Home audio & video: Extended Warranty.........are they worth it????
extended warranty - not a question of price of the item
by ncutry - 12/6/07 6:15 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI do sometimes buy the extended warranty - particulary if on-site service is available. The decision though is not really a question of the item cost, but how critical is the item's operation and/or how long can I be without it, and lastly how quickly could I replace it if it suffers a catastrophic failure. If I can't be without it, and it's critical (like for watching prison break or 24), and I can't replace it immediately (sometimes this IS a cost issue) then I will usually buy the ext. warranty.
Extended Warranty - "Consumer Priority Service"
by georgeblack54 - 11/8/09 9:27 PM In reply to: extended warranty - not a question of price of the item by ncutryHey,
Even I was not convinced with extended warranties earlier, but my friend convinced me to get one on my Dell laptop. unfortunately, it broke down and extended warranty came to rescue. Honestly, Consumer Priority Service made things easier and cheaper for me. I got my laptop repaired within no time. and the customer service was so satisfactory. Good I got extended warranty!!!!
Check this : www.merchantcircle.com/business/Consumer.Priority.Service.800-905-0443
Extended Warranties
by videoscenes - 12/6/07 6:15 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI would have to agree that Extended Warranties are a "yes, No, maybe" situation. For me, it depends on the product being purchased, cost of the warranty, reputation of the company providing the warranty, and the chances of needing that warranty.
As an example: purchasing a STANDARD DVD player. These items are reasonably priced. You can pay anywhere from $39 to $200 for one. In this case, an extended warranty might cost $69 for a 2 year extension. Well, I would rationalize that even if the product failed after the first year of warranty...it is most likely obsolete then, and buying a new DVD player rather than paying for getting it repaired either with or without a warranty would not be a sound decision. Therefor, I would not purchase a warranty. Now, I own a laptop that cost me close to $2500 with an extended warranty. After a year of ownership the video card went out. Repairing this would have cost me over $1000 because the video card is mated to the motherboard. My warranty paid for repairs. Subsequently the same problem ocurred two more times. The warranty paid for repairs each time. In this case...it was a God send, and more than worth the $299 I paid for the extended warranty.
So, assuming you are buying a high risk item such as a laptop that has more propensity for early failure due to being moved alot, or even dropped, an MP3 player, a high dollar plasma TV...etc...then a warranty is probably a safe bet.
For household appliances...if they contain alot of electronics, and many of them do...again...maybe a safe bet. To make these kinds of warranties more cost effective, use their free services, such as cleaning the coils on the new frig, yearly inspections on the washer. This will help keep your unit functioning well, and perhaps you will never need to use that warranty as a repair device. That would be a good thing. As a form of insurance against failure for these high risk, high dollar items I believe that an extended warranty can be worth its benefits.
Extended Warranty
by krazyken44 - 12/6/07 6:20 AM In reply to: Extended Warranty.........are they worth it???? by jraggieExtended Warranties are a good buy and sometimes they aren't needed.
The first thing to consider when buying one is:
1 Cost of the warranty. See below
2.Cost of the product covered, if it cost more than 1/3 the price it's not worth it in most purchases. Example: A $499 laptop ext warranty is $199; this may or may not be a good deal, but a $25 stereo for $8.00 warranty isn't.
3.What the warranty covers? Product defects only, and/or power surge and accidents. These are the two of the types of warranties availible.
4.Does the product have a high rate of failure. e.g. Some used autos, products prone to accidential damage (laptops), or new products like a new computer controlled washing machine model I bought once. Now, I wish I would have bought an extended warranty on it. Ratings online can tell you if you should consider an extended warranty. Do you drop your laptop? Then the accidental warranty is worth it.
5. Check out the company offering you the warranty. Their service and reliability record should be easy to find online. Sears is a good a extended warranties, but expensive is a one example. Best But is another example of most expensive and problematic when there's a problem.
Now, as to my actions on an extended wrranty. I'll give you and example of when I bought one and when I didn't.
I recently purchased a 02 Buick with 56,000 miles on it for 7,900 form from a dealership. I checked online and saw the car hard some problems like headgasket falures, tranmission shift control issues, and ignition switch issues. A extended warranty for $1950 makes sense cause just two of these items cost to repair as much as the warranty. This warranty also covers a lot of other very expensive systems on this car that can fail. I learned this from past repairs when a fuel pump went, a trammission converter, and a PCM (The car's computer.) This warranty also gives me 6 day rental car free and it can be extended to 30 days for certain repairs and towing, so it makes sense. (I also purchased GAP insurance to cover me in case of total loss of the car in a accident; it covers the whole finance contract.)It was less than my insurance companies price.
I bought a new clothes dryer about 6 yrs. back for $299 and declined the warranty, no problems at all for 6yrs. This is a time when I say the warranties are a waste of money. This type of product lasts a long time...... I had to replace a belt, but the belt was $20 and I'm mechanically inclined; I put belt on in two hours. No problems now.
I own a stereo home system that about 10 yrs. old never needed a warranty for it. Another probuct that either works out of the box, or it's broken in the box; if it doesn't fail in 30 days it won't most likely.
I'm now considering an LCD HDTV purchase and looking at many factors; so far the extnded warranty looks like a deal because it's $58 for a up to $999 TV from a store that covers surges with the warranty. This warranty covers power surges, so that makes it worth it. Power spikes & surges aren't covered in my home owners insurance.....
All extended warranties must be looked at carefully; then you decide, but remember it's always best to have a little bit more insurance than not enough. Some products are easy and cheap to fix and others aren't and sometimes you can throw them away.
That's my take on how I deal with the issue of extended warranties, but you can decide what's worth it.
cdsafdsa
by kmolthop - 12/6/07 6:31 AM In reply to: Extended Warranty.........are they worth it???? by jraggiefdsadsafdsagfa
It's a simple question for an actuary
by akupchella - 12/6/07 6:36 AM In reply to: Extended Warranty.........are they worth it???? by jraggieIt's all about the cost of the risk, and the money to be made by selling insurance.
If you never buy these - then you are "self-insuring".
Over your lifetime, if you NEVER buy an extended warranty, you will usually win but sometimes lose. That risk will be spread over the many opportunities you will have. The "expected value" of your net cost over your lifetime is that it will be cheaper to NEVER buy the warranty. And it will be cheaper by precisely the same amount that the sellers of these little insurance policies would net. That's more than their profit potential, because they have other costs to cover besides the cost of the claims. (I am assuming that their cost of the repair would be comparable to yours.)
Keep in mind that when they figure out how much to charge for these warranties they have plenty of data to go on, and they are pricing the warranties for a profit. The retailer usually gets a small fixed profit for the sale (but assumes no risk) and the insurance underwriter assumes the risk and makes a nice profit.
So- I NEVER buy the warranties, and when I get burnt -- that's life!
They are worth it in some cases
by rthrelkeld - 12/6/07 7:31 AM In reply to: Extended Warranty.........are they worth it???? by jraggieThe only extended insurance I buy is for my laptops. If anything goes wrong with one of them, the cost is always many times the insurance policy. I make my living as a consultant and my laptops are my office. If one dies then I am not working until it is fixed.
BTW, be aware that some companies like Dell have the normal extended warranty and an accidential damage policy. You need both.
Richard
Warranties
by Just4fun - 12/6/07 7:32 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI got an HP computer with warranty and every time there was a problem it was not covered. That I had several small failures does not say much for the product and that the service was not covered just gives the final blow. Since then, I have bought two more computers - Not HP and without warranties.
I got a refrigerator warranty from Electrolux and that has turned out to be an excellent decision. It has paid for itself twice over. They have repaired every problem, even those that were our fault. I'm not sure if that says much for the product, but they did stand behind the service.
So, yes, you need to consider the risk / reward. But be careful to study what is really covered. I have read that the stores can make more profit on the warranty sle than the product sale.
Not the best use of resources
by e-man3 - 12/6/07 7:39 AM In reply to: Extended Warranty.........are they worth it???? by jraggieExtended warranties are great--if you end up needing them. I bought a used car a few years ago, and the dealer offered me a $600 extended warranty for $300. I took him up on it and was glad I did. The anti-lock brake system went out and I got it repaired ($2,200 worth) for a $100 deductible. Later, I had to get the water pump replaced ($500 worth) for another $100 deductible. In that instance, it paid off big time--$2,700 worth of repairs for a total of $500. But that's the exception. More often than not, you buy the warranty and then end up not needing it. A better use of your funds would be to set aside the cost of each extended warranty in a savings account, and then you have a fund from which to repair or replace those items that do fail--a fund that is drawing a little bit of interest until you need it.
Let's look at it this way. Extended warranties are essentially a wager. You're betting the manufacturer that their product will fail and they're betting it won't. As in Vegas, the house (in this case, the manufacturer) usually wins. For every warranty they have to pay out on, there are many more that they don't. Why not play both sides of the table and pay yourself? If the product doesn't fail, you've saved the cost of the warranty. If it does, you have the money from all the other warranties you didn't buy that will cover the cost of repair or replacement. It's a no-brainer.
Extended warranties are great?
by russkeller - 12/6/07 7:47 AM In reply to: Not the best use of resources by e-man3They're not a wager they're a fraud. If you actually do need the warrenty for something I can guarantee it's not going to cover it.
BTW I got the extended warrenty with my car too
by russkeller - 12/6/07 7:54 AM In reply to: Not the best use of resources by e-man3But when my transmission went out guess what was covered. NOTHING! Warrenties are frauds.
They can be, but know what is covered.
by tjshipp - 12/6/07 7:41 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI think it depends on the $ you payed and on your willingness to fork over that amount to buy it again or pay for a huge repair bill. I purchased the extended warranty at Best Buy for an Xbox 360 and have had to use it twice. It was no hassle and no questions asked.
I use a credit card that extends the manufacturer's warranty
by karlfollman - 12/6/07 7:45 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI am an avid fan of Consumer Reports - the magazine's typical posture is to NOT buy extended warranties. Therefore, I always make major purchases with a credit card that adds additional time to the manufaturer's warranty at zero additional cost to me. Some examples of credit cards that offer this include: Capital One - Platinum; American Express - almost all levels; Master Card - top-tier levels; Visa - top-tier levels; and many others.
No some are a rip off
by StevenJ - 12/6/07 7:46 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI have never used an extended warranty on anything that I bought. One time I did. It was not honored. I found out that this company had a practice of doing this. My RJ45 connector on a laptop had broken, the connection was ok but the cable fell out because the clip that held it in was broken. The keyboard had a key (W) that did not work. It is a notebook.
I bought the keyboard and installed it myself I also replaced the RJ45 connector, which was not easy to find. The machine works fine.
Further, I read on the Santa Clara University school of Law website, where this company had an extremely poor customer service program and one should NOT buy a computer from them and surely DO NOT buy thier maintenance contract, purchase it from the manufacturer of the computer.
I would very carefully have an attorney go over the mountains of legalese with you before you purchase one of these.
Depends on the company and product
by stmarshall89 - 12/6/07 7:57 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI've bought these warranties 3 times: 2 for laptops from Best Buy and 1 from Compusa. Every time it has paid off, although there's a big difference between the two companies. My experience has been that Best Buy staff in over four different states (NJ, PA, CA, and CO) are generally far more friendly and helpful than their counterparts at Compusa in Colorado (who are generally rude and will try to weasel their way out of the contract).
I've also had the unfortunate experience of buying a laptop that had a "silent" recall (the manufacturer didn't want to own up to making a bad product). In this case, having a store warranty was great, because I could just drop the machine at the store and didn't have to deal with talking to someone in India after sitting on hold for hours.
So in my opinion, the bottom line is: if your not very trusting of machinery or plan to get a lot of use out of it which increases the likelihood of future problems, shelling out funds for a extended, all covering warranty may be well worth the money.
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