Home audio & video forum: Extended Warranty.........are they worth it????

I could buy an extended warranty only if it's for replacement or if the price really worth it.

I got an EW from gamestop for a psp ( 1 year), and the idiot told me it was repleacement, thing that is hard to read in the receipt because is all codes and little names. I asked recently in naother gamestop store about what covers..what i heard made my heart beat fast, lucky the device still works like day 1. So my 2 cents..ask, ask before making a bad move.

If you do as I do, (usually) recommend generic hardware then the time and effort involved in arranging a warranty claim far outweigh the cost of replacement hardware.

Here in Canada when I was searching for a new TV I found that in almost all speciality stores the E.W. was way over priced compared
to the same products in the US. Some places were as high as 1/3 to 1/2
the price of the TV (42" Plasma in my case).
Unlike Wal-Mart in the US, Wal-Mart Canada does not offer any E.W.
They will do the 90 day exchange for defective products like TV's
but that is about all.
Also I have not found any company in Canada that will do an E.W.
except at the time of purchase or in the case of quite new cars the dealer of the same make/model will but that to is way too rich for my blood!
My vote is no on this topic!

The fact is, its the retailer who benefits the most...and its all about expanding their margins in an already tight-margin market. Don't feel sorry for them, though, their salespeople get rigorous training on preying on the buyer's fears, just like the insurance industry as a whole.

IF THE PRODUCT IS MANUFACTURED WITH A DEFECT IT WILL MOST LIKELY FAIL IN THE INITIAL WARRANTEE PERIOD.

I have installed thousands of A-V receivers, TVs, VCRs and CD/DVD players since I started doing it professionally in 1988. There is not that high of a failure rate, and like I said, when gear is bad, it shows its ugly head pretty quickly.

So buy with confidence and find amusement in the tactics sales staff use to try to get you into that extended warrantee! It can be fun...for a second.

It seems all of these posts are relying on personal experience point of view. Well I say that's dumb. Think about it from the retailer side. Reasons...

1. Quite often 10% of extended warranty purchase price goes as commission to the person that sells it, including a lot of places that normally pay no commission.

2. Retailers have countless hours of training on how to sell extended warranties. I mean ridiculous. They spend more time training extended warranties than all of product knowledge.

3. Salespeople get in trouble for not pushing warranties. Some so far as to get fired.

My point then is if it is that important to retailers to push these things the margin on them must be huge. Anytime you buy something at a way inflated margin you lose. So no, absolutely never should you buy an extended warranty. Frankly anyone that does is dumb, gullible or both. Which makes sense... I always managed to sell above the 10% minimum attach, and I'm pretty sure 10% of the population is dumb and/or gullible.

Every electronic item I have bought..well almost..has bit it. High end, bottom end it didnt make a difference. I buy them and I use them! If its new technology def. get it. And the old technology seems to be getting made worse to fit an affordable market.

2 situations that happened to me. Dell laptop with a 2 yr extended warranty. In month 3, the video card goes out and fries the motherboard. Called Dell and they indicated that a DHL rep was going to come to my place of employment to pick up the laptop on Monday. DHL driver gives me a box with foam cushioning the laptop and in 4 days, my laptop is back and I'm able to complete project for customer.

Not one like of problems with Dell laptop since then but the "insurance" was there knowing if something went wrong, it would be repaired.

Now the bad situation. Bought a desktop with 3 yr extended warranty from Best Buy previously to the Dell laptop. 6 months later, a virus hits my machine and reboots my system like crazy. The motherboard shorts out. Take desktop to Best Buy for repair but am told this desktop gets shipped out to LA to some huge facility for repair.

8 weeks without a computer because they send it to a generic shop that just repairs computers on an assembly line. Meanwhile, I need to work on project, so I get a Dell (see above story).

10 weeks later, desktop comes back and while setting up the computer (old USB 1.0), I boot it up and the motherboard goes out again. Goes back to Best Buy and I am told it's going to be another 8 weeks. Upset as heck, they offer to take back the system and go buy another one for the same price. Well, prices went up for new system and there's no way I can match what I had.

Sales associate even offers to give me a copied (pirated) version of MS Office ... which I later contacted Microsoft about this.

Ended up getting credit for what I paid on the system. Contact Dell Small Business Dept and they offer me a desktop system as part of a lease deal (hint: tax advantages) with extended warranty (at home service and periodic checkup).

I currently use an HP zd8000 and the extended warranty is now over but I had insurance knowing that if this system ever fails, HP direct would be there.

Why I'll never buy another computer or high end electronics from big box stores. Read the warranty terms and ask dumb questions.

I wouldn't buy a big screen without it and would in fact measure carefully where you buy your tv because extedned warranties vary greatly. If it includes lamp replacement than the cost of the warranty practically pays for itself from this alone. My Mitsubishi had so many problems but Ken Crane stood behind it (I needed help from Ken Crane because their warranty company was difficult at times) and now my TV is from Best Buy who seems to have a good plan as well. Without it if something goes wrong it can cost you significantly and new technology is not as reliable as they might lead you to believe.

"Your first reaction is to say no, but the salesperson starts going on and on about the benefits and the things that could go wrong with the product."

I always wonder, when the salesperson starts going on and on about the things that could go wrong... I start to wonder why I am buying this product in the first place if it is so unreliable.

If you buy an extended warranty do not buy it from the store, when you open the product manual the manufacturer offers it also, and often cheaper. If the product ends up being a lemon, there is a record of all the problems that the manufacturer sees that can bolster any claims.

I bought one for a Toshiba laptop -- a total lemon. I was using it for world-wide work and needed the security of repairs. It ended up that the machine was in the shop for a total of over half the time of the extended warranty. After the warranty expired, they returned it and it went bad within 3 months. Because it was a third-party warranty, Toshiba had no record and the warranty company would not supply the history.

Think of the cost of the extended warranty, what percentage of the purchase price is it? If it is 10% of the cost, that means that they think that 1 out of 10 will need full repair during the duration of the warranty. Are you willing to gamble these same odds? Check out online the repair record of the product and stay away from products with many complaints.

Electronics should last a long time without problems, but these days the quality seems to be so shoddy. If enough people track the quality of products before they but, maybe manufacturers will be more conscientous about the quality of the products they sell.

Since the profit margins on electronics is so small to retailers, they put a big bonus in their pocket on extended warrantees. As for a computer, if something is going to go wrong it will most likely occur in the first year. I have not purchased thousands of bucks of electronics from a "Brick and Mortar" for more than 10 years. I buy online and don't get the hard sell on extended warrantees. My last experience with a cell phone in 1997 ended my retail buying. The sales rep didn't understand "NO"--I walked out without a cell phone. There's an old saying, "You don't build a $50 fence around a $5 cow".

I buy many things for myself and clients - as I run a small computer consulting company. I find I will purchase extended warranties on big ticket items such as TV's, Fridges, Stoves, Computers etc; items that have a large repair/replacement cost. This goes double whith client computer purchases as I will be the one with egg on my face if the systems fail just after a year of use (laptops are notorious for this).
I think it takes experience and research with products that you are intending to purchase to know whether it is worth having the warranty. I purchased a fridge about 2 years ago and with the knowledge of a repair person/friend of mine, they suggested the warranty as the newer fridges maybe more efficient BUT the motors/compressors are not as strong/sturdy as a fridge say about 20 or so years ago. I'm glad I purchase a 3 year warranty since the fridge had a leak which could not by fixed (as fridges are now sealed units) and had to be replaced - that would have been expensive - not to mention the cost of the repair person to try and fix it in the first place ($280) - all under warranty.

Jim

After buying a PC tower at the local BestBuy Store, I signed up for the extended "In House service warranty". Upon getting home, and hooking up the cables and firing it up, I found out that the DVD rewriter was DOA. OK so I call best buy, they tell me to call the manufacturer.... So I did, they tell me to take out the DVD and send it to them and they will replace it, but not before charging my credit card ANOTHER 75.00 to insure that I sent the old on back (they were going to send a prepaid shipping label, so why wouldnt i?) I guess I missed the small print that says that YOU put a deposit on the defective part, and when the new one comes, you install it yourself. A week later I had a working PC. It was also the last time I would ever even CONSIDER any type of extra store bought warranty.

A while ag I bought a refurbished camera and I felt (no solid evidence) I should buy the extended warranty. Guess what? The camera failed and I have a whole Alaska cruise set of pictures with a blurred spot. As the camera was not available any more I got a full refund and decided to buy a new (really new) camera without the extended warranty. That camera (a Panasonic) served me outstandingly on a cruise and a trip to Egypt. I guess I made the right decisions in both cases.

Constant luck to all of you!

With an extended warranty what you are buying is really better called insurance. Extended warranties are pushed by retailers and even some online sites because of their high profit margins. The retailer doesn't generally insure them themselves, but often it is through a third party that also plans to profit from your purchase. That being said, for me I have to decide if the peace of mind that comes with an extended warranty is worth me giving a premium to those that are selling it.

For most consumer items, I don't believe that they are worth it. I don't believe that I can beat the professionals that are evaluating the risk and setting the price. I believe that they will pay out considerably less than they take in on these warranties, so for me to come out ahead I have to beat the odds, and do so consistently.

That being said, I do buy Insurance regularly for some things. I can't afford to replace my house if it burns down, so I buy insurance. The same with a new car. On the other hand, if my kids car is only worth $2000. I will risk them totaling it instead of paying for that coverage.

There is also the significant issue with electronic items of future value. For instance, I recently priced a laptop online that was about $800. A four year warranty was about $350. Unless it were to break in the second year I figured that I would lose out. Why? Because in three or four years, I will be able to buy a better laptop than this one for that same $350. So even if I get "lucky" and I get a new laptop in 3 years, I really didn't do better than if I had just kept the money in the first place, plus I don't get to pick the next laptop and apply the $350 to what I want at that time.

It is all about risk tolerance. Can I buy a new iPod if mine breaks 366 days after I get it? Or would I rather prepay $50. for the next one just in case it breaks in the window between the manufacturer's warranty and the extended coverage.

The answer is a little different for everyone, but on average if you put the money in the bank instead you will come out way ahead in the long run.

Anyone want to discuss the pros and cons of buying a time share...

Did you ever bring up a sore subject asking about the worth of Extended Warranties!

I spent almost $5,000, including $300.00 for a two- year extended warranty, for a 52" Mitsubishi (Diamond) TV (from the Big Screen TV Store in Sterling, VA, headquartered in Baltimore, MD). Over two months ago it stopped working and I have gone through hell trying to get it repaired under my still active Extended Warranty contract. As of this writing it has been out of service for 62 days with no end in sight! That includes the entire football season and most of the great Fall TV shows. The Christmas shows and New Year Bowl games now appear likely candidates not to be seen as well. Oh well, I can watch all these, as I have so far, on a much smaller TV set.
After being referred to a Warranty Service in Texas (the TV Set and I live in VA!) and being lied to, ignored, and treated like I was dirt by that Warranty Co., including being required to fax them 10 pages of sales receipts, warranties, etc. THREE TIMES. Each time a different person would answer the phone, have no record of my previous calls, claimed they never received my Faxes, it took over a month to learn from The Big Screen TV store that they erroneously sent me to the WRONG Warranty Companyone they use now but werent using when they sold me MY TV set! Wouldn't you think that "wrong" Warranty Co. would have known that long before ME telling them that after was I given the name of another Warranty Company by The Big Screen TV Store?

Calling the "new" company (this time one in MD) I was told I did not have a two-year warranty but only ONE! After two days of calls from me back and forth, and numerous emails, did the "new" Warranty Co. call to say they were "mistaken" and that I do indeed have a two-year warranty. Meanwhile I called a THIRD Warranty Company (this one in VA) given to me by the Big Screen TV Company, and three weeks ago that new company sent a repairman to my home. I told my wife Hurray, finally Im getting it fixed. Im afraid I was still prematurely hopeful! He took the entire set apart testing etc., then put it back together again. When I asked him what the problem was he said it was an "electrical part," adding they didn't have it in stock and would have to "order" it.
Letting a whole week go by, on Nov. 26th I called to ask the status on the part. I was told Mitsubishi was shipping it on Nov. 29th. That day and the following week came and went. On Dec. 4th I called again and was told it was estimated to be shipped on December 6th from Chicago.

I'm still waiting. The two-year warranty expires in January, which is probably when they will have fixed my set.

This has been an intolerable and inexcusable experience that I wouldn't wish on anyone. Certainly not the way the Warranty contract was explained to me by the Salesmanyoull get it fixed if anything happens to it or well give you a new one, he said. Ironically, the repairman told me the same thing!

The Headquarters of the Big Screen TV store should have sent me a new TV set after one month of waiting, fixed the old one and sold it as a second hand set.

Stay tuned to see IF the "part" (chassis they call it) even works! If it doesn't, I will start numerous Letters to the Editors of my local newspapers along the lines of this story, including the Better Business Bureau, the FTC, and anyone else I can think of. I may even have to picket the TV store with a sign lamenting my horrible experiences!

I am going to copy your article and this response and send it tonight to The Big Screen TV store and to the Mitsubishi Corp. (who I previously emailed and never even got a response from them). At this stage I wonder if they even care. Friends have been advising me to get an attorney and/or take them to Small Claims Court. That is another consideration and bridge I will cross if necessary.

So I'll leave it up to individual readers of this story to determine for themselves the answer to your question: Extended WarrantiesAre They Worth It?"