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Tesla's Huge Repair Costs Are Causing Problems for Consumers

» Posted November 15, 2017Resources | Share This Post

Car repairs are often expensive. For owners of new vehicles whose cars need repeated repairs, the California Lemon Law may provide some protection from financial loss.

Unfortunately, there are circumstances-- like after accidents – when repairs are inevitable. Auto insurance can cover the costs of repairs in accidents, but insurance prices are based on the risk to insurers of having to make a substantial payout. This means that if a car is very costly to fix, insurance policies will cost consumers more.

A recent article highlights the issue that Tesla owners could have with insurance costs and coverage as a result of the fact that Tesla vehicles are very expensive to fix when problems occur.

Tesla Repairs Are So Costly, They're Driving Up Insurance Rates

According to an article summarizing several recent news stories that highlight potential problems with Tesla vehicles, Teslas are very likely to be seriously damaged when auto accidents happen.  When damage occurs to Tesla vehicles, repair costs for the cars are often very high. The substantial costs associated with making repairs, the likelihood of major damage in collisions, and recent reports on reliability and quality problems with Tesla have driven up the costs of insuring Tesla's.

One auto insurer, AAA, noticed anomalies in claims data connected with Tesla vehicles. AAA then confirmed the patterns it had been noticing in its own data by referencing a study the Highway Loss Data Institute had conducted over a two year time period. Both the AAA data and the Highway Loss Data Institute showed that there were higher numbers of claims involving Tesla vehicles and the claims cost more. 

Because of the added costs and the increased likelihood of claims being made, AAA indicated it would be raising the costs of insuring Tesla vehicles. Premiums for insuring both the Model S and the Model X are expected to increase by around 30% in the wake of AAA's announcement.

Tesla owners will now need to contend with the higher insurance costs, especially as numerous other insurers are likely to follow the lead of AAA and raise premium costs as well. The elevated insurance costs could also create another problem for Tesla owners: a decrease in demand for the cars on the resale market, which will drive down the value of their Tesla vehicles. Demand for Tesla's is likely to fall as used car buyers see they'll face expensive insurance costs due to the high price tag of repairing a Tesla after a collision. Consumers may also have to contend with costly Tesla repairs even when accidents do not happen, if their vehicles turn out to have problems.

Tesla is just one of numerous cars that could be expensive to fix and that could impose a financial burden on owners.  If cars need repeated repairs because of problems, California's lemon law could help consumers to pursue a legal remedy to minimize or avoid substantial financial loss.


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Posted By: Norma Molina

BICKEL SANNIPOLI APC