- There were 120 Tesla Model Y electric vehicles listed at two major auction houses recently, and “the vast majority” have under 10,000 miles of range, according to a report from Reuters news service.
- The insurance companies that covered these vehicles decided that even if they were only a few miles away, these Teslas were not worth $50,000 or more so they would occasionally have to pay for repairs.
- The cost to repair cars has gone up as convenience has declined over the years, prompting discussion of a so-called Right to Repair Act, which would give owners more rights to repair things they buy.
The law of the right to remedy started to gain traction, giving customers more rights to improve on the products they bought. But just because you can fix something doesn’t mean it will be easy or affordable. Repairing your own car has become less common over the years, but at least a local mechanic can help. . . usually. When it comes to Tesla’s electric vehicles, several insurance companies have reportedly decided that even a low-mileage vehicle isn’t worth the hassle.
Owners of certain automotive brands know that expensive repairs come with the territory. But that doesn’t mean insurers want to play the game, and some of them are increasingly deciding to write off Tesla’s low-mileage electric vehicles because they’re too expensive to repair, according to a new report from Reuters.
Reuters looked at recent salvage auction listings and found that “the vast majority” of the 120 Model Y vehicles listed had less than 10,000 miles of range. While these EVs initially cost between $60,000 and $80,000, the high repair costs will render them unusable in the future, even if their odometer readings are low. A $61,000 2022 Model Y Long Range EV, for example, suffered a frontal collision and would have cost more than $50,000 to repair had the insurance company approved the repair. Reuters was unable to determine the type of incident that led to the damage in these cases, but noted that several well-known insurance brands, including State Farm, Geico, and Progressive, ruled that repairs were not made.
Insurance Bills Up To 30 Percent Higher
It’s not that people don’t pay to protect their Tesla. By the end of 2022, Nerdwallet reports that the average Tesla owner with a good driving history and good credit can expect to pay around $2040 a year for a Model Y and as much as $3044 for a Model X. The average cost to insure a Model 3 is nearly 30 percent. higher than the national average for auto insurance, says Nerdwallet.
Exactly how much it costs to repair the average Tesla after an incident compared to other vehicles, both electric and ICE models, is hard to quantify, but Tesla has long realized that insurance costs for its EVs fall short of the average cost. for industry. Tesla began offering its own insurance policies for customers in late 2019, promising to lower fees for Tesla drivers. Customers can definitely benefit from lower costs. As a story from Drive in 2021 pointed out, a Tesla service center quoted one Model 3 owner $16,000 to repair a leaking battery pack cooler after it was damaged by road debris. An independent mechanic can fix the problem for $700, and The Drive argues the story proves that Right to Repair is a critical issue for electric vehicles.
For its part, Tesla’s insurance side business is now helping the automaker lower future repair costs, according to company executives. “[Tesla insurance] also gave us good feedback on minimizing Tesla’s repair costs—for all Teslas around the world—because we obviously want to minimize the cost of repairing a Tesla in the event of a crash,” CEO Elon Musk said during a recent earnings call, according to Teslarati.” Previously, we actually didn’t have a good insight into it because another insurance company would cover the cost. And actually, the costs are in some cases exorbitant.”
Tesla is using its insurance arm to make changes in the way it designs its vehicles, Musk said on the call, according to Reuters. “It’s amazing how small the changes to the bumper design are [and] providing the parts needed for crash repairs has a big impact on repair costs,” he says. “Most accidents are actually minor — a broken fender or scraped side of the car.”