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There were more than 120 Tesla Model Ys on salvage sites last month, the majority with fewer than 10,000 miles, but there’s a pretty big caveat
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–> by Sebastien Bell
February 4, 2023 at 17:19
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by Sebastien Bell
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It doesn’t take an expert to notice that modern vehicles are becoming more and more expensive to repair. Tesla’s vehicles, however, are becoming so expensive to fix that insurers are choosing to total them even with low mileage.
Insurers make decisions on whether or not to repair vehicles based on how expensive those repairs are. If the value of the repair gets too close to the cost of the vehicle, they will simply choose to replace the vehicle for the policyholder, and sell the vehicle as-is through auction houses like IAA and Copart.
Reuters reports, though, that the number of low mileage Tesla Model Ys is staggeringly high on those auction sites. Of the more than 120 examples it found listed on those sites in December 2012 and early January 2023, the vast majority had fewer than 10,000 miles (16,093 km) on the odometer.
Read: Tesla Accused Of Disabling Features On Salvaged Model Without Telling Owner
All things being equal, the fewer miles a vehicle has, the more it’s worth, which is why it’s surprising to see so many Teslas that have traveled fewer miles than the average American motorist drives in a year being considered “totaled” after collisions of varying severity.
Although the auction sites don’t list the full extent of the damage to the vehicles they list, the retail values of the vehicles listed ranged from $60,000 to $80,000. That may help to explain why these vehicles are becoming expensive to insure in the first place. Nerdwallet reports that Model 3 drivers pay 30 percent more than the national average to insure their car.
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During a call with media relating to Tesla’s fourth-quarter earnings, CEO Elon Musk described the premiums being charged by third-party insurance companies as “unreasonably high” in some cases.
Tesla offers its customers its own insurance, giving Musk added incentive to refer to other insurers as unreasonable, but he added that the company is working to make the cost of repairing its vehicles lower, suggesting that the high prices aren’t entirely related to their electric powertrains.
“It’s remarkable how small changes in the design of the bumper [and] providing spare parts needed for collision repair have an enormous effect on the repair cost,” Musk said. “Most accidents are actually small – a broken fender or scratched side of the car.”
While that likely won’t come as a surprise to other automakers, customers may find it encouraging to discover that Teslas may soon be designed for the real world. Meanwhile, those looking for a cheap EV and who are willing to put in some elbow grease may find that the Copart and IAA are goldmines, though they may encounter more problems beyond simply repairing the physical damage.
