Tesla has just announced the release of its Extended Service Agreement (ESA), which is now available for purchase through the Tesla app. However, there are some significant caveats that buyers need to be aware of before investing in the service agreement.
To begin with, the ESA is only available for Tesla vehicles that are still covered by the basic warranty that comes with the purchase of the vehicle. While the basic warranty has varied in duration and mileage coverage over the years, it currently offers a four-year/50,000-mile warranty for most Tesla models.
The ESA is available for Tesla’s 2012-2020 Model S, 2015-2020 Model X, and all Model Y and Model 3 EVs. However, if the vehicle has exceeded 50,000 miles, it no longer qualifies for the ESA.
The cost and length of the ESA are the same for all models, offering a two-year/25,000-mile service agreement. The purchase price is $3,100 for the Model S, $3,500 for the Model X, $1,800 for the Model 3, and $2,000 for the Model Y. The Tesla app will display the remaining time and mileage available to purchase the ESA.
Tesla claims that the ESA covers the vehicle in the event of a “failure,” defined as the “complete failure or inability of any covered part to perform the function(s) for which it was designed due to defects in material or workmanship of any parts manufactured or supplied by Tesla that occur under normal use.”
However, the exclusions section of the ESA raises questions about its worthiness. The service agreement does not cover the battery or drive unit, corrosion, storage, freight charges, or any racing activities. Furthermore, several maintenance items and parts, such as brakes and tires, are not covered. The ESA also excludes diagnostics, wheel alignment, cleaning, suspension alignment, and battery testing.
The ESA requires a $100 deductible for each scheduled service, and Tesla has sole discretion to determine what qualifies as a failure. This leaves customers with no clear idea of what they’re paying for and whether the ESA is worth the investment.
While the ESA might seem like a good investment compared to the cost of replacing a battery, Tesla’s average annual maintenance cost is between $800 to $1,000. Furthermore, Tesla’s service network has a poor reputation, making a high-interest savings account a more practical alternative to investing in the ESA.
