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Community weekly poll: Are extended warranties worth it?
- 12/5/07 2:21 PM
Extended Warrantees
by MaxineKL - 12/5/07 6:25 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
I agree with the guy who said that it depends more on the item (nad who's using it) than the price. I just had to buy a new laptop because the extended warrantee I'd bought (which had just replaced the battery a month before) did not cover "accidents," and my problem was apparently due to a splash of coffee that had taken 3 weeks to do the damage. You can bet I bought the new, improved, accident-included extended warrantee on the new one. So $600 for the laptop and another $300 for three years of peace of mind. With a final price tag for everything, including taxes, of just over $1,000 ($300 less than the broken computer cost 2+ years ago, before taxes and less-inclusive warrantee), it feels like a good investment. With laptops, though, I'll only buy an extended warrantee that includes batteries. That way, you recoup much of the original price of the warrantee, anyway.
BTW, Consumer Reports has an article arguing against extended warrantees, reasoning that you can extend the manufacturer's warrantee with your credit card. Well, a) credit card warrantees , in my experience, don't cover either accidental damage or consumables like batteries, and b) I was told you have to get an insurance company adjuster to adjudicate your claim--way more hassle than dealing with the store technicians who are familiar with the product.
It depends on the price of the item.
by thewindowace - 12/5/07 6:26 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
It depends on the product itself I have paid for extended warranty on a 42 in tv 8 years ago never used it. 8 years ago big tv's were not always reliable. I recently paid for extended warranty on a refrig. In the first year i ended up using it so it paid for itself. I almost always do not buy extended warranties. I do my undercover work on a product I want to buy and buy one from a company known to make good tv radio etc. Some brands are more reliable than others. If a product was not made well a store would not offer a extended warranty they make them money. Now if you have the money to spend and it gives you peace of mind go ahead a buy one. How would you feel if the store you got the warranty from went out of business. The refrig. I bought had a known issue with the ice maker,I knew this so I bought the extended warranty from a store that has been in business a very long time. If you buy a thing that is cheaply made and you buy it from a store that has been around for a long time than go ahead and get the extended warranty. It might prove to be more than peace of mind protection
Sometimes yes, sometimes no.
by Matthias99 - 12/5/07 6:30 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
From a pure financial perspective, it's better to never buy them as long as you can afford to replace the item if it breaks. As others have said, bank the money instead and on average you'll come out ahead even if you occasionally have to buy a replacement. If you don't then the people setting the warranty rates are not doing their job.
The only items I would consistently recommend buying an extended/enhanced warranty on (by "enhanced" I mean one that covers accidental damage as well as defects) are fragile portable electronics that get carted all over the place and thus have a high likelyhood of being damaged: laptop computers, digital cameras, expensive PDAs/cellphones. I've seen too many people drop expensive electronics, or spill some kind of liquid all over a laptop. A high-end MP3 player that is hard-drive based would be another potential candidate, but they generally don't cost that much to begin with. If you're a real klutz it may be worth it for anything portable. Replacement/loss coverage for cellphones (~$5/month, then you only pay $50 or so instead of $400-500+ if you need a new one) can be worth it if you tend to lose or break them and you want an expensive high-end phone. However, be sure to check what the warranty actually covers -- for instance, batteries are almost never covered for more than a few months no matter what warranty you buy.
For big-ticket items like an HDTV/high-end computer monitor, fridge, washer/dryer... I think you'd generally be better off just spending a little more in the first place and getting a model that is more reliable and/or comes with a longer manufacturer's warranty to begin with.
I would generally advise *not* getting an extended warranty on a desktop computer or low-end peripherals like an inkjet printer. If it breaks three years down the line you'll be able to buy a comparable replacement for about what the extended warranty would probably have cost you.
Another factor is peace of mind. If you'll sleep better at night knowing your new $3000 plasma TV will be replaced no matter what for five years, a $500 warranty may be worth it even if it doesn't truly make economic sense.
Extended Warranties from the Inside
by moondoggy - 12/5/07 6:34 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
As an electronics repair tech with over 20 years of experience you need to look at "Extended Warranties" on an individual basis. I can tell you that most products will last beyond the industry standard of 90days/1yr. Would I buy an extended warranty for say a boom box or something similar in price (under $200.00) No ! Say an LCD monitor, again NO. Before moving on here is some "inside" help when dealing with a failed product. If you have a product that is not ridiculously out of warranty and they seem to balk at repairing (manufacturer) ask to speak to a supervisor. More times than not they would rather have a satisfied customer than an unhappy one. And if they do not repair/replace they should and most of the time will give a deep discount.
Now on high end tickets. Lets say Plasma HDTV's. Most definately. The cost of a replacement screen is at least half the cost of the whole set. (excluding labor)
But do not just turn your back to extended warranties as some will be of benefit and some will expire before you will use them.
NOTE: Be careful of "sales" people who seem to know a few "buzz" words that might impress an uninformed buyer. Take your time and do a little research before making a decision to buy that HDTV. Make sure you can "try-it" a few days in your own environment and if you don't like it they will take it back. The ambient light in a "Best Buy" or Circuit City or is poor at best. They can not come close to your own viewing environment.
Been on BOTH ends
by snaredrum - 12/5/07 6:35 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
Yes they're worth it. They're still a bit of a ripoff, but still worth it.
Yeah, I know. Personally, I've never had warranty expire just before something went wrong. Warranties are just insurance. Think of the things you already have insurance for... cars (but I've never been in an accident), homes (still standing after many years), health (maybe a little flab around the middle!). BUT... if something goes wrong, the premiums suddenly seem insignificant.
As a former electronics salesman, I mean "associate", we were CONSTANTLY pressured by all levels of management to push the warranties. The reason is simple: they make the company (as well as the vendors and manufacturers) money! We were offered spiffs and bonuses based on the number of warranties that we sold. If we didn't offer it, we got in trouble. Of course, the customer would ask (I hope!) if it was really worth it... I'd tell them my TRUE story...
I bought a superduper Sony amp/receiver/VCR a few years ago, and my associate offered the warranty. Since I had just laid out 500 fat ones, the extra cost of a 3 year warrnty I just considered an investment protection, yeah, like insurance in case something went wrong. About a year later, the VCR part of the Sony quit. Warranty fixed everything... parts, labor, shipping. The next year, the whole thing died when a couple of speaker wires touched wreaking much havoc inside. Warranty fixed everything. Cost of the warranty? $120. Total cost of both repairs? $160 for the first, and over $300 for the second one. At the time I wasn't making a lot of cash, and my Sony was my baby, pride, and joy. I could NEVER have afforded either repair, and definitely couldn't buy another one. I still have the Sony and it's working fine.
Today, each purchase that offers a warranty, I might buy it, or I might not. I look at the cost of the item, knowing that all electronics are uber-expensive to repair, and decide. General rule is: the more parts there are to fix, and the more expensive the item, the greater chance I'm dropping cash on the warranty. I take it on a case-by-case basis ("what would it cost to fix this sucker?").
Just bought a $700 dSLR camera. They don't break often, it has lots of parts, it's expensive. This time, I flipped a coin. Heads. Three year warranty. Same for the new $2000 laptop. Just like insurance, I hope I never have to use it.
Are extended warranties worth it?
by wm1837 - 12/5/07 6:41 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
In my experience, no way. I bought a powered sub-woofer from Best Buy as well as the extended warranty. I didn't realize that the 3 year extended warranty ran concurrent with the manufacturers warranty and so, the speaker was warranted for a total of three years and not the four years I had thought. None of this would have mattered if the item had not needed service but it did and what a nightmare. I was without anything for several months while Best Buy was unable to repair it and had to send it back to the manufacturer.
This is only one incident but there were more. I have finally found a solution that works for me. Instead of buying the warranty, I have a small savings account. I take the amount of money the extended warranty would have cost and put it into the savings account. I do the same for every item that I would consider buying an extended warranty for. Then if I need to pay for repairs, I have a little slush fund to help pay for the repairs. I am money ahead so far and even if I weren't, I would still feel good about not taking the gamble. If the item is a high dollar item, such as a car or possibly a high dollar TV, I do buy the warranties, but if it is under $500. no way.
That's another hidden fact
by lobo65 - 12/6/07 2:24 PM In reply to: Are extended warranties worth it? by wm1837Store warranties will often run concurrently with the manufacturer's--Making that purchase an expensive overkill. The average person won't know it either unless they do some research first.
Depends on what is offered and what it costs.
by msecour - 12/5/07 6:42 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
As a rule I never buy extended warranties. I wish I had, though for my first laptop - and HP that had a display fail two months out of warranty. I replaced it recently with a Dell purchased at Costco but did not buy an extended warranty because Costco sold it with a two year warranty, extended to 3 years by using my AMEX card.
I think for especially pricey items that must be repaired in the home I would consider it, but for the most part I've found that when things fail they fail under the original warranty.
A smart consumer should choose to be self-insured
by infosky - 12/5/07 6:50 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
If you shop carefully and you are a careful user, you should, in average, have better odds to have your purchased goods last longer time than those who don't.
If you then purchase the extended warranties, you pay for those who are not as smart and careful. Beside, the companies who sell insurance have their expenses and profits. You are definitely worse off if you are a smart shopper and a careful user.
I had decided to be self-insured, meaning I will pay when the unit goes bad (not their units go bad). And, so far, my theory has worked well for myself.
Extended warranty. Heck no.
by Quemannn - 12/5/07 7:00 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
There's a word: lifetime warranty. What is lifetime? Considering normal wear and tear, lifetime is supposed to mean "while the product is still usable." A new generation of products is in the pipeline. The next thing you know, before the product's lifetime ends, there comes a new one, much cheaper with more selling features. You can't resist this new generation.
Years ago, I dumped my cellphone into a hot coffee cup by error, and called the carrier to get a new phone 'cause I had handset insurance coverage. But the carrier offered me the same model phone as I had just dumped. Eventually I decided to buy a new model rather than the same one I dropped into the coffee cup.
Are extended warranties worth it
by stumacp - 12/5/07 7:02 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
They are sometimes worth it if the price is right vs the price of the item, and the value of having it working! We paid about $200 for a 2 year extension of the warranty on a $3000 hdtv - when such things were a mystery in terms of reliability. On the other hand, to pay even say $10 for protection on an item costing $39 is a bit silly. Especially if the thing is easy to replace, and will likely be outmoded in a year anyway!
not usually worth it.
by tdisedanman - 12/5/07 7:03 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
Consumer electronics have become so inexpensive that I feel it is not worth purchasing them. Unless you are buying the top of the line, highets priced unit, you may want to forget the extended warranty.
Appliances are another thing. I purchased all new kitchen and washer drier frigidaire appliances. I bouth the extended warranty for my front loader washer and my Frigidaire refrigerator. The fridge has had about 6 service calls over a few years all for ice maker failuers. So, the warranty paid for itself. When the warranty expires and the frdige has a problem, I'll purchase another but not a Frididaire.I am happy to report that I saved my money by now purchasing the warranties on the stove, dish washer, microwave or drier.
BTW. My brother in law also purchased all the same brand appliances I did but the next higher series. His Fridge has had the compressor fail twice under extended warranty. problem is, it to one week for them to order a new compressor through the retailers service contract. They would not loan him a fridge and he was without for one week.Pretty poor service.
Rarely, but makes sense in a few cases
by seb33sf - 12/5/07 7:19 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
I very rarely purchase extended warranties. I have read that profit margins on these can be up to 80% and that they are simply not worth it in most cases.
A couple points against extended warranties: First of all, ask yourself whether you would come out ahead if you bought an extended warranty on every electronics purchase. If the answer is no, then they probably only make sense as an insurance policy on big ticket items (such as the big screen TVs and pricey laptops a lot of posters mentioned).
Secondly (and along the same lines), ask yourself what the value of your purchase will be after a year or two. Salespeople like to describe extended warranties as "protecting your investment", but this is NOT your 401K we are talking about here. Consumer electronics depreciate very rapidly due to rapid advancements in technology. Replacing your 8MP digital camera after a couple years will not cost the $200 you are spending today (particularly if you consider a refurb). Granted, extended warranties cover multiple incidents, but it seems that this scenario should be rare for higher-quality brands.
Also, a few people mentioned that you can purchase an extended warranty from Mack or another third party. I hadn't thought of this, but that's a great point - you don't have to buy the warranty from the store selling the product, so shop around! Along these lines, check your credit card since some of them offer warranty protection (probably more limited than an extended warranty, but still worth looking into).
Finally, if you are ANYTHING like me, bear in mind you will probably misplace all the paperwork after a few short weeks, in which case it is definitely NOT worth it! Oh well... 
extended waraty is rarely worth it
by jef46f - 12/5/07 7:35 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
Todays electronics usually fail in the first 120 days of being put in service, after that period they seem to last about 3-4 years till failures start happening; so if most products have a 1 yr warranty you should be beyond the initial failure point, and any extension will likely not pay off because it will expire before the normal life of the product. at that point it would in all likelyhood be obsolute anyway.
Depends on the item
by carmazon - 12/5/07 7:39 PM In reply to: Are extended warranties worth it? by Lee Koo (ADMIN)
One of the rare advantages of growing old is occasionally experience is actually a good basis for decision making. On most appliances, I do not buy extended warranties. They tend to be expensive, and I generally have had very positive experiences with most appliances. The rare time every ten years I get burnt the cost of repair or replacement is less than the cost of purchasing an extended warranty on every item.
On the other hand, I tend to buy laptops and all-in-one computer units, and experience has taught me that for those items the likeliness of problems is much higher and experience suggests extended warranties are a more worthwhile expenditure.
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