Tesla wants to bundle insurance and maintenance into car sales

by Mina Martin 27 Feb 2017

Tesla wants to bundle insurance and maintenance into car sales

In its fourth-quarter earnings call, American automaker Tesla revealed that the company has been quietly experimenting with a new model that bundles insurance and maintenance into the price of future vehicles.

“It takes into account not only the Autopilot safety features but also the maintenance cost of the car. It’s our vision in the future we could offer a single price for the car, maintenance, and insurance,” John McNeill, Tesla’s president of sales and services, said in a Business Insider report.

The industry has been concerned that along with developments in cars’ self-driving capabilities, insurance models could also potentially change. It is generally held that if self-driving cars reduce the risk of collisions, then risk premium should also be reduced, the report said.

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According to the National Highway Traffic Safety Administration, crash rates for Tesla dropped 40% since autopilot was first installed.

“If we find that the insurance providers are not matching the insurance proportionate to the risk of the car then if we need to we will in-source it,” Tesla CEO Elon Musk said on the earnings call. “But I think we’ll find that insurance providers do adjust the insurance cost proportionate to the risk of a Tesla.”

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