Model S

Tesla Revamps Prepaid Service Plan Pricing


Tesla has quietly modified its prepaid service contract program. Prices have been raised slightly, free wheel alignments are no longer included, and service contracts are non-transferable to a new owner.

Flying under the radar among last week’s Tesla Q4 recap and the announcement of the Model 3 reservation opening date was a change in the company’s pre-paid service plan. Previously, the unexpired portion of a pre-paid service contract could be transferred to a subsequent owner upon payment of a $100 fee.

Update Feb. 15, 2016: Tesla issues statement saying details were posted in error

The latest change in the pre-paid service agreement eliminates the transferability provision. From here on, Tesla will give the current owner a refund for any unused portion of the contract if the car exchanges hands before the service term expires. A new owner will have to purchase a new service contract if he or she chooses to do so.

Tesla has also juggled the prices of its pre-paid service plans. Under the old program, 4 years of pre-paid routine service cost $1,900 while the new price is $2,100. The price for an 8 year plan has also increased $200 to $4,000. Free wheel alignments are no longer included as part of Tesla’s routine factory service.

“Tesla has an affluent customer base, and these buyers rarely keep a car longer than 4 years or 50,000 miles,” says Karl Brauer, automotive industry analyst for Kelley Blue Book. “By eliminating the warranty transfer option Tesla has largely neutralized the benefits of its extended warranty coverage. It lets Tesla technically offer longer vehicle coverage while exposing the automaker to minimal real-world cost increases. Bottom line, if you can’t transfer the warranty, your options as a buyer are reduced.”

Tesla did not announce the changes. They were discovered recently by comparing previous versions of the Tesla Motors website with the version that appears online today, according to The Verge.

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