Tesla Considers Adding Insurance and Maintenance - Disruption or Catch Up?

Tesla fan and owner sites are abuzz with speculation that Tesla, Inc. may bundle maintenance and insurance into the cost of its vehicles in the U.S. market. Like many things Tesla comes up with, there is some fact behind the out-loud thinking.

Teslarati's coverage is typical of the recent news, which stems from the Q4 financial call Tesla made recently. In the call, Tesla VP of Global Investor Relations Jeff Evanson, reportedly said, “We’re actually currently doing that. We’ve been doing it quietly, but in Asia in particular where we started this, now the majority of Tesla cars are sold with an insurance product that is customized to Tesla, that takes into account not only the Autopilot safety features but also the maintenance costs of the car. It’s our vision in the future that we’ll be able to offer a single price for the car, maintenance, and insurance in a really compelling offering for the consumer. And we’re currently doing that today.”

From this statement, Tesla fans have begun to refer the idea as Tesla "disrupting" the insurance industry. But is Tesla leading here or following? Cadillac has already rolled out a program that includes maintenance and insurance on its vehicles. Called Book By Cadillac, the new program removes all the hassles of car ownership. A Book by Cadillac customer pays Cadillac a set fee to drive a top-spec Cadillac model (of their choice). Everything from registration, insurance, and maintenance is included. Cadillac rolled out the program this month beginning in the New York City metro area.

While adding insurance in with the cost of a vehicle is novel, adding required maintenance is certainly not. Tesla is one of the few premium automakers that doesn't include routine maintenance in its vehicle pricing. This makes Tesla one of the most expensive automobiles to maintain. Even mainstream brands like Toyota offer included maintenance, in Toyota's case, for two years at no added cost, and customers can opt to purchase long-term maintenance plans at the time of purchase.

BMW had offered the longest included maintenance, with four full years of required service included in its price. The BMW i3 and i8 are presently the least expensive EVs to maintain because of this. Jaguar has one-upped BMW and all other luxury brands by offering five years of included maintenance on its current models.

It will be exciting to see if Tesla follows through on its suggestion that it could offer insurance and maintenance on its vehicles in the U.S. market. If Tesla does, it is hard to see how it's not a case of following the lead of more established brands.

Related Story: Myth busted - Electric vehicles cost more to maintain than gas cars do