Can You Get A Warranty For A Used Tesla? What About A Nissan Leaf? Let’s Get Some Answers!
Tesla delivered nearly 500,000 new electric cars last year. In 2019, it delivered over 367,000 cars. 2018, too, saw six-figure electric car sales. And Tesla is just one brand! Nissan has sold hundreds of thousands of LEAFs, Kia has sold thousands of Souls, etc., etc., ad nauseam. While those numbers are relatively small potatoes compared to a 15-million unit American ICE car market, they’re certainly not nothing, and those hundreds of thousands of electric cars are being traded in, coming off lease, and — one way or another — starting to enter the used car market in a big way, and the people shopping for used EVs have
just as many even more questions about electric cars than some new EV buyers! That’s why I was excited to chat with Brent Seavey, who is probably the person best suited in the business to talk used Teslas.
Used Electric Cars Raise Questions
Full disclosure: Brent and I go back several years — we even worked together at a Nissan store for a very brief period — and I have always known him to be a stand-up guy. Still, that’s not what makes him especially qualified to talk used EVs. What does make him qualified is the fact that he was a Tesla Pre-Owned Vehicle Salesperson … and not just any Tesla Pre-Owned Vehicle Salesperson, but the very first one, hired in 2015! “It was quite an adventure,” Brent explained over a Zoom call. “We were literally in a garage in Highland Park (a suburb of Chicago). I remember I had a black Tesla Model S Founders Series VIN 000007 and a bright yellow Tesla Roadster parked next to my desk. I was handed a list of a couple hundred names of people who were interested in buying a used Tesla, and just started dialing!”
You have to remember the context there. At the time, Tesla didn’t have real “used car program.” There was no button on the website, no listings anywhere, so a lot of people were surprised to hear from Brent at all. “These were literally the first people to be able to buy a used Tesla,” he says. “They were excited to hear from us. I had a few hundred cars we had taken as trade-ins, and customers were literally snapping up whatever I could find for them. It was a lot of fun and very rewarding. One of the reasons I really enjoyed the position was that I got to help people get into a Tesla that ordinarily couldn’t buy one … most of my clients were aspirational buyers that finally were realizing their dream of owning an electric rocket.”
So, okay, having been there on day one and after training most of the salespeople that came after him, Brent knows about the used Tesla market. More recently, however, he’s become an arguably larger part of the used EV market through XCare, which is an aftermarket warranty and finance company that specializes specifically in electric vehicles. “People who buy a used electric car have a lot of the same concerns as people who buy a conventional used car,” explains Brent. “Everything from ‘What do I do if my car breaks down on the side of the road?’ to ‘What if my power windows stop working?’ comes up. And, at the time, Tesla did not, and still does not, offer an extended warranty for vehicles not purchased directly from Tesla. So, if you bought a used Tesla, you just had to roll the dice and cross your fingers! That was very different to the ICE market, where there were plenty of companies that would offer you decent coverage for your car, but for a Tesla? You were on your own, in a way, and that really informed the move into XCare.”
How are Warranties Important for EV Adoption?
Now, I don’t want to turn this article into a commercial for XCare, but I want to explain what it is and why it’s different from the auto-dialers and mouth-breathing telemarketers spamming our phones with warranty offers. Warranty coverage is an important factor in many people’s used car buying decisions. (Just look at the rise of “certified” used vehicle programs in the last decade, if you doubt that.) That’s especially true when you consider that some dealers might use the lack of available warranties as a tool to steer people away from an electric car. You can see it now, right? “Mrs. Customer, I know you’re comparing our Certified Pre-owned Mercedes GL550 to the Tesla Model X you saw at the other dealer, but did you know you can’t even get an extended warranty on that car? That’s because the warranty companies don’t know how well they’ll hold up. They’re too new. We can cover this V8 Mercedes for another 100,000 miles and it won’t even cost that much more. Why don’t you sit down and we can see what that payment looks like so you can make a fully educated decision?” I think most people who are still on the fence about EVs would pause here, right?
Of course I’m right. That’s why it’s important to understand what’s going on here, and why I asked Brent to write his pitch for XCare as it pertains to Tesla. “First off, anyone can buy an extended warranty for their Tesla, provided you are the current owner,” he writes. “That’s whether you’re within factory warranty or not, the first owner or fifth owner, and high miles are okay too. On a side note, Model 3 and Model Y do not offer any factory warranty extension from Tesla if you want to cover your 3 or Y past 4 years and/or 50,000 miles, but XCare will cover those past the factory warranty as well. Most importantly, the XCare program was designed to work with Tesla Service. That’s an important distinction from traditional warranty companies that can have an ‘adversarial’ relationship with service departments, requiring an inspection prior to service being completed, then negotiating on costs or on which repairs they will authorize. Tesla’s service experience is different, because they aren’t set up to incentivize service advisors to make sales. That means that we can be different, and offer a better experience, too.”
Keep in mind, Brent is all-in on Tesla. If I had to guess, I’d say he’s a Teslanaire by now — or close to it — so his focus is always going to be on Tesla in any car-based conversation. I get that, but I’m interested in lots of different EVs, so I asked Brent about XCare and how they would handle a Volvo XC40, for example. “We would cover that,” he says. “But only the Recharge. Not the hybrid. XCare is all about pure electrics.”
Good to know, but what about pricing? “There are different prices for different levels of coverage, obviously,” he explains. “100,000 miles of coverage would be different than 50,000, for example, but there’s always a strong value proposition there. Just look at all the autonomous driving sensors on these cars or the infotainment screens and digital dashboards. Replacing those can be thousands of dollars, but XCare can cover those repairs with either no money out of pocket or just a small deductible. One thing I’m really excited about is that we’re developing a program to refinance vehicle loans and incorporate the coverage into the new loan. With current low rates, our partner lenders may actually be able to wrap a warranty into a new loan and, sometimes, lower the overall monthly payment. That’s a huge benefit for aspirational buyers who might be stretching to get into a Model S or a Model X in the first place.”
Always back to the Teslas. Which, I worked a Volvo into this story, so fair play there to Mr. Seavey, right?
So, to answer the initial question posed by this article’s headline: Can You Get a Warranty For a Used Tesla? Yes. What About a Leaf? Yes, again. And I, for one, think that being able to say “Yes!” to those questions is going to play a big part in getting mainstream used car buyers to choose EVs, and that’s arguably more important than the new car market. I mean, the new car market in the US is about 15 million vehicles … but the used car market is usually about 3× bigger! That’s where EVs need to thrive.
That’s my $0.02 anyway — what’s yours? Do you agree that EV warranties are becoming more and more important as EVs reach their second and third owners, or do you think EV buyers will steer away from warranties the same way they’re steering away from the old dealer franchise models? Scroll on down to the comments and let us know.