Extended Warranty.........are they worth it????
by jraggie - 12/5/07 2:44 AM
What's everyones opinion on the subject of purchasing extended warranties?
by: jraggie December 5, 2007 2:44 AM PST
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At my last company (a high-tech company), I was the one who did the accounting for warranties. With electronics, if it is going to break, it will most likely break sooner rather than later (I'm not discussing out beyond 5-7 years) - after that time - the failure rates begin to increase. Of course... if you offer me a warranty for cheap enough... depending upon the product, I might take it (that's why i'll buy my tv at costco since the throw a two year in for 'free'). However, outside of a very cheap warranty - I never purchase extended warranties. Heck, with all the money I've saved not purchasing them... I could afford quite a few new products to replace the old and/or broken ones.
In addition - any financial planner worth their weight will tell you never buy insurance riders for non-catastropic issues - and that's exactly what you're buying with an extended warranty - very expensive insurance.
Only if it is a Sony game console or a mobile phone
Sony game consoles seem to have an average 18 - 24 month lifespan -
get the coverage. Similar for high end mobile phones with PDA functionality. For other items ( HDTV, any device under $300,
Large kitchen appliances is one exception I get the coverage because
of the large impact when there is an outage.
Alienware: Doesnt matter whether you have extended coverage or not - you are in for nothing but misery from a repair / fix endless cycle and the incredible amounts of time getting the product in/out of service.
Apple yes, Dell no
by don509 - 12/5/07 5:19 PM
In Reply to: Only if it is a Sony game console or a mobile phone by ctoguy
When I buy an Apple computer, especially laptops, for my Son I always get the Apple Care plan because unfortunately it is always used. He had several logic board burnouts on his last laptop, and the MacBook I just got him in February was just totally wiped out, but repaired by Apple in just days. They gave him Leopard at the same time.
On the other hand, I have a Dell desktop. I did buy the extended warranty and I did need it. As a result I would never buy it again because I would never let another Dell repair subcontractor touch my computer. NEVER! I still like Dell allright, but I will take it in to an independant shop next time.
If its Mobile or moving YES if it sits on your shelf no
From years of growing up the son of an electronic repairman, I've see lots of things broken go bad. Here is my suggestions,
First, if it moves or is mobile get the warranty. These devices, MP3 player's, Cell Phones, laptops get abused. They're dropped, see rain, and travel countless miles in our pocket (or purse) next to our keys and lip balm. They will break.
Second, if your buying a product on sale, and its a name brand you've not heard of before... get the warranty. These things are made cheaply and usually are the ones that end up in the repair shop.
PS think twice about that Best Buy warranty. I had one friend who never got his digital camera back from the store. I had another friend how took his computer to get fixed only 2 months later after being told the manufacture was fixing it, to be told it wasn't fixable. The store also spend 45 mins looking for it in the back of the store before he was told this. Another miss-placed object?
Finally DLP tvs. On top of the rainbow effect, (Google it) The lamps that are used to light all those mirrors, often burn out or get dim after a year. Its the nature of a light bulb. To replace them you don;t just buy a light bulb but the entire socket, heat sink, fan and module it sits on. Cost, parts alone $100-$150. Get the 4 year warranty. You'll be glad you did. If anything to get that light bulb replaced yearly.
EW's are like casino's, you may win but.....
If you like peace of mind, then buy an EW. But, financially, they are a losing proposition overall. You may or may not use it and probably won't. Something to consider; certain credit cards will double the manufacturer's warranty. Also, things with a lot of moving parts or that get jiggled a lot, (printer's & mp3 players, laptops) may be a justified EW purchase. I paid $20 for one with my MP3 player and it was replaced twice no questions asked. Whereas a TV doesn't get moved much and usually a "lemon" will break before the manufacturer's warranty is up.
Laptops - you bet. With my last 3 laptops, every one has been in under the extended warranty. An HP laptop even met Best Buy's "been in 4 times so you get your original price towards a new one". Bought a Toshiba with it
Desktop computers - why? $300 warranty on a $500 machine? 'nuff said.
Headset for using Skype: OK - I'm cheap - I use a wired one. Headset was $22, 2 yr warranty $6. I got 3 "free" replacements during the first year (mostly due to tripping over the cord).
Appliances, that's tougher. No doubt that they "ain't what they used to be" quality-wise. If you've got 5 teenage boys - get a warranty on that refrigerator! Most of the time - no.
TV's - why? If it works for the first year, unless you abuse it, what's to break?
Cars - NO! First, the salesman gets a tidy little commission. Second, 99% of 'em only cover stuff that never breaks. Put the money aside for regular maintenance (& use it for that!) - you'll be better off.
It all comes down to the ratio and how likely the unit is to break. If you buy a quality brand, it'll (generally) last longer. If it's a fragile item (or you're a klutz like me) - it may make sense.
My 2 cents...
Last time I bought an extended warranty was for my digital voice recorder. It was $5 for the warranty policy, so I felt like it was a good decision. Who knows what may happen to a voice recorder in my backpack?! Textbooks get thrown into it, chairs get set on it, it gets dropped on concrete occasionally, not to mention I have a rock hammer and a bottle of acid in there most days (I'm a geology major, these items are pretty standard). However, I did not purchase one for my laptop.
I always feel bad for the salesmen though. When I bought my laptop I was looking for the best cost to quality ratio. The salesman started telling me how few customer complaints each model had, how dependable and reliable and long-lived they are. After several minutes explaining how each of the Wonder Computers would never ever ever ever break, hard drives would not fail for millenia, etc, he pulls out the extended warranty plan. You know, just in case. I almost laughed out loud. The same guy who just spent 30 minutes telling me how reliable the laptops were was now trying to convince me how completely undependable they could be. And it's not his fault; his boss probably told him if he doesn't offer the warranty he a) gets no commission on it, and b)will eventually be fired because of it. I just went with the 1-year plan it came with. And so far, the only "problem" is that I may need a new battery in another year or so (not exactly earth-shattering, eh?). I say generally they are not worth the money.
1) Purchase: an unlocked, refurbished "smart" cell phone from my favorite on-line computer store for $75. Warranty, 18 mo for $14. Phone outlasted the 30 day manufacturer's warranty. Then it failed. Reported it and received, not a replacement, but gift card for the online computer store. Called Motorola to describe issue and was told to try a new battery. Purchased a battery from favorite cut rate online batt store for $5. Phone's still working 8 months later, I got my $75 gift card. Total cost of phone about $20. Came out ahead, wouldn't you say?
2) 42 inch projection HDTV w/ ATSC and NTSC tuners, HDMI ports x 2, et al. @ $899.99 last Christmas with 30 day warranty and no other warranties. Extended Service x 3 years = $389, which I didn't take. Was told by sales people that a replacement projection bulb would be approximately $300 installed. Perhaps that's true, with labor rates. Owner's manual (when I got the TV home) has a one page instruction on OWNER replacement of the bulb. The bulb itself I've found for $179 - $200 online. Returned TV for replacement due to VCR/DVD capture problem before 30 days. Now at 11 months 2 weeks, everything's fine. Accidently came out ahead on this one, I think, at least for now. I didn't spend the $389, which if I add to it another $500 I could buy the whole Unit and we've already used it for almost a year without replacing the bulb yet.
Can't manage these good outcomes everytime, unfortunately. Warm Regards to all...
If you buy a VCR/ DVD recorder combo get the warranty!
I discovered this problem the hard way. Two years ago I purchased a Panasonic VCR/DVD recorder combo. It worked great for 6 months then started failing. The company claimed that I needed to download their DVD support upgrade and the product would perform better. WRONG!!!!
The product continued to cause problems until it eventually refused to record DVD's 11 months later. I had no where to turn, the warranty on this product was only good for 90 days. So that was just $300 wasted. I never had a problem with computer dvd burners and decided I would get another VCR/DVD recorder combo equipped with a hard drive. Only problem is none came with an HDTV reciever. I purchased another Panasonic VCR/DVD Recorder combo that included this type of receiver but I made sure I paid the extra $30 for a 3 year warranty. I can already see problems ahead with this recorder also, but this time PANASONIC can eat the bill of fixing it.
Depends where you are
Here in the UK, we have a law called the sale of goods act, which says any purchase must be fit for purpose. If a 20 dvd player lasts 12 months, that could be seen to be reasonaple, but if a 3000 plasma only lasts for 18 months, it would be covered under this act, even if there was only a 1 year manufacturers warranty on it. the courts seem to take the position of "was it reasonable to assume, given the cost of the appliance, that it should fail in x months?"
Unfortunately, very few british people are even aware of this, and dont try to claim, consequently manufacturers still give us the same warrant as they were giving us 50 years ago, (with the exception of some car makers)
I never buy the extended warranty unless the manufacturer's warranty is weak and the item is costly. For most cases, the warranty will cost you more than replacing the item by the time the manufacturer's warranty expires.
I would buy it for a big purchase as an HDTV plasma, not for a camera or even a computer.
An extended warranty is a bet with an insurance company as to if your product is going to fail. If it does, you win and they have to pay. If it doesn't then you lose and are out the premium you paid for the warranty. Let's face it, these things are sold by insurance companies who are in busness to make money and do indeed make a lot of it. They couldn't make these huge profits if they paid off too much. They bank on the fact that the biggest percentage of products don't fail or if they do, that it costs very little to repair. So it only makes sense that over the long run, they are not a good value for you unless you happen to be one of the few who has a major failure and a big payoff - that's the gamble you take.
I would like to offer an approach that considers two factors primarily: the cost of the product and the likelihood that one will transport it on a regular basis. First, with regards to cost a person should reflect on the absolute need of the product and if he/she could afford to replace it immediately if forced by need. Consider the situation of a laptop that a family uses to check email and surf the internet versus the striving young businessman who uses the laptop to conduct business. If the laptop is broken in the family, ostensibly one may assume deeper pockets with the family given a more stable economic base as well as less pressing need to replace it a.s.a.p. However, the businessman may miss out on significant opportunities if left without the computer and would need to replace it quickly. Second, with regards to the likelihood of transport, I believe that's an important consideration because transportation exposes one's electronic device to many more factors (i.e. coffee, gravity, theft) than otherwise if it were sitting in the house. Even beyond obvious misuse or theft, which is often not covered under these extended warranties anyway, the simple act of moving expensive electronics makes it more likely that the component parts will come under stress sooner. Consider now the situation of the HDTV which, with a lower price and greater reliability now, will sit at home and likely not come into contact with the outside world. Yes, it was significantly expensive; however, the investment is at relative low risk to the aforementioned situation of the active laptop user. That laptop user will transport that relatively fragile electronic system to multiple jarring events that may, after time, overwhelm the build quality of the system. In summary, if the system is particularly expensive and an integral tool in one's life (that's a question that the reader has to answer him/herself), then all one has to ask is, "am I going to move this electronic device more than once a day?" (arbitrary number, there, but implies that it's moved often and regularly). Finally, here are some examples for fun:
HDTV: expensive but doesn't move
PC tower: expensive but doesn't move
Laptop: more expensive than PC tower and moves often
iPhone: as expensive as some low-end PC towers and moves often
Car: expensive and moves by nature
Home: expensive, doesn't move generally, but in serious trouble without one
Hope that this has been helpful/fun.
You get a one year warranty with most products. The extended warranty starts from purchase of the product. If there are any problems with in the first year it is turned over to the manufactures warranty not the extended warranty of the store. If you bought a two year extended warranty, shouldn't that give you three years of coverage? You already have the one year coverage from the manufacture with the purchase. Your two year extended warranty only gives you one year coverage after the one year manufacturers warranty ends instead of the full three years of coverage that you paid for. All the major companies that I have dealt with do this.
depends...is it made in China?
If the item is made in China, **by all means** buy the warranty. I do a LOT of repairs on "rebranded" Chinese large screen HDTV's that are sold at all the big box stores. You know the ones...$400 or more below the name brand sets. They cut corners in places they shouldn't, such as substandard capacitors, untested firmware, skimping on component counts, no tolerances, etc... the list goes on. My Chinese dvd recorder died due to faulty capacitors and a bad design that allowed the voltage to spike upon failure, wiping out all hope of a repair. Most name brand stuff is designed taking such potential failures into account with the addition of a few cents worth of extra components with protection in mind. The addition of a few $.05 diodes could have saved it from the trash. But if you have no reputation to protect, only shooting for a low price point, expect the unexpected.
Maybe Yes and Maybe Not
Usually if I am buying a printer, computer or techie kind of item I do not purchase a warranty, If anything is going to happen it will within the mfg warranty, or by the time it happens it may be better to replace than repair.
But here is one, I purchased a microwave for about $150.00 and I bought a 4 year extended warranty, betting that something would go wrong and the life expectancy is pretty long on this item. After 3 years the keypad went out and it was replaced at no charge; one year later the keypad went out again and they took it back. Now here is the interesting part when I went to pick it up the counter person said did the unit look loke this when I dropped it off; it looked like an elephant sat on it, so I said no. They took the oven and we are still without a microwave after 2 months and are awaiting the insurance carrier to either replace or fix our unit.
Large ticket items and items with life expectancy of 3-4 years and you want to use it longer get the warranty. Small appliance and computer stuff that has only a couple years of life do not bother.
I agree with the Murphy's Law rule on this one...
I purchased a car stereo back in 2004 and chose not to purchase the extended warranty. My excuse was well, they're cheap enough so when I need a new one, which shouldn't be for at least 3 or more years. Well, the it started acting a little wierd about 6 months in and I wrote to the manufacturer since they do guarantee the product for a year. Then I would have to take it out send it to them blah, blah blah and it wasn't worth that much aggrevation. Depending on the item, especially those big ticket items, i.e. HDTVs, it's a good investment.
YES BY ALL MEANS YES
THere are so many sites on interent that have a no return policy on the net on big items and you are so screwed if something is wrong with unit.
Case point bought a toshiba 32lcd hlc56 love the tv however a bad hum developed which distorted the sound. Because i had a warrenty i was albe to get the part replaced and fixed FREE sears.
Had an mp3 player go out on me less then a year because of the replacement warrenty tiger direct scored
had a new one shipped to me in less then a month problem solved.
I have seen over and over on high definition fourms, of folks spending 2000 + on a tv they did not get the warrenty for and it cost more to get it fixed then picking up a cheaper end tv.
With that stated understand who you are doing business with if they stand behind their products. Understand the down side of buying refurbised products, and remember cc or bb or sears is not the only place you can get extended warrenties from!
Please no matter how great that new toy you just got , remember a year and a day from now if something happens and how bad you will feel if something goes horribly wrong.
Don't forget those dropped pda's cell phones too accidently washed it or dropped it or other.
Just keep in mind who you do business with as well.
Price is so so so important
Four years ago I bought a home entertainment center for $289.00. It came with a 1 year free warranty and I purchased a 3 year extension for $39.00.
A month ago they sent me an offer to extend that warranty for an other 3 years for just $633.00
I just did not think it was wort it. I called and offered to sell them my 4 year old unit for just $422.00 so that I could go out and buy a brand new one with 4 years of warranty and spend the rest of the money on a good dinner.
I would never buy a big ticket item without the extended warranty. Over the past few years I have used an extended warranty to replace a PS2, a 50 inch Sony TV, a digital camcorder, and a vacuum cleaner with no additional out of pocket expense. Very much worth the few extra dollars if you ask me.
Only if its free!
I once bought the extended warranty on a car stereo. Unfortunately, the stereo was stolen before the extended warranty would have applied. A complete waste of money!
On the other hand, I purchased one for a stereo receiver when the salesman offered to give me an equal dollar amount of videotape, that I would definitely use. Since that receiver was (at the time) new technology, it had a myriad of problems during the extended warranty period. The free repairs never totally fixed it, but they kept it going an extra couple of years.
Don't purchase the extended warranty at purchase
There are a host of companies that sell both extended warranties and service plans besides the local retail outlets that you may purchase products from. GE sells both extended warranties and service plans. I like a company that works through eBay but not exclusively through ebay called "Square Trade". You purchase your gizmatron and you take the reciept then research extended warranties and service plans online and find the best deal for the best price. Usually purchasing extended warranties and services plans at the point of sale are the most expensive options. Don't let the customer service representative at your local retail outlet pressure you into the decision.
There are even companies that offer complete service plans for all household appliances that you may own, no matter the age. You can even purchase extended warranties and service plans on used vehicles.
Extended warranties are an extention of the manufacture's warranty usually for a period of time either 1 or 2 years. A service agreement agrees to perform periodic maintance along with warranty replacement of apliances or devices.
Also you need to determine a couple thing. If gizmatron breaks can I fix it? And at what cost? If you are electromagnetically inclined then these things become less important to you. If the gizmatron is an expensive and very complicated item then I would recommend looking into some sort of extended warranty or service plan. Remember it's like an insurance policy. You purchase it for piece of mind and hope to never really cash in on it.
One more note Do not ever subscribe to a cell phone carrier's service plan on a telephone. They charge you 5 dollars a month for this plan and you could go to a company and get a 2 year extended warranty for probably 5 to 15 dollars. Be smart folks and do your homework then make your decision.
Don't ever purchase an extension or service plan on a computer, they are too easy to fix and Mobo's and peripherals are cheap the the price on them go down exponentially from the date of purchase. Also not in a computer many of the separate components have their own separate warranties, a Seagate HD may be warrantied for 5 years or so a NEC DVD ROM burner, that only costs 35 retail or so has a 1 year warranty, even the memory has it's own warranty. Infenion or Kingston that you may find in many brands of PC's have unlimited warranties, Video Cards carry at least a 1 year warranty. So you see do your homework and learn to fix stuff yourself and save yourself money.
Take an IPOD. I buy broken IPOD's on Ebay and I fix them for pennies and give them to family members. If the HD breaks I exchange it under warranty same with the new screen that may be purchased.
It Depends On The Extended Warranty
Extended warranties are like any other form of insurance. Some policies are worth the money, even though they have a high monthly or yearly premium. It depends on the level of risk you are willing to absorb.
We have clients who work all day getting in and out of their cars with tablet PC's. We recommended they purchase these units with the extended warranty, offered by the national reseller, that would guarantee replacement for any type of problem, including a cracked screen, resulting from a drop.
So far, after totaling the cost of the insurance for three years, for all their units and subtracting what they would have had to pay for two that have been completely replaced, compared with the cost of replacing the units out of pocket and they are about $180 ahead, with a year to go on the warranty. The batteries have started to go on three more of the units, which will be replaced under warranty too, meaning that by the end of the three year warranty period, having the warranty should save them over $500.00!
At the other end of the spectrum is the Grandma who's going to live in a largely dust, vibration and child-free environment and will likely never download a rogue program or dump her desktop over during a drunken frat party. For someone like this to get a "cover everything" extended warranty is crazy.
Like everything else in life... Create a matrix of features you need and the possible vendors who can supply a solution. See which vendor(s) meet/exceed the needs, have the best reputations and cost the least. Give them a chance to win your business and you'll likely walk away with exactly what you need and not have to pay too much.
Use them sparingly
I usually bypass them as sham especially when it comes to electronics that outdate faster than shelflifes BUT in one case when I bought an extremely expensive digital SLR I accidentally caved and bought the extended MACK warranty. I regretted it until more than TWO years later the shutter curtain fell apart and I reluctantly tried it out. They were amazing - took the camera without question, repaired and shipped it back like new. All along the way I expected problems... delays in shipping, delays in repair, some hidden cost. None of those. From now on if I'm buying expensive gear that I know I won't replace in less than five years and it's a small fraction of the cost to replace I really consider it. Especially a MACK extended ...
Extended warranties? Normally not a good idea.
The reason that sales people push the extended warranties is that they are extremely profitable for the seller. The clerks often receive a payment for selling them. They are so profitable because they are rarely used. As a result, I never buy the extended warranty on anything. And so far, nothing that I have purchased gave out during what would have been the extended warranty had I bought it, so I saved money by not buying.
On the other hand, if buying an extended warranty gives you peace of mind, it may be worth it to you. I just don't advise it.
I purchased a Dell 700 a year ago and I would be completely out of luck if I had not gotten an extended warranty. Since I got it the hard drive, processors, video card and motherboard have had to be replaced. With a high end computer they frequently do not know what is causing problems and have to replace many items. Diagnostics are not always helpful. And of course with a PC, Microsoft is causing its own set of issues and masking potential hardware problems. So if you do get a high end PC, I recommend a warranty.
Extended warranty? It all depends...
I'm never "blindsided" by the sales pitch for extended warranties, I expect the sales person to go off on that line. The difference between me and many other shoppers, is that I do all the homework I can on the item I'm buying before I ever set foot inside the store.
Do your homework first... read everything you can about what it is you intend to purchase. Read as many reviews by those who bought it posted at epinions.com, yelp.com and other forums. Read Consumers' Reports articles on the item... if you subscribe, it usually pays for iteself here and it's interesting and informative even when you're not out to buy something.
Having done all your homework, you should have a pretty good idea if the item you're considering is a piece of junk or not. If it is, why would you still consider it? Did previous purchasers end up happy, or did they have complaints. If there were complaints about the product, was it just one person with a thorn stuck where the "sun don't shine," or were there several complaints about the same thing.
Consider all the complaints, the seriousness of them (could you live with it or not?), and how did each reviewer come across. If reviewers seem like they have an axe to grind, I generally place less credence on them and pay attention to the rest.
When you get in the store to make your purchase, you should now be able to do it with a fair amount of confidence, and you should have a pretty good idea of how that item will suit you.
If you're still not really sure about getting an extended warranty or not, consider the cost of that warranty, taking into account the user reviews you've read and how much the unit cost to buy. Also, you need to be sure that extended warranty will actually cover whatever is most likely to fail after the manufacturer's warrant expires. Consider the cost vs the benefit.
I've never bought one and I don't intend to start now. I was tempted once... extending the warranty on my 2004 BMW 325. Extending the service portion would have provided free routine service for a couple more years but the cost was in excess of $2,000. I don't put enough miles on the car to make it worthwhile. The other option was to extend the warranty to cover everything (as if the car were a certified pre-owned) which would cover everything for 4 more years or to 100,000 miles as I recall at a cost exceeding $3,000. If a clutch goes, it costs about $1700. I'm highly unlikely to need another clutch since it's already been replaced under warranty (they only last 35K miles or so). It's a balancing act. The benefit didn't exceed the cost, so I didn't buy it. The car is rock solid anyway.
But I digress...
Consider how good the product is, what the experience of other reasonable people who bought it was, and make your decision. I'll bet you end up telling the salesperson "no thanks."
We purchased a warranty with our Sony HDTV 2 years ago for $200 for 5 years. We have already gone thru 3 lamps one of which we were told would have cost near $1000. The warranty is certainly worthwhile. Just wondering what you should do with the tv after the warranty expires...dump the tv when something goes wrong? Repairs are certainly expensive.
It depends what I'm buying. I had one for a Dell computer, and the repair guy practically lived here, and it was money well spent. But you have to be careful. Typically the first year or two on a TV, for instance, might already be covered and the first year is definitely a rip off. Things like camcorders might be worth it, but not a digital camera. I'm on my fifth digital camera, and all the old ones still work. If you buy a Panasonic combo DVD burner/hard drive BUY an extended warranty because these things crap out all the time it seems.
Having sold high end audio in the past, these extended warranties were indeed a profitable item.
don't buy a non-manufacturer warranty
Generally speaking... I would not suggest the purchase of an extended warranty on any electronics item or appliance. But, my position is starting to change ... especially after seeing the poor quality of components and manufacturing that is going into the new equipment.
A few months ago, I ordered a new HP laptop... dv6255us... had it built to my specs. After about 6 months, HP had to replace the a/c adapter. After 8 months, HP had to replace the battery. And now, ten months into ownership, I'm going to have to send the machine in to have the screen replaced under warranty.
Obviously... if I had to pay for this work outside of warranty... I'd be deep in the red.
I have the option of extending my warranty on the laptop up until the day that the original warranty expires. As you can bet... I'll be doing just that. HP wants to charge me $170 for an additional year.. or $270 for two additional years of coverage. As I see it... the extended warranty is likely going to be a bargain. I figure that my keyboard and mouse buttons will be shot within another 6 months. (I use the laptop 12 hours a day). And, I don't expect the battery to last any longer than the last one did. And, I certainly can't expect the a/c adapter to last beyond a year... based on my prior experience.
Contact your computer's manufacturer... see what they can do for you.