Tesla Does Away With Extended Service Agreement Transfers

Update: As Carl Raymond S just posted on CleanTechnica, this change has been changed back and Tesla has called it an error: “There was an erroneous posting, then a retraction, according to this story. Looks like somebody dropped the ball (either that, or it’s a quick reaction to the complaints line running hot): http://www.theverge.com/2016/2/15/11007606/tesla-extended-warranty-transfer-update“

Tesla owners will no longer be able to purchase transferable extended service agreements, going by recent owner reports. Extended service agreements will of course still be available for purchase, but the option of easily transferring these new agreements to others in the case of selling the Tesla to others is no longer there.

To be clear here, those that have already purchased an extended service agreement that allows for transfer will still be able to — it’s simply that new agreements won’t allow for that option. This move means that there will likely be far fewer owners selling their used Teslas themselves, and that the company’s CTO (certified pre-owned) program will likely experience a fair bit of a boost.

This change was brought to my attention originally through a discussion topic started on the Tesla Motors Club forum “tbone586” — who commented:

Based on revised language just posted on Tesla’s website, it appears that the Extended Service Agreement (extended warranty) is no longer transferable 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?

The situation was clarified a bit through various responses from others, including this one from “mikeash”:

I’m not clear on this, can I get a refund for the balance if I sell the car, or not? It says “you can request a cancellation and reimbursement” if I sell the car, but it doesn’t say under what conditions they’ll grant such a request!

This is annoying but not catastrophic if they’ll guarantee you can get a refund, but completely ridiculous otherwise. And either way, it’s just stupid. Who cares who owns the car? It costs Tesla the same amount of money to perform warranty repairs whether it’s for the person who bought the extended warranty or a new owner. What’s the motivation here?

And by “omarsultan” who noted:

Two things:
1) Extended warranty and extended service plans are not interchangeable terms. A warranty carries a lot of explicit and implied consumer protections, while a service plan can be very proscriptive on what it covers/excludes.
2) The changes to the ESA policy are not retroactive, so if you have an older ESA, its still transferable. I emailed ServiceHelpNA and this was their response:
“Whatever your documents say that you signed when you purchased the vehicle and ESA, will still be what Tesla honors. Moving forward, and net ESA will not be transferable.”

To me, this all seems completely reasonable, and rather expected. Though I can understand why someone who bought a Tesla with the expectation of later selling it themselves, there are of course options available (the CPO program, keeping the car longer, etc).