Home audio & video: Extended Warranty.........are they worth it????
Yes!....Sometimes
by mustangz5 - 12/6/07 5:16 AM In reply to: Extended Warranty.........are they worth it???? by jraggieWell let me state first that I do work at one of these retailers and it is pretty much my secondary function to sell these "replacement or service" plans (we're taught to not say extended warranty's).
In my opinion there are things that everybody shoudl buy them on. Mp3 players, telephones and remote controls (only if you're spending a lot of money on one). If you think about it, these are all highly used, highly sensitive devices. Mp3 players often freeze, get banged around, scratched up etc. Remote controls get used like crazy, and if people are crazy enough to spend $150 on something the dog's going to chew up, spend the extra 6 bucks on a replacement plan. Chances are that if you're in the store buying a new phone, the last one broke, and probably for good reason.
Ipod service plans are the best. Have you ever met someone who has never had a problem with their Ipod or battery?
Other service plans such as dishwashers and refridgerators are so much not as important. Let's face it, you've had that fridge for 20 years now, and NOW it broke.
With the advent of the "accidental" service plan on cameras and camcorders, there's no reason why you should not get one. The only thing these do not cover is fire or theft. Picture this (no pun intended haha): you're at the beach with your friends with your brand new $300 camera and you drop it in the water...well now its done for. With the plan you're fine. Without the plan you probably would not have even taken it out.
Extended warranties... it depends
by stldave - 12/6/07 5:25 AM In reply to: Extended Warranty.........are they worth it???? by jraggieSimply put, extended warranties are a huge source of profit for companies like Best Buy and Circuit City. In fact, because the margins on some of the more competitive electronic products - computers, TVs,etc. - are so small, extended warranties might be the ONLY source of profit.
So on the face of it, it might sound like a rip-off to give in to the "it's going to fail" argument. That's especially true in those ridiculous situations on low-end products (a wireless mouse, for example), where they'll say "it only costs $6.00 to extend the warranty for 2 years." Mind you, this is on a product that might have only cost $30 in the first place. Now THAT is the definition of rip-off.
However, my wife and I have had some experience - mainly with appliances, since they have a lot of moving parts and tend to be more susceptible to break-downs - when it was really helpful to have the extended warranty. For starters, about five years ago, we bought a brand new clothes dryer. After about a year and a half (when it was out of warranty), we had to have the dryer repaired TWICE because of a fault in the heat sensor. That's NOT an insignificant amount of money (something like $250 per visit, because of the price of the part). So we ended up spending $500 to repair a dryer that was only about $450 in the first place. Why would we do such a supposedly stupid thing, instead of just buying a new dryer? Simple... both times it happened, we expected the part would last. As such, would you spend $250 to fix it, or would you bail and get a new one?
Needless to say, we've bought the extended warranty on failure-prone appliances (only) when given the opportunity. I believe we bought a 5-year extended warranty on a washer and dryer combo we bought (which was about $1,200). The warranty was something like $75 for the pair. Already, we've had service calls (1 each) on the washer and dryer. That would have cost us around $250 for those service visits, so it's already paid off - not to mention the peace of mind that we now still have three years left.
I'm much more skeptical about electronic items that don't fail as often - things like HDTV's or DVD players. Despite what they say, those items don't usually fail within the extended warranty period. So don't buy into that line about "well, you're definitely going to need to replace the photon gun in a rear projection TV within 3 years - and those cost $500!" I cry foul, because a) that's not true any more (most manufacturers have dramatically increased their build quality, and b) you'd have to watch the TV 24 hours a day for 10 years before that's likely to happen.
One other thing to consider is the useful life of the product you're buying. Computers, for example, are an item many people will replace within 2 to 3 years anyway to keep up with the better, cheaper, faster models which will inevitably follow. So does it make sense to spend money for a 3- or 5-year warranty on a product like that? Probably not.
However, there are some instances when buying an expended warranty for a computer does make sense. For example, I bought a fairly expensive laptop two years ago that I still love. It does everything I need it to do because I bought the highest end processors and memory available at the time. Within the first year, I had tremendous problems with it. It had to be sent in for repairs (while I had to switch to using my wife's computer in the meantime for work) FOUR TIMES! They finally figured out what was wrong (and I wasn't crazy - it was the CPU), but it took a lot of time and frustration to get it fixed. So when the 1 year warranty was about to expire and I was offered a $99 one-year extension, I gobbled it up. $100 to protect a $1,700 computer was a bargain, especially since I knew it was prone to problems (and despite the fact that getting it repaired by this company was a real pain in the butt -- it was still a a good investment). Now I won't tell you what company this was with, but I will tell you their initials... HP.
My suggestion on extended warranties is that you consider the following:
> How much would it cost to replace this item if I have problems beyond the original warranty? If it's a lot, and you expect to keep the items beyond the original warranty, it might be worth it.
> Is this REALLY likely to fail? If it's a TV, I'd say probably not. Most items like that are going to fail some time within the original warranty if they are going to fail at all. But if you're considering an appliance - since it has a lot of moving parts and is under constant stress - it could well be worth it (provided the extended warranty is a relatively small fraction of what it would cost for repairs or replacement).
> Keep in mind that items which fail are prone to failing more than once. In our experience, each of the appliances which failed (a dryer and a microwave) failed at least two times. Add that up and you could buy a new one. The trouble is, you don't have the benefit of perfect knowledge about what MIGHT happen in the future after you experience the first failure. You can easily get into a repair cycle that WILL cost you more than replacing the item altogether.
I do think you need to be a little leery about most extended warranties. Remember, they are huge profit centers. But keep in mind that retailers who set warranties that cost a standard percentage of the purchase price (say 10 or 15%) are doing so by calculating the potential cost of repair work over ALL of the products that they warranty. That means you could really benefit from buying a warranty on a high-failure item, since the company is counting on the non-repair prone items (calculators, video games, toasters, etc.) to balance things out.
One final word. Many retailers will actually give you 30 days to decide on an extended warranty. That means one of two things: a) they will let you get your money back on a warranty you purchase, if you decided you don't need it in the first 30 days; or b) you can actually wait to purchase it in the first place for 30 days. Either option can give you a little breathing room to step back from your decision and more thoroughly consider a warranties potential value during a time when you don't feel pressured to buy the warranty just to get your item and move onto the rest of your holiday shopping.
Good luck and great holidays!
- Dave
In the long run...not for me!
by Zenvibe - 12/6/07 5:27 AM In reply to: Extended Warranty.........are they worth it???? by jraggieOver the past five years, I've put aside approximately $1000. on what might have been shelled out for warranties on a laptop, MP3 player, digital camera and a couple of other things. Nothing has required servicing, but if something had, I would be quite prepared to pay for the repair or buy a new product. The odds are hugely in favour of the seller of the warranty. I prefer to have them in my favour!
I take the same approach with road assistance plans. In 15 years, I've saved about $1500. by not buying a plan. During that time, I spent $90. for a tow... and my car insurance covered $50. of it.
While not for me, I do understand that in particular circumstances
(as pointed out in other postings), an extended warranty may be appropriate for some buyers.
Extended Warranties & Burn-In
by dps782 - 12/6/07 5:28 AM In reply to: Extended Warranty.........are they worth it???? by jraggieWe have given in the extended warranties far too many times but I do have a success story with one. The lens on one of our Olympus cameras stopped retracting close. I took the camera in to CompUSA where it was purchased to have it fixed (forgetting about the warranty) and was told the warranty purchased almost three years earlier was about to expire but that we were within two months of its expiration and that the repair cost would be covered.
CompUSA sent the camera to Olympus for repair and they did what was equal to a major overall on it replacing what I will call it’s “motherboard” the brain of the camera,. It was returned to us reconditioned like-new and two-years after the repair continues to work fine. Needless to say this time we were on the winning side of the deal.
Also reference to TV’s and electronics. I do “burn-in” my electronic items in by leaving them on continuously for 24 to 72 hours. If anything is going to happen it most likely will happen during this burn-in period making it easier to return for replacement to either the store where purchased or to the manufacture. It’s no guarantee but if the item makes it though the burn-in you can rest easier knowing it passed the test and will be with you for a while.
Extended Warranties Odds Stacked Against Buyers
by PayzanPW - 12/6/07 5:32 AM In reply to: Extended Warranty.........are they worth it???? by jraggieMy simple rationale for refusing any and all extended warranties is that the retailers sell them because they make a profit on them, i.e. they are selling them for more than they are worth. To buy one, then, is to pay more than it is worth.
Its all in the odds, long run.
Extended warranty....possible to get one with a credit card
by Topher06 - 12/6/07 5:46 AM In reply to: Extended Warranty.........are they worth it???? by jraggieWhen purchasing hi-value electronic items I try to use a credit card that extends the warranty. American Express does this and I've had to use it a coule of times over the years. Well worth the annual card fee and much less expensive.
Sometimes
by Michael00360 - 12/6/07 5:48 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI have used extended warranties to get products replaced such as a camera. But on the flip side, I purchased extended warranties for the parts on a computer, and the computer died right when the warranty quit. I will still get the warranty just in case, but I don't count on the part quitting until the warranty runs out.
It depends
by rainman927 - 12/6/07 5:57 AM In reply to: Extended Warranty.........are they worth it???? by jraggieAs a former store manager with a large electronics firm, the subject of extended warranties was always a controversial and confusing one for my customers. We offered service plans on almost all of our electronic products, some were replacement plans, while others were repair. We did mot offer an extended warranty to the customer, based upon profit, as did others, but as a service. The products warranty cost and avaibility was based upon a realistic understanding of the manufacturer's warranty and historical repairs to that particular type product. Based upon those facts we gave the customer the option of making an informed decision on the matter and it was then their decision as to then as to the value of the warranty. Historically, I can state that what we offered(and still do) was very positive, and would personally purchase it myself on certain items, while declining it on others.
Before you jump to the conclusion that I am pro extended warranties, let me emphatically state that I am not. I am an informed consumer, I research my purchases totally, that means not only the product, but the retailer and it "extended warranty" as well. Unfortunately, many of the "extended warranties" are not worth the paper that they are printed on, whether it is being offered by the manufacturer or the retailer. Anyone who knew of or had purchase one in the 90's from the large electronics buying group that went "belly up" in 90's know of what I write. They are misleading, an average consumer doesn't have a realistic understanding of what they are buying. The issue is clouded by a number of factors, among those are what does the manufacturers warranty cover and for how long, who is providing the extended warranty, who is doing the repairs, etc.? Are you buying an "extended warranty" or a "service plan"? It up to the consumer to spend as much time researching this if not more than they did in deciding upon a given electonics puchase.
A blanket "yes" or "no" cannot be logically given to the issue. Be an informed consumer, do the research. Remember the words of Alexander Pope..."A little learning is a dangerous thing..."
Yes, absolutely
by pmsagdeo - 12/6/07 5:59 AM In reply to: Extended Warranty.........are they worth it???? by jraggieIf you purchased a Ford vehicle in the last few years and did not get extended warranty, I feel your pain. I would recommend extended warranty on anything that costs in four figures or more, if the warranty cost is no more than five percent of the purchase price. That is $1,500 for a $30,000 automobile. One major repair and you recover the cost. I should also add that I have had very good experience with Yamaha, Toshiba and ATI when the equipment needed repairs a few weeks after the warranty expired. They did the repairs at no cost to me! I will naturally be a lifetime customer of these companies.
They are a rip off!!!
by Jon McNamara - 12/6/07 5:59 AM In reply to: Extended Warranty.........are they worth it???? by jraggieApart from being asked to renew the extended warranty - normally long after we have disposed/replaced the item - we have never had any use for one.
Last time I was asked I challenged the salesman saying - "I can understand the first year or so warranty - since they allow me to get the goods repaired without argument if they are so badly made that they breakdown in the first year or so or if a component goes through no fault of the manufacturer" - that upset him - then I asked "assuming the goods are well made - are you suggesting that they will breakdown during the next year (or whatever the period they are selling) because if you are you can keep the goods and I'll buy something similar from somewhere else" ... it was quite remarkable just how dependable the goods suddenly became - and how easy it would be to have them fixed if something did go wrong!
The question really is - "how long should should we expect the goods to last?" and "if they last for (say) five years - will we not be better off replacing it with a new/modern version - which would possibly only cost as much as the extended warranty would have done anyway?". There may be goods worth protecting in this way - high price, delicate instruments - but the general, purpose run of the mill, domestic appliance - probably not
Jon Mac
Type of use is the key for me
by kcrlshell - 12/6/07 6:08 AM In reply to: Extended Warranty.........are they worth it???? by jraggieI will buy the extended warranty or additional coverage insurance on small electronic that are going to get carted around alot - if the warranty covers at least some sorts of accidental damage. Things like cell phones, digital cameras, mp3 players, etc. I have had one of my kids drop their phone in the toilet and gotten an identical replacment for $50. And an mp3 player with broken screen.
But, anything big that gets delivered to the house? No...those things usually either fail within the warranty or work until I'm sick of it and want a replacement anyway.
The downside of warranties
by noblefir - 12/6/07 6:12 AM In reply to: Extended Warranty.........are they worth it???? by jraggieWe bought a vacuum at Sears with the extended warranty. One year later it needed repairs. I took it in and it was covered 100%! Sweet, but the repairs took 3 weeks. We bought another vacuum at Costco and now have the Kenmore as a backup. The electrolux works far better and does not plug up like the Kenmore.
We bought an LG washer at Best Buy along with a four year warranty. The soap started to bubble up out of the drawer where it gets loaded. I called Best Buy, and they said that they did not have anyone that can service the machine in our area. The store is 9 miles from our house. Grrrr.
Yep, a washer
by krazyken44 - 12/6/07 6:31 AM In reply to: The downside of warranties by noblefirYep, Sounds like a Calypso washer I got from Sears. Too bad I didn't buy the extend warranty cause Sears is at least fixes the product.
Calypso info
by randis4927 - 12/13/07 9:20 AM In reply to: Yep, a washer by krazyken44The Whirlpool/Kenmore Calypso machines were recalled by Whirlpool. The repairs would/should have been covered by Whirlpool. Also, the older Kenmore Oasis/Whirlpool Cabrio machines that tangled clothes have been repaired with a new impeller plate that prevents the tangling issues.
Common HE issue
by randis4927 - 12/13/07 9:17 AM In reply to: The downside of warranties by noblefirA quick question: Did you use high efficiency detergent with your washer? Many people are under the mistaken assumption that using less standard detergent is the same as using high efficiency detergent. This is definitely not the case. HE detergents have little or no sudsing agents because the HE machines recirculate a small amount of water with rather high turbulence. It's kind of like when you use dish soap for the sink in the dishwasher. This was such a common occurrence that just about all manufacturers now state in the manual that if you fail to use HE detergent with an HE machine, it voids the warranty instantly.
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