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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Almost always, no!
About the only thing that would justify an extended warranty is if you are buying something that you could not, under any likely circumstance, afford to have repaired if it should die. Insurance companies are not in the game for their health, they make money on these warranties, and a lot of it. Sure, you might be unlucky enough to encounter one particular piece of equipment where the long term warranty paid off, but the odds are heavily stacked against it. If you make a habit of buying long term warranties you almost certainly will spend more than repairs on any one, or even two or three, items. Insurance should only be used to pay for catastrophic expense. Anything else is just a waste of good money.
Never a good ideal
It's a probability game. What is the probability that an item will fail? Industry standards would suggest 3-5% is an acceptable amount of defects. Does the warranty cover accidental damage like a remote thrown in anger, cell phone taking the deep six in your favorite beverage or toilet? If it does then it may be bargain b/c I dropped my cell in plenty of liquid over the years, but managed to never buy a warranty. All that to say, it's purely profit for the retailer.
Dave Ramsey quoted some statistics, specifically in the new car buying industry that says that almost 80% of all dealership profits come from extra options added on at the end, and guess what? Warranty.
Manufacturers worth their weight in salt will stand behind a product during it's warranty life cycle. If you just save up ahead of time for emergencies and always pay cash for an item, you are more likely to say no, with a smile, to the next salesperson that tries to offer the warranty. Personally, being an IT manager, the warranty process for busted hardware was so much more of the hassle to get honored and in place than just ordering a new part and doing it myself.
For some things, yes
For years, I've told friends who ask me (and I tend to be asked) that there are three things I think should be given this coverage: laptop computers, digital cameras, and LCD monitors. (I don't try to answer for home entertainment.) Nowadays, as prices have come down and installed base has gone up, I'd go without the coverage on the lower third of the price range on the cameras and monitors. But, laptops are evil and I wouldn't go without coverage there. There's so much crammed in there, with heat issues, vibration, and the models and components and configurations change constantly. You can get a lemon from a premium brand.
yes a scam, but it is worth it
I know the extended warrenty pitch is coming and I am generally ready to buy it anyway on products that are worth over about $500 but I act reluctant and ignorant with the sales person and usually because they are desparate to sell, I get a discount. Dozens of times over the years, I have brought back computers, monitors, digital cameras and camcorders for fixing, and on three occassions for replacement. The thing i like about them is the peace of mind and the fact that mostly everything is covered. Sure, it is a bit of a cash cow...but is it not better to just return your laptop to the store up the road and get a few hundred dollars worth of repairs, rather than going to the bother of packing up your laptop, bringing it to the post, sending it registered mail (and paying for it) then waiting months from the manufacturer only to be told that it is not under warrenty and such and such will cost so much to fix?
I purchased a 52" Toshiba DLP from Sears and purchased an extented warranty at the same time. I am glad I did as 1 year later the projection lamp blew out. I called Sears and Toshiba and Sears sent out a tech and later sent me a new lamp as did Toshiba also. I have two back ups on hand now but haven't had to replace the one that Sears sent me. The cost of the lamp and the service call would have been over $400, but the extended warranty covered everything. The cost of the extended coverage was $300 for three years, so I feel I have received the best of the deal so far. I guess it depends on how much it cost for the original product and how much the extended warrenty costs. In this case I feel it was worth it.
I love my Mitsubishi DLP TV but a weak point is the light bulb. I've had mine replaced twice in 3 years. Both of these replacements have been done under the extended warranty that I purchased with the TV. Bulb replacement was pointed out when I bought the set and if you have to shell out of pocket for one, it will set you back around $175. The extended warranty costs $150 for 6 years so I've already made my money back and I still have 3 years to go. This one worked to my advantage. One thing is true. The number one objective of any business is to make a profit and companies that sell extended warranties must have customers that never use their warranty. I've gone both ways but I have to say in the long run, they are worth it.
Extended Warranties...SAVE YOUR MONEY AND TIME!
I almost never buy extended warranties. However, when I have bought them, I've found them to be laborious, highly inconvenient and definitely NOT worth the money. Here's why. If you use something enough to view it as a necessity and think that you would want to be warranteed against it not working when you need it most, then you'll be in a for a rude awakening when you try to utilize the warranty. I purchased an extended warranty for a laptop (one of the few items experts recommend considering purchasing an extended warranty for). My Toshiba laptop broke (the battery would no longer charge because the connector pin had come loose due to poor sautering) and when I went to return it to Circuit City to repair, I found that there is virtually NOTHING that they can do in house to make computer repairs. They told me it was covered under warranty and they would send it back to the factory. Estimated time to repair? 8-10 weeks. I can't due without a laptop for 8-10 weeks. Also, they told me I should buy a data recovery warranty (another 60 dollars) in case I lose any information on the hard drive when the factory makes the repair. FORGET IT! I bought another portable hard drive and transferred the data to the new hard drive. I turned in the computer for warranty work, and proceeded to go buy a new laptop anyway. The old computer was repaired and lasted another several months before having the pin come loose again. Warranties are a scam, repairs are not timely and do not respect the immediate needs of the customer, and it's another way for retailers and manufacturers to get you to PAY OUT OF POCKET for poor quality control. It's a profit center and a financial incentive for manufacturers to make shoddy products. The only extended warranty I'll buy will be built into the purchase cost of the equipment and will be backed up with reputation for producing quality in the first place. Buy the better product, pay a little more money for quality, and hopefully have piece of mind knowing you bought the best from a manufacturer that produces quality.
Depending on the Product.
For things like laptops which could be very costly to repair, I think extended warranty is totally worth it. I personally had problems with my laptop just after a year, but the extended warranty allow me to get a slightly better model for $100 less. Even before the manufacturer's warranty is over, people at BB treats you better when you have their extended warranty.
That being said, I just purchased extended warranty on my AV Receiver(5 yrs), speakers(9 yrs), and Cable STB(3 yrs). I don't know if I made a good decision, only time will tell... but for an extra $10-13 paid a year for each of the three things that I purchased, I think the peace of mind is worth it. And if they break down during those years, you'll get a newer model!
They're worth it for _some_ items
In my experience, extended warranties are good things if you're buying a laptop. And according to Consumer Reports, they're good to have if you buy a DLP TV (much higher repair rate than LCD or plasma screens).
But aside from those types of equipment, I wouldn't bother with extended warranties.
Definately worth it for a laptop
Just chiming in that extended warranties for a laptop are well worth it. The average batteries for laptops are only good for a little over a year if constantly used and definately won't outlast a 3 year warranty.
So basically the price of the warranty will cover the cost of the inevitable battery replacement plus anything that else that could go wrong with it within the 3 years.
Good for High Tech
I never used to buy extended warranties since things used to last forever. And from the way the salespeople pushed them, they obviously made lots of profit.
But I've had good experience with the "I want a new one" type warranties sold by Best Buy, Office Max, and Staples. Basically, they promise to repair or replace the item or refund your original purchase price if the item goes bad (your call) within the extended period. Since most Technology items won't be around 2 years from now, they won't be able to test or replace them, so you get store credit for your original purchase price and can buy something newer and better (at a cost of about 15%.)
I'm on my 3rd cordless phone system ($800) and 2nd printer ($300) using this. Only gotcha is you need to have the original receipt in hand to read them all the transaction numbers. So register online or scan the receipt (in case it fades) and write the warranty expiration date on a calendar so you won't forget it!
depends what it covers .. for example at b&h photo they sell the sagemax warrenty it covers far more than the manufacturer covers including dropping from handling say you bought your shint brand new digital camera it drops or bangs into something now the lens wont extend or the lcd cracks sagemax will fix it or send you a check for the amount you spent on the camera or other electronic doodad
the company behind the service plan is called NEW or national electronic warrenty .. the same people behind the walmart plan or best buy .. each store that offers it has their own coverage worked out with new .. so the walmart or best buy or b&h photo plan are not exactly the same exact .. even though the same company is behind them
Yes, on some items....my digital camera experience
I bought it on my Nikon D40 d-SLR. The retailer, Ritz Camera, basically covers everything with their plan.Right after I bought it, I made the mistake of changing lenses on the beach in Florida while down there on a long weekend. Of course, I got dust on the sensor. Live and learn! Rather than to have it out for service for weeks, and as it was less than a month, they gave me a new body. The next time, I got dust spots in the viewfinder-they sent it out. It came back, supposedly set, but then the spots reappeared. Once again, they replaced the body.
For the heavy use this wonderful camera has seen, in my opinion, the extended warranty more than paid for itself. Just make sure your retailer does indeed have comprehensive coverage, such as accidental dropping, cosmetic damage, etc. This is more likely available at a specialty retailer, and costs a few dollars more. But typically covers a LOT more.
Third party warrantees make the insurance company rich.
Because, especially electronic products, the technology is advancing rapidly repairing or replacing an older product does not make much sense. Most products come with a manufacturers warrantee of 90 days to one year to cover initial failures. By the time the manufacturers warrantee expires you will want the new technology.
I have bought 2 in my entire life and both on cars. I am reminded of 2 sayings 1) "There is a sucker born every minute".
2) "A fool and his money are soon parted".
When it comes to electronics and the like, it is a waste of money. Instead, open a savings club at your bank (like a Christmas Club) and put in a bit of money each week. In that way, if it dies an early death, you will have some money put aside to buy a new one or have the old one repaired. And as a bonus, YOU earn the interest on the money!!
Think About It
How many computers, cameras, TVs, and other electronic products have you purchased and how many have failed after the manufacturers warranty has expired ? Very few I'll bet. A risk well worth taking unless you are purchasing a product costing several thousand dollars. In my opinion at least.
Laptop computers are good candidates for warranties
I've purchased extended warrantees for a few things in my life, and mostly not purchased them. But the warranty that was really valuable to me was the one for my laptop computer. Just before the one-year manufacturer's warranty ran out, my internal wireless adapter failed and I sent it back (free postage, free packaging) for an entire system board replacement.
I had the notice on my desk to purchase an additional year or two but it got buried and by the time I got to it, it was too late. So now I just keep my fingers crossed.
For a desktop you really don't need a warranty - parts are interchangeable and fairly easy to replace. But laptops are really hard to work on, and if you're not real experienced you risk damaging other parts, or not being able to put it back together. Plus they can be expensive to begin with.
For inexpensive items such as digital cameras, forget it. By the time your warranty runs out, they've got a better, cheaper product. An expensive state-of-the-art model might be worth insuring, though.
In Home AC Warranty
I never buy the extended warranty on any home audio, tv or video products, but I do pay a monthly insurance fee for my Dish Network. I had a DVR go out twice when I was with cable. For a small fee
of $5.99 a month it's completely covered with Dish Network. That covers all 4 receivers and the dish.
When I bought a house that was only 1 1/2 years old the seller added in a home warranty for one year covering all the appliances including the AC.
When the warranty ran out I figured what could go wrong with a house the was only now 2 1/2 years old so I passed on the $425 renewal fee that was offered to me. Guess what? Six months later the AC went south to the tune of $1,190 bucks. That's the one time I wished I had taken the offer to continue the warranty! It's always a crap shoot.......when you don't have it something will go wrong!
I never use to buy this extended warranties before but the way our items are made anymore and where they are made--they are made to be thrown away in just a few years and the workmanship has gotten so terrible, I now buy the extended warranties. they just do not make them like they use to----example: I have a GE washer and dryer that is 26 years old and never missed a day--my service man tells me only a few appliances anymore are worth carting home and he works on all appliances. pretty sad when we have to contend with such poor workmanship and pay good hard earned money for crap.
$$$ for warranties?
I remember when warranties used to be FREE. It always hits me wrong when I'm asked to BUY a warranty; having to pay for a warranty sorta tells me that whoever is selling me the product KNOWS it's gonna bite the dust sooner or later, and they want a warranty fee to keep their profit margins as stable as possible, when someone comes in with a warranty claim. But, I've gone ahead and bought an extended warranty for this here laptop computer. Call me crazy, I guess.
i was and is not useful
Thanks gay for this publication and i bought a car 1 year ago with and extended warranty but i cancel it and now every day my phone has one call for somebady who wants to offer me an extended warranty hwo can i know if my car still has a warranty from the construction company or ia don't know how that call my car is in very good conditions and i think that extended warranty is a hassle from a dealer to the costumer
Several years ago we purchased a 52 in RCA projection tv..while we were paying for it the salesman became very pushy about an extended 3 year warranty that cost about $300..he said the tv had a one year warranty..we asked if we could get it before the end of the year..He said no..you have to buy it now..We said no. Later at home I was reading the warranty which turned out was a 3 year warranty. We went back to the store with the warranty to show the owner..He got very indignant with us..said we didn`t know what we were talking about and to leave his store..The next day I called the head office of Thompson Electronics (where RCA comes from) told them of the situation..They thanked me and said they would get back to me..A week later they called to said they had taken care of things..that the dealer would never be doing this again and thanked me for contacting them..Next time we drove by the store..the name was changed and they were no longer a RCA dealer...So please people be careful...and make sure you read your warranty before you make any decisions...Who knows how many people were suckered into paying out that $300. Good profit for the store if they get away with it..:)
It's all about Risk
Insurance of any kind is all about reducing the degree of risk that you face. The need for any kind of insurance is directly related to how much risk you CAN bear. Auto insurance is a great example. You can buy coverage with no deductible or a much cheaper policy with a $1,000 deductible. The more risk that the insurance company accepts, the more that you pay. A large deductible reduces that risk and the premium needed is significantly reduced for the insurer to make their profit. Here's the catch though: if you have an accident and have a $1,000 deductible YOU have to pay that first thousand dollars yourself. Now if you can pay that amount out of your checking account without trouble, then you made the right choice... saving much money. However, if you live paycheck to paycheck you might not be able to pay that first $1,000 and your car doesn't get repaired and you have no transportation. In this instance, you made a very poor choice.
Thus, when confronted with a decision about any kind of extended warranty, you have to ask yourself a simple question: "If this appliance breaks, can I afford to just replace it or pay for repairs?" If you can, then you don't need the extended warranty. If you can't, then getting the warrant makes sense.
Over time, you will pay far more for extended warranties than you will ever possibly recover. That is why selling extended warranties is so lucrative for the stores and why they push you so hard to buy them. So, if you can afford to repair or replace your product in the event of failure, then always reject the extended warranty offers.
Here's another suggestion. Take the money you would have spent on the warranty and put that amount into a "self insurance" savings account. Then if you ever do have to replace something, you will have the money saved up to pay the expense. In essence, you will be your own insurance company and will pocket the profit for yourself.
And that is the simple truth about buying any kind of insurance, even for big ticket items like car or homeowners insurance.
No, No, and More No
Simply put warranties make money for the store.
If you add up all the yes and maybe answers they would not total the amount the comes in from how much they are costing consumers.
Yes, hi-tech TV's are now in, and the uncertainty of technology is in our face, but most electronics have a year warranty and if anything will go wrong it will be in that year especially computers unless we do it ourselves.
TV's technology is moving so quickly that you probably will change your set in 3-5 years anyway. MP3 players and camera's don't waste your money.
The $100.00 - $600.00 is better spent on your family, another tech item or investing!
nothing for me...
after I got married we went out and started getting new appliances as most people do. we were offered an "extended warranty" I looked at the papers and started thinking... if I get it for the fridge, stove, freezer, tv, stereo... man that would cost me a fortune. so I decided then and there that I would never get it. if I had bad luck and got 1 bad item, now and then, not getting the constant extra coverage would more than pay for replacing it. I'm now 44 and have purchased my share of electronic goodies. I have never had anything die where an extra warranty would have helped. I have had things go in the first year... but never between 2 and 3.
Never, no never
When the sales person asks about the warranty, I always say that I have saved far more than the price of the product by never buying one. I know that there are certain electronics that even Clark Howard might buy one for, but I rely on my past decisions to pay for future repairs.
My other response is that if the product is not expected to do well, then why am I buying it!
For about 30 years I have been saying NO with little or no product failure.
Yes. Worth it to the Vendor
I just bought an iPod at Best Buy and got a serious full-court press on the warranty. Right down to the check-out guy who said "so you'll take the warranty?". I responded "no, I don't want the fries".
If they push that hard you know there's serious margin. Number two, when I bought my plasma they gave me the warranty at less than 50% of their published price. Number three, I'm more likely to buy a warranty on newer technology that is expensive; more likely to have problems and those probs will cost more to fix.
But generally I view extended warranties like I view all insurance salesmen. Just the basics, and please don't call.
I usually don't get them.
Latest example - Plasma TV. I debated on this until I read the contract line by line and found that it had exclusions for:
Dead or hot pixels.
Screen burn in.
The two most common problems.
Example #2 - I did buy one when I bought a BOOM Box for my 11 year old. She trashed it in 3 months and I got it fixed twice in the warranty period.
One other point - a "Two Year" warranty is usually a ONE year extension of the manufacturer's warranty.
I bought a high end dishwasher and decided not to get an extended warranty. The average life of a dishwasher is 10 years so I felt it was un-necessary. Sure enough, 2 years and 3 mos later the heater and thermostat went out and the replacement cost was $400.00 for a $600 dishwasher. Looks like I will buy a new dishwasher with the extended warranty for an extra $100.00
My daughter bought one on an HP laptop, and it was worth every penny, as the machine has been to depot-level service TWICE within the first year she had it.
Personally, I've never bought them--but then, I've never purchased an HP machine, desk- or laptop.