Home audio & video: Extended Warranty.........are they worth it????
Extended Warranties are Sometimes a Necessary Evil
by Rick Gill - 12/5/07 7:54 PM In reply to: Extended Warranty.........are they worth it???? by jraggieI'm quite comfortable opening up my desktop tower, attaching an anti-static strap and removing/installing components, etc. However, this was not the case with a tightly-constructed laptop, with which I had no previous home-repair/upgrading experience. When I decided to buy my HP Pavilion dv9000 laptop last year during the annual "Boxing Week" sales, I decided that I wanted expert help/replacement guarantees available to me beyond the basic manufacturer's warranty.
When I purchased my laptop, I expected that I would be taking it with me on the road, etc, which would subject the PC to more than the usual wear-and-tear that a desktop would have to deal with over its projected lifespan. I waited for laptops with dual-core processors (would handle upgrade to Windows Vista) to become affordable and the norm in the retail market. I do not expect to be replacing my laptop any sooner than three-four years, so a manufacturer's warranty, plus a three-year extended warranty seemed to fit the bill in my case. My laptop is almost one year old at this point, and no problems to date. (cross my fingers; my car unexpectedly cost me enough this month.)
That's my $0.02 worth on this issue. Comments, anyone?
Best Regards,
Rick Gill
Kingston ON Canada
Are you a gambler?
by captras - 12/5/07 7:56 PM In reply to: Extended Warranty.........are they worth it???? by jraggieExtended warranties are like playing the tables at Vegas. The house DEFINITELY has the odds. Think of it this way....Retailers will try to tell you how many things can go wrong, and how much it will cost. So, why, then, can you get an extended warranty on a $3,000 TV for less than $500. The house is betting that they will keep ALL of your money, or, at worst, only spend a fraction of it. Consider this...less than 20% of extended warranties pay off, because either 1) it fails while under the manufacturers warranty, or 2) it nevers fails at all during the warranty period. I have been guilty of wasting my money on these things, but looking back, if I had saved all the money that I spent on extended warranties, I could buy most of the products that they were assigned to, all over again!
Extended Warranties are Rarely Worth it
by purposed - 12/5/07 7:56 PM In reply to: Extended Warranty.........are they worth it???? by jraggieI purchased a few of these when young, but after a couple of lessons learned years ago at the desks of the "Our Warranty Does Not Cover that Item" managers, I have not since purchased any, and find it easy to cut off the salesperson with a firm "no!" in the middle of their dissembling close, which you described so well.
Extended Warranty....Worth it? Maybe
by Barker C - 12/5/07 7:57 PM In reply to: Extended Warranty.........are they worth it???? by jraggieI rarely purchase this offering unless the product price is more than $1000 and the cost to repair would li8kely be more than half. That said, I did purchase an extended warranty from HP on a notebook computer. Within 30 days of the expiration of the etended waranty, the notebook started having problems. I sent it back and they had to replace both the heat sink and motherboard! Whew, the cost of the $257 extended warranty started looking pretty good compared with replacing the notebook for around $3000.
One caveat to consider, the term "extended warranty" is misleading, at least with the HP definition. For expample, if you purchase an "extended" warranty for 3 years, the notebook is not insured for 4 years (one year that comes with the purchase plus three, equaling four years). It is, in fact, only covered for the three year "extended warranty period."
NO, but sometimes yes
by soupnazzi - 12/5/07 7:58 PM In reply to: Extended Warranty.........are they worth it???? by jraggieI'd say no for the most part.
I've had an extended warranty once that didn't cover my broken remote control for my TV.
I've heard other stories from friends about having a warranty that covers everything except what is broken.
However when I sold my TV a couple of years ago, It still had another years worth of warranty left which helped me to get a better resale price.
There is always the Murhy's Law thing too. If you buy a warranty, chances are you won't you won't need it. If you don't get the warranty, you're doomed.
Who is this Murphy anyway?
No says Consumer Reports
by bobfox321 - 12/5/07 8:00 PM In reply to: Extended Warranty.........are they worth it???? by jraggieFor the retailers it represents a huge profit margin with nice commissions for the sales person. Remember they are competing on prices so the margins are not huge. Throw in the extended warranty and you made the retailer and sales person happy. They seldom have to pay out because electronic products seldom break in the 2-3 year extension they are trying to sell you. Also consider that the cost of any repair during that 2-3 year period is about the same as the extended cost. Bottom line, DO NOT OPT TO BE RIPPED OFF.
extended warranties are like insuranc -- buy and hope
by mrmac - 12/5/07 8:05 PM In reply to: Extended Warranty.........are they worth it???? by jraggieI normally only buy extended warranties on more expensive items or irtems that are more likely to need repairs. I had an extended warranty on my RV that I collected way more in benefits than payments, same as my dental insurance. On my last laptop the extended warranty has taken care of two repairs including a replacement motherboard plus a replacement battery (the battery alone was about equal to the cost of the warranty!) At the same time I have not collected on my life insurance since I haven't died yet. But that doesn't meant it was a rig off. At the same time, when I bought a digital coamera on sale for $99 I didn't buy a warranty because after the manufacture's one year, I would probably raather replace it.
Don't forget the "KFactor" What? ... K=Klutz Read on .
by wahmof2boys - 12/5/07 8:07 PM In reply to: Extended Warranty.........are they worth it???? by jraggieOther replies seem to be giving super technical advice. Now let's try to get personal.
To begin, we have to keep in mind that the companies who sell the extended warranties are doing so to make money. So they are charging prices such that, on balance, more dollars come in with the prices than go out with the warranty coverage. That's pretty easy to understand.
Next, let's make an analogy with health insurance. If you are sick, you are more likely to pay higher premiums for a very high level of health coverage. Why? Because you know you will use the insurance.
With extended warranties, some of us are simply more likely to use them than others. In my life, I am a certified Klutz. I twist in a new light bulb, and the bulb breaks. I put together an Ikea cabinet, and my wife's favorite vase breaks when the shelf falls off. Those are examples of the "KFactor".
The "KFactor" becomes even more apparent when I am dealing with mechanical stuff like digital cameras, PCs, cell phones, etc.
So, how does this apply to extended warranties???? Because of my inherent "KFactor," I always buy the extended warranty. And I usually win more times than I lose.
So please read the other comments about what to look for in the fine print etc. But if you , like me, are "KFactor-man," buy them.
Mike
Extended Warrranties
by ECReiff2 - 12/5/07 8:09 PM In reply to: Extended Warranty.........are they worth it???? by jraggieMy experience with extended warranties is mostly related to automobiles. If a manufacturer puts a warranty of 100,000 miles on a vehicle, they do not expect to have a problem during this period. If a manufacturer puts a warranty of only 30,000 miles on a vehicle, the reason behind it is they will lose their shirt paying for expensive repairs that likely will begin to occur after the 30,000 miles. No manufacturer can afford to absorb the charges associated with the high cost of service today and stay in business.
I don't believe that Consumers Report has ever suggested an extended warranty on any kind of purchase.
Most often they are not worth it
by JohnSP - 12/5/07 8:11 PM In reply to: Extended Warranty.........are they worth it???? by jraggieWhen I bought my lcd tv I paid $3700 for it, they wanted $800 for a warranty. I told the guy "you want over 20% of the tv cost for a warranty?".... of course he gives you the lines about "what are you going to do it breaks?" and tries to pressure you into the warranty because thats where they make their money. Thats a rip off, glad I didn't take it, heck I could buy a new LCD tv today for that $800. Plus the odds of a tv going bad within 2 or 3 years is extremely low, and you are automatically covered the first year regardless. It probably depends on what you are buying but in this case there is no way anyone should pay that for a warranty.
PRICE - PRICE - PRICE
by LionsMike - 12/5/07 8:12 PM In reply to: Extended Warranty.........are they worth it???? by jraggieI bought a fax machine at staples it was a unit with a price tag of $80.00. The 1 year extended warranty (after the manufacturers free full first year) was $5.00. I bought that warranty
I bought a home entertainment center (DVD with dolby 5.1 and 6 speakers) for $289.00. The 3 year extended warranty (after the manufacturers free full first year)was $39.00 I bought that warranty.
When the 4th year was almost up I was offered an additional 3 years extension on that warranty for just $633.00. WATCH OUT In the last 4 years DVD prices have fallen. Why would anyone pay $633.00 to insure an already 4 year old unit that they could probably buy brand new today for about $211.00
Extended warranties are an item that really requires a little bit of intelegence and a lot of will power.
Most appliances fail naturally in the first year and are covered free by the manufacturers warranty. The appliance manufacturers plan on bringing in three times the revenue in warranties than they would bring in from service charges, even at the $92.00 per hour charges. with so many warranties out there, it is to their advantage to manufacture a highly reliable unit which will not require service. Odds are in your favor that your device will not break down in the first few years after the original warrant expires.
If you have a hostile environment that is likely to cause unnatural damage to your devices, it might be worth purchasing a warranty WHICH WILL COVER DAMAGE DUE TO ABUSE. READ THE FINE PRINT.
Shop carefully and read the fine print. I recall a case where a friend bought a car and paid nearly $4,000 for an extended warranty. A few months after purchasing the car it was involved in a minor fender bender $560.00 for a little body work and paint. There was a $500.00 deductable so her insurance saved her $60.00. The claim for that accident was evidence that the car had been in an accident and the $4,000.00 warranty which was already paid for was void. READ THE FINE PRINT
Extended Warranty
by dnadoug - 12/5/07 8:13 PM In reply to: Extended Warranty.........are they worth it???? by jraggieI worked for one of the major national electronic stores several years ago. They had an in house extended warranty that all salespeople and cashiers were supposed to push. I worked there only temporarily and not full time. One day I came in and they told me the manager was being demoted and I asked why. And they told me that he had not met his Extended Warranty quota that the company imposed. The (my manager) said that the company earned 95 cents on the dollar for the warranties sold and that sometimes they made more on the warranty sale then the profit on the product. The reason is that most people do not find it necessary to use the warranty. If the products were that bad no one would buy them.
May be
by pcm888usa - 12/5/07 8:15 PM In reply to: Extended Warranty.........are they worth it???? by jraggieBought an extended warranty when purchased a Mercedes. Stupid move? NOT! Glad I did it. Things started to fall apart after the 4 years warranty was up. It could have cost me triple the extended warranty amount to pay for them.
As a rule, I do not buy extended warranty. I think if you buy that for every thing you purchased, you will be the loser overall. The MBZ story was just a fluke.
Are Warranties Worth It?
by Mike LaPlante - 12/5/07 8:16 PM In reply to: Extended Warranty.........are they worth it???? by jraggieTo say that something will break a couple of days after the warranty runs out is exactly the opposite of what happened to me with my G5 iMac. 3 days before my warranty ran out, the built-in video card crapped out. They ended up replacing the whole motherboard. I was so thankful that I had that warranty. I probably would not have paid to get the computer fixed if it had broken 3 day AFTER the warranty was up.
Also with AppleCare, which is Apple's 2-year extended warranty program, you also get technical support any time you need it. This adds more value to the extended warranty than just the insurance policy part of it.
Just recently the the 27" Panasonic television we bought in 2002 started showing some intermittent audio issues. Thanks to the extended warranty that I bought with the television, which extended the warranty for 5 additional years on top of the manufacturer's 1 year warranty, the problem was fixed free of charge. Just to walk into a TV repair shop with a problem cost $50 whether your TV gets fixed or not.
So whether to purchase an extended warranty or not lies not only with price and it's cost efficiency, if the product DOES break, but also whether the warranty can offer you any extra value.
Generally 99.99% NO
by demaxX - 12/5/07 8:51 PM In reply to: Are Warranties Worth It? by Mike LaPlanteHaving a buying history of 67 year and anything a man would want should be good enough to lay a foundation whether extended warranties are worth the price.
Generally and 99.9% of the time NO; a waste of money.
I've only bought (2) two extended warranties in my life. One was for a LCD monitor (so dirt cheap I had a gut feeling which turned out to be true - and was repaired).
The other, I bought a DELL Laptop 1 yr full warranty $40.00 But I didn't buy it to cover just the Laptop but the technical service behind it.
If I had bought extended warranties on most of my large ticket item, being ex-CPA, I roughly figure I'd have $96,000.00 less in my retirement.
If the money were placed in savings, instead spending the extra, the compounding & Present Value would give you a nice nest egg. So save instead of spending it on a most probable useless warranty -- but there are exceptions -- know your product, the maker and research reliability.
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