, a decent shop would replace the
head gasket if they screwed up. Once in a while a shop just has to eat a big
job due to a screw up.

Second, though, is that it's sometimes hard to properly place blame. I don't
know the details of your situation, so forgive me for assumptions, but head
gaskets don't just blow the instant the overheat light comes on. Yeah, the
shop may have screwed up, but that doesn't absolve the driver from pulling
over when the light comes on. So who do we blame? Well, that's why you call a
lawyer. :)

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Peroni
_Parsing Tesla's $600 fee, let's allocate $100 for the wiper blades, roadside
assistance, monitoring, and software update features._

What about the brake pads mentioned in the previous paragraph? Replacement
pads plus labour for fitting would run to $200 easily. I'll take most
opportunities to bash Tesla but $600 a year is relatively cheap in my opinion.

~~~
mikestew
What about the brake pads? With regenerative braking, I expect the pads on my
Nissan Leaf to last almost as long as the car.

Whether the $600/year is a good price is irrelevant. The matter at hand is
"pay us $600/year or we void your warranty". It's shady, for one, and of
questionable legality given Magnuson-Moss.

~~~
tehwebguy
Was going to say what your parent said, but now I realize I might be missing
key info about regenerative braking.

Do these types of cars use the engine for most braking, even when the pedal is
pressed?

~~~
mikestew
With the regenerative braking on the Nissan Leaf (what I own and can speak to
with some authority), pressing the brake pedal does not mean the pads touch
disk. What happens most of the time, and for most of the braking right up
until the car comes to a stop, is that the electric motor is turned into an
electric generator. I can watch the meter on the dashboard switch from
sucking-juice-from-battery to dumping-juice-in when I hit the brakes. I also
assume there are some large capacitors involved, as I can't imagine any
battery likes having 30kW being dumped into it.

As far as I can tell the only time pads touch disk are 1) emergency stops when
the generator can't cause enough load to safely stop the vehicle 2) below
about 10mph (not much load from the generator) and 3) the battery is fully
charged and has no room for additional electrons. The transition from
generator to pad-and-disk can be felt if one is looking for it.

In summary, the vast majority of the braking on the Nissan Leaf appears to be
done _without_ the conventional brakes. I assume the Tesla works in a similar
manner, hence my comment.

EDIT: added a third reason for conventional brake use.

~~~
Peroni
The Nissan Leaf is designed for short trips and city driving primarily. In
those conditions a significant amount of braking is done under 10 miles an
hour.

Also, in almost all 2 wheel drive cars, regenerative braking only applies to
the wheels being driven and standard, dynamic braking is applied to the non-
powered wheels.

I would sincerely be amazed if your brake pads lasted you even half the
lifetime of the car and I will willingly hold my hands up and admit defeat if
I'm wrong.

~~~
dllthomas
IANA Automotive Engineer, but I notice that while much breaking happens below
10mph (everytime you come to a stop from any speed, you're doing some breaking
under 10mph, right?) break pads are likely to get worn far more at higher
speeds - kinetic energy depends on the _square_ of the speed, right? So
decelerating from 35mph to 10mph, the break pads need to absorb (for some k) k
* 35^2 - k * 10^2 units of energy, while decelerating from 10mph to 0mph is k
* 10^2. The difference is more than an order of magnitude, and it only gets
bigger as the speed increases. This doesn't even take into account all the
times we slow from 35mph to 25mph, which is about 6 times as much energy as
slowing from 10mph to a stop.

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protomyth
"Moreover, any visit to a non-Tesla shop--even for something as simple as tire
rotation--will also void the warranty. Period."

That might get them into trouble, there are laws protecting independent
service shops. This is a fought battle and the manufacture lost.

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larrys
Not unusual for a high end car. In fact when I had a MB I remember very
clearly having to pay for scheduled maintenance that iirc certainly approached
$600 per year to maintain the warranty. BMW as others have pointed out
includes all maintenance. This is essentially an economic decision on the part
of the manufacturer. They could of course increase the price of the vehicle
and give you free maintenance but then they would sell fewer cars. Although in
general BMW cars actually are priced comparably to MB they have decided that
they can sell more cars by including "free maintenance" than lowering the
price of the vehicle (at least in the market that I am in it may be priced
differently elsewhere).

[http://www.mbusa.com/mercedes/service_and_parts/maintenance/...](http://www.mbusa.com/mercedes/service_and_parts/maintenance/src-4050)

Cars today are very complex. It is not unreasonable for the manufacturer who
is extending a warranty of 4 or 5 years to require you to do certain things to
maintain that warranty.

Edit: And to require this to be done at authorized dealerships not the corner
mechanic.

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notlisted
Sounds like he has never owned a luxury car and can't afford a Tesla...
(neither can I) If you can can't afford the maintenance, you can't afford the
purchase.

Did anyone else have a laugh at "the Volt is among the most complex cars on
the road today--far more complicated than the Tesla"?!

Reminds me of my friend who saved up for many years and finally got that
Porsche, only to discover that fixing a small dent in the bumper was $2k+. "I
don't have that kind of money." Car-poor.

Several years later he bought a house, then got a leak in the basement and the
water heater needed replacing... "I don't have that kind of money." House-
poor.

~~~
toomuchtodo
The Model S is extremely simply from a drivetrain perspective. AC motor <->
energy transfer management <-> energy storage

Chevy Volt: AC motor <-> energy storage <-> onboard generator

So I can keep my Model S reservation and shell out $600/year on top of the
$50K+ purchase, or I can purchase a Volt and have a generous warranty I don't
need to pay extra for.

Hard choice for the practical among us.

~~~
reneherse
The Volt is even more complex; IIRC in some scenarios (such as when driving at
high speed with a low battery) the internal combustion engine can also provide
power to the drive train through mechanical means.

~~~
notlisted
I was not implying that it was less complex. I chuckled about the suggestion
that because the Volt was more complex, Tesla maintenance should be cheaper.
Once does not imply the other.

Do note that the additional 'complexity' of a combustion engine actually makes
several things much easier, not in the least the fact that running dry is far
less likely, power to all systems is pretty much guaranteed, etc.

Of note and relevant: [http://www.complex.com/rides/2012/09/general-motors-is-
losin...](http://www.complex.com/rides/2012/09/general-motors-is-losing-up-
to-49000-per-chevy-volt-but-is-stealing-toyotas-prius-customers)

~~~
reneherse
Oh, I was just noting that the Volt's system for getting power to the wheels
is more complex than the "series hybrid" it is widely believed to be. I.E.,
the engine is not merely just a generator, as it is the case of the Fisker
Karma. (It was late, and I wasn't actually making a comment on the cost
justification of the maintenance program.)

But I agree that the pricing of the maintenance program should be independent
of the complexity of the vehicle architecture. One is an engineering decision,
the other is largely marketing & customer relations (not to the exclusion of
financials, of course).

As far as Tesla's choice to price their program at $600 a year, it seems in
poor form for a luxury priced vehicle. To me, the hallmark of a true
"concierge" level of service (which is what Musk indicated as their goal)
would be that it's included in the vehicle price, at least for the first few
years, a la BMW. Beyond that, perhaps they should just take a page from
Apple's book, and offer an extended "Tesla Care" warranty program to continue
the service.

$600 a year seems like petty nickle and diming your customer if you're already
charging them 80 to 100K for the car.

------
mvkel
Not terrible considering the infancy of the technology and the value these
services will provide Tesla. If you can afford a $60K+ car meant for early
adopters, you can afford an extra $600/year.

~~~
jws
It doesn't seem far out of line at all.

I just checked, I'm paying just over $300/year for dealer service and
inspections on my Ford Transit Connect which sells for about 1/3 of a Tesla S.

I'm not getting roadside assistance (of a revision 1 vehicle), monitoring, or
wiper blades. Heck, they usually neglect to reprogram the tire pressure
monitor when they rotate the tires.

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ChuckMcM
This is required if Tesla wants to survive as a car company. It reads like a
way to distribute the impact of the large problems that are going to crop up
early on (battery failure, recall for some part going wonky, Etc)

~~~
protomyth
Well, if it is required for them to survive, they are going to have issues.
Magnuson-Moss Warranty Act and some state laws keep auto dealers and
manufactures from pulling the "service with us or lose warranty". There are
generally exceptions for freely provided services, but this isn't it.

Car modders and local services shops have been down this road before. Honestly
expecting every service to occur at the dealers is foolish.

~~~
SoftwareMaven
Whil ou are completely correct, it will be many years before I would trust
having my Tesla (if I was getting one...) serviced[1] anywhere that doesn't
have Elon's personal seal of approval. While the warrantee can't be voided for
taking the car somewhere else, it can be voided if Tesla can show damage is a
direct result if work done.

If I blow my engine after I put a NOS kit on it, I will likely have voided my
warrantee. If I do it after putting a cold-air intake on it, I probably
haven't voided it.

1\. The tire-rotation thing seems silly, but perhaps doing it incorrectly will
damage the regenerative baking system. If that's the case, don't ever get a
flat tire in the middle of southern Utah.

~~~
protomyth
If a tire rotation damages the regenerative breaking then someone designed
something horribly wrong.

Your decisions are your own. Which is a great thing. Forcing a decision in an
industry with so much law history is not a good move.

~~~
SoftwareMaven
I'm merely hypothesizing ways in which it is possible for Tesla to be in a
situation where 3rd party service could legally void the warrantee. Tesla
can't just void the warrantee because they say they void the warrantee.

And, for the record, I agree with you about the tire rotation.

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ValG
The way they're going about it might not be the right way, but having worked
at and run car dealerships, $600/year is not out of line (granted this is
based on conventional engine vehicles). The first year of the vehicle you
probably won't get your money's worth, but after that it becomes much more
valuable. At a traditional car dealership, a 15k mile service is pretty basic,
oil change and tire rotation, but they will try to upsell you on numerous
other items (special additives to improve engine life/gas mileage, air filter
change, wipers, etc...) that will easily hit $250-$300 for that visit. These
items can all be done in ~10 minutes at home for ~$50. For a 30k mile service,
you're looking at well over $400. To be able to take your car in, not have to
deal with the hassle of someone trying to hustle/upsell you, get everything on
the car done, road side service, and (hopefully) better service than you'd get
at a traditional car dealership? Doesn't seem to me like the price is way out
of line.

Not only that, but think about the last time you went to a dealership to buy a
car, remember when you went in the finance office to sign the paperwork? More
than likely the finance manager was trying to sell you a service contract from
a 3rd party that was more expensive and covered less items.

In the end though it's hard to judge the value of these things without having
the service contract in front of me, knowing you specific driving habits and
exactly what services the contract covers and what services it doesn't (if
any). Having said that, I would be highly surprised if 12% of Tesla pre-orders
get canceled because of the service contract (as mentioned in the article).

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Retric
That's less than 'standard' maintenance on my 28k Acura TSX. It was a real eye
opener to see a 1k bill for standard maintenance on a 2 year old car with 12k
miles on it.

~~~
clauretano
That does seem a bit high, especially when you consider that the TSX is what
Honda sells as the "Accord" outside of North America. It'd be interesting to
see if owners of said "Accord Euro" across the pond see similar maintenance
costs.

------
reneherse
Let's look at this from a branding perspective: Say in the next year you sell
X cars, built on a new technology about which there is some
conventional/popular consumer discomfort or doubt.

Is it worth spending 600X dollars of company money for your customers to be
able to say, "I just bought a Tesla and I don't have to worry about any
maintenance costs _at all_ for the next four years"? For ten thousand cars,
that would be six million dollars out of about 800 million in revenue, or
three quarters of a percent. Seems like that would be money well spent on
developing consumer confidence in the technology and customer loyalty for the
brand.

My prediction is that Tesla will change course on there current maintenance
program. It's much better PR to offer free maintenance for the first four
years, a la BMW, and then offer an extended "Tesla Care" warranty program that
continues the coverage, similar to Apple.

Because a true "concierge" level maintenance program wouldn't nickel and dime
the customer.

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austenallred
So let me get this straight, you bought an $80,000(ish) car with a full
warranty, and you're mad enough about a $600/year add-on in which the company
does slightly under $600 worth of work and picks your car up to do so that you
write a blog post about it?

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IanDrake
Tesla is not Ford. The numbers are completely different which necessitates a
subscription model or higher prices in general. Early adopters shouldn't be
surprised when their toys costs more, it's always been that way.

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aidenn0
Isn't it illegal to void the warranty on a car for work done, just because the
work is done at a third-party shop? I seem to recall this tactic being taken a
while bag and it being struck down.

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michaelbuddy
Looks like the service contract isn't necessary but you still need to bring it
to tesla mechanics for repairs / maintenance and annual inspection to keep the
warranty. If I have a warranty to keep my car free from problems, I'm going to
use it at the place that issued it. Otehrwise how would I get free warranted
repairs?

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squarecat
Let me get this straight, people considering the purchase of a vehicle that
_starts_ at US$57,400 are balking at a implicit service contract that runs
about 50% the cost of their annual Starbucks budget?

These must be the same people that complain about the cost of a 99 cent app
for their >=US$200 smartphone.

------
debacle
That's a very acceptable fee for such a high-tech piece of engineering. Most
warrantied commercial equipment has mandatory service contract requirements,
so it's no surprise that we're seeing that in the consumer arena as well.

~~~
gergles
No surprise, except for the whole 'illegal' bit.

15 USC 2302(c)

(c) No warrantor of a consumer product may condition his written or implied
warranty of such product on the consumer’s using, in connection with such
product, any article or service (other than article or service provided
without charge under the terms of the warranty) which is identified by brand,
trade or corporate name [... except that some exceptions can be granted if
they are in the public interest.]

~~~
debacle
This isn't about brand, trade, or corporate name. It is about the nature of
the service being performed and the fact that very few people are going to
have the ability to actually service these vehicles properly.

------
dur0nat0r
Rich people problems (sigh)

~~~
allsystemsgo
I would hardly call this "rich people problems". I know many who make roughly
60-80K a year, and I would certainly not call them rich, and they still
purchase cars with a sticker price of 50K.

Is it a wise decision to make such a purchase? No. Is it commonplace? Yes.

Also, it's an early adopter price. It'll decrease a bit with time. This is a
luxury car.

Also, this isn't Reddit. Contribute something of value to the conversation.

~~~
AJ007
You are describing the type of consumer who has a problem with a $600 a year
fee -- the ones who can't really afford the product or service in the first
place.

This is a wide spread business marketing issue. You have different classes of
consumers, and often the loudest complainers are the one who are on low level
or free versions. Do they complain loudly because they are the only ones who
have time to? May be its just their personality and why they don't have any
money? I don't know.

From a business owner standpoint it is pretty easy to see how irrational the
original article author's position is. However, it presents a dilemma between
choosing to pacify this type of customer vs just ignoring them. Each has its
share of downsides.

~~~
sravfeyn
With due respect, a 'high level' customer can buy just another car if he has
problem with it, he can afford to, while 'low level' customers have to speak
out loud because that is all what they have, it is a heavy and rare investment
for them.

The 'issue' is not morally acceptable. First of all there shouldn't be any
distinction between customers, it is the company's responsibility to offer the
best product, whoever the customer is. How can you be ignorant to a customer
who invests a big chunk of his earnings to buy your product.

~~~
RHSeeger
Offering what's best for the customer is a balancing act with what's best for
the company. If only 2% of your customers are likely to have issues with a
given item, it may not be worth raising the price 10% for everyone just to
appease those 2%. (disclaimer, I'm picking random numbers here, no relation to
the item in question)

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michaelbuddy
A driver of a roadster says when repairs are needed, they come get the car, so
it sounds like a way to pay for that service.

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rscale
Interesting. When I talked with a Tesla sales rep I was told that maintenance
is annual and would cost me $1 per mile from the dealership. She didn't
mention a $600/yr contract.

I'm cautiously skeptical of the 'no tire rotation at other shops' claim. They
seems not only like a flagrant violation of Magnuson-Moss, it also seems
pointlessly customer hostile. Is there confirmation that this is actually the
policy?

~~~
andyakb
Ive never purchased a new car, so could be thinking about this in the wrong
way, but isnt $1/mile way way more expensive than $600/yr? $1/mile seems crazy
expensive, so I must be understanding that wrong

~~~
wahnfrieden
Unless your dealership is hundreds of miles away...

