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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The House always wins
A close friend is the IT head for a major player in this field. She never purchases an extended warranty. Why? simply put, the compnay selling these warranties has very extensive databases of technologies and breakdown ratios. They are set to make a profit, from peoples fear of that "outside the normal" event.
So, it is very similar to betting in Vegas against the house. Sure, you can win, and sometimes big. But overall, that money goes to make big pockets even bigger, as a whole, consumers lose.
Applecare for Ipod and Macbook Pro is the best investment you can make. The Genius Bar has serviced every Ipod my family has owned. Anytime something goes wrong they are there to replace it. The Macbook Pro service has also been excellent. Aside from the yearly tune-up, they are there to replace, usually without question, things like the optical drive or the battery. Appointments are made on line, and service is done at the Apple Stores, which in New York is very convenient. Waiting time is usually at a minimum, and you are usually in and out in less than one half hour. I have been more than satisfied with Apple's service and have found this to be a good if not great investment for these products.
Yes in many cases they are worth it!
I am one of those very people that you spoke of who do offer the warrenties on products when customers make a purchse. I offer them because I do see a value in them. Maybe I should not mention retailers but Office Depot and Staples both have what they call a "replacement warrentee" I offer them on printers every chance I get! Basically it is purchase price back when it breaks on the second or third year. I have been in this industry for about four years now and litterally see consumers using their gift cards to purchase new printers all the time. If you buy the warrenty on nothing else get it on your printers.
I always recommended NOT buying extended warranties - they are almost PURE profit for the sellers. But often these are backed by a third party. In four cases, my purchase was WELL justified!
Years ago, I was driving my 1986 Ford Escort GT on the highway, when I saw a fan belt go tumbling away in front of me - and all my engine warning lights went on. I took the car to a dealer and found out that the alternator housing had cracked, the bearings had seized up, and the serpentine belt had melted through. When the Service Manager brought me the bill for almost $300, I remember how his face fell when I said, "Oh, but I have an extended warranty". When he brought me back an invoice with $0 on the bottom line (and looked really pissed off!) I was very happy with my purchase!
More recently, we bought a Frigidaire MONSTER sized refrigerator and got the extended warranty cheap as I got the employee discount. 2 years later we went through a series of FOUR repairs to the ice maker ending in a full replacement of the logic board - at NO charge.
I also had a Sony A/V receiver replaced at no charge, and a Samsung LCD monitor replaced at NO charge.
Rip-off? I used to think so, but if the price is resonable, I'll take the extended warranty now!
I just recently left a job working at Best Buy as a "customer specialist" in the computers department. I must say that extended warranties on desktops or monitors aren't the most wise purchase in the world. I do, however, think that purchasing the extended warranty on a laptop from Best Buy is definitely worth the money. With Best Buys warranties, all of the 2 and 3 year accidental or non-accidental warranties, you get a free battery with it. Batteries for laptops are not cheap as most people know. Even the cheapest warranty, which depends on how much the laptop costs, still comes with a free battery. The cost of the battery alone is usually more than the warranty so that right there is a good deal.
The thing with the free battery, however, is that it has to "not be holding a charge" anymore. You can claim that it is not doing this after 6 months. The good thing, however, is they don't check if what you say is true because they don't know how long the battery lasted for when it was new so they just have to give you a new battery when you claim this.
Also, with the warranties, if Best Buy cannot fix your laptop, they have to give you a brand new laptop. Whats nice about this is that if they don't have that laptop anymore, they will give you a laptop that is the same price. As we know, technology changes quite quickly and you're going to get a better computer than what you had.
Obviously people could take advantage of knowing that and having an accidental warranty. Especially if they have the 3 year warranty and their computer is completely outdated. *wink wink*
Also, with the warranties, parts and labor are free, and hardware diagnostics by geek squad is free.
Actually everything that I just wrote is what I used to tell customers. I do actually think the extended warranty on laptops from Best Buy is worth it. Hopefully I will be buying a new laptop within the next few months and if I buy a laptop from Best Buy, I will buy some sort of warranty just for the free battery.
Maybe yes & maybe no
I typically do not buy extended warranties. However that being said the ones I have bought into have worked out pretty well. My Sony KDS R50XBR1 50" TV needed service after 1yr 4months. A new bulb & light engine assembly according to the tech that came by the house would have set me back about $1000. Wow ! Covered my expenses & then some and I still got 3+ years on the warrantee. Thank you C.C. for selling me this. The tech said he goes through about 20 bulbs & 6 light engine per week (wonder if ne meant per month) He felt all projection TV's (DLP, LCOS, etc) suffer from the same problems (bulbs & light engines) Still sounds like a lot of breakdowns. Think my next TV might be a new LCD in the future after the warrantee expires. Since this is a AV forum I won't mention my 1yr 6month Amana refrigerator from Sears w/extended warrantee. Saved me $700 for a new compressor. Or my reconditioned Brother laser/fax from Comp USA which they refunded the full amount after the 3rd attemped fix. Sweet. After all these issues I still will be very judicious in the purchase of extended warranteees. Hmmmm...I need a new stove. If it is one of those high tech electronic controlled ones I might buy an extended warrantee. Everything seems to have IC chips in them now days. I wish stuff would just work sometimes...Ya know ?
Extended warranties Rock!!
1st notebook, developed blue line on screen, Staples warranty replaced it with brand new one. (Purchased used from them originally)
Another hp notebook, extended warranty from Staples, tech repair center couldn't repair it, replaced with new one, I only paid for the extra features I wanted. (Notebook was over 2 1/2 years old.
Another hp notebook, extended warranty from Staples, near the end of the year, I needed new battery, wouldn't do it, cancled warranty fro complete refund, pur hp warranty, refunded ALL of my charges, incl. warranty cost after 3 years, purchased brand new Premimum hp notebook
It depends on who you are and your ability to fix things....
If you are buying a computer and you are NOT technically savvy, you should invest in the Service and Support plan. Manufacturers often have Limited One Year Warrantees and you could wind up paying out of your pocket for repairs or support... If you can repair your OWN computer, you have to ask yourself, how much is the Extended Warantee and how much is the Cost of Replacing things that usually fail... If your computer is an ALL-IN-ONE (Like a Sony or some HP units) you are going to want to repair this unit, because you lose the Monitor as well as the CPU. In the case of LAPTOPS, its Usually a good idea to get an extended warantee if you are buying a higher priced unit. Laptops will last LONGER than desktops, as they become Obsolete only when they no longer can provide the TASK you purchased them for in the first place. So, since a Laptop will be with you for at LEAST 3 years, there is a chance for a Hard Drive Failure. On some laptops its easy to replace the drive and on others its a real challange.. Do your homework. Again, it depends on who you are. A Laptop repair out of warantee is gonna be an expensive ordeal... Other Products, well, a rule of thumb I usually use is if the cost of a 3 year Service/Replacment Plan is more than 33% of the cost of the item, I don't buy them... If its 20% or less, its a good gamble on a complex item, one that is not obsoleted in 2 years... So, if its on that MP3 Player, I am probably gonna buy a NEWER Model after a year or so anyhow....
So, it depends on who you are and how much it costs...
yes no maybe. Never again for me!
I gave in and purchased a Square Trade extended warranty because I was buying an older laptop. When I called with a claim for a broken hinge that guillotined the video cable, they cancelled my policy without even so much as a 'nice screwing you: screw you next time' Well, you can bank on I shall never allow myself to get into that position again. Heck I didn't even get a reach around!
wile e coyote
Positive experience with extended warranties...
I recently had a positive experience with an extended warranty. I purchased a laptop about 3 years ago and opted to pay the extra $200 for an extended warranty. While I owned it, I had to send it to the manufacturer once and I had to carry it in to the store to be repaired 4 separate times. Per the no lemon policy offered by the store, I had it replaced a few days ago. Without having to pay a dime, I got twice the computer I had before, another 3 year warranty (with accidental protection) and a store credit for the difference between what I originally paid and the merchandise/services I got upon replacement. These extended warranties offered by retail stores get a lot of bad press, but I have become a believer in them. I think they are worthwhile (especially if you are able to get some sort of accidental protection) for high dollar items such as computers and TV's. It's like purchasing car insurance...you may rarely if ever need to use it (all the while feeling as if you are throwing away money), but when the time comes to use it, having it can make a big difference in how much money has to come out of your pocket when its all said and done.
Everyone is missing the obvious!
Look at it this way: Can you really afford to buy extended warantees on everything electronic and or mechanical device that you buy? If you can, what is the likelihood that you will ever have enough claims on all of those items to ever break even on those costs? Slim to none. It's a perfect example of buying so much insurance (warantees) that you become "insurance poor". If you can't afford all of the warantees, how will you pick which items will fail to make any extended warantee purchase worth while? You got a crystal ball? NO! Enough said!
companys honored because I had purchased them.
I have purchased them and used it for a desktop and laptop at different times and with different companies. Was given an upgrade with desktop by company bought desktop from because extended warrenty company wentout of business. The other company ended up on laptop honoring warrantying laptop had 3 year warranty. In 2 years had in shop 3 times for same video complaint so after third time used Texas Lemon Law and received new Laptop at no cost.
Not worth paying for
fwiw, if you purchase with a credit card, you probably already have extended protection. Most, if not all of the major credit cards now include replacement insurance in the case of theft or breakage. Check your card terms; if yours does not have this coverage, switch credit cards. What with all the competition between credit card providers, you have plenty to choose from.
just proves how ignorance makes fools of so many
I don't buy them, never have, never well, and I've purchased computers, for music production Etc.
Considering how quickly electronic merchandise becomes obsolete, and considering how the "downward" trend in pricing still seems to be present, why would I buy a warranty that costs a fair fraction of a new item a couple of years out.
More specifically. If I really did happen to buy a computer that went kablooy at 3yrs. old, do I really want it repaired, considering how the technology has improved.
The notion that they cover all sorts of mishaps, like dropping or losing them - well that depends on the policy. That's not a given.
For a cell phone where losing one can be quite easy, it makes sense,
I have better things to spend my money on than paying for the oppty to cover a manufacturer's butt and buy insurance to cover whatever may happen, but mostly to cover merchandise that is supposed to continue working as long as it's not abused, but somehow breaks or ceases to function regardless.
They are NOT cheap anymore.
It's funny how people will moan and groan about paying tax on something, even though those taxes pay for a host of services as a society, but think nothing even smile when they are "offered" the oppty to cover a manufacturer's poor workmanship.
Hey maybe that's what the Gov't. should do, instead of calling taxes - taxes, they should start making it optional "in case your house burns down" "in case you get sick" Then people will probably gladly double the amount they paid and smile vs. when the Gov't. called it a simple worthless tax.
Extended warranty - a sucker is born every minute -- and the fact that 1 in 1000 happens to make use of it, doesn't make the other 999 any less fools.
And for those few who did happen to benefit from one of these policies, how many times have you purchased one and NOT used it. Quick add it all up - gee enough to have bought new outright anything that you may have had repaired under the policy - hah sucker. LOL
Skip the Warranty:buy high quality,durable products instead
The rule of thumb I usually use is that is makes sense to insure a product to 10% of it's value. For instance a $25 case to protect a $250 iPod makes sense as does a $25 protection plan for the iPod. But the Applecare Warranty Plan for the iPod is $53, definitely over-priced. The battery, however, in the iPod Video typically wears out within one year and is $60 or more to replace, plus your beloved iPod is gone for two weeks. iPods are fragile devices so the warranty plan probably does make sense. 5% of all iPods will fail within one year. We should, possibly, instead of buying all of the warranty plans, buy devices of higher quality. Certain brands really hold up, so buy from them(Apple not included) Also look for products that can be repaired or have components replaced instead of replacing entire product. I have previously said that Ultimate Ears Super-fi 3 ear-phones "sound great" but are "not durable enough to last along time." The cord wore out on my $70 earphones within a year. What I neglected to consider is that the cord and headphone plug can be detached with a simple pull and can be replaced for free if you have had the phones from 1 day until 2 years. After 2 years of using the headphones, the manufacturer will charge you $20 to replace the cord/headphone plug. Assuming the bud part of the headphones holds up, you can always buy new silicone and foam inserts to stick in your ears and replace the main cord whenever is needed. In this way, you can extend the use of a product and spend less than purchasing a new pair of headphones. Anyhow, extended warranties can be worthwhile if your product is damaged with an accident, like spilling water on a laptop but when priced at more than 10% of product's actual value, they are over-priced.
DON't WORRY ABOUT WARRENTIES: Buy high quality, durable items: Casio G'Z One phone can survive 3ft of water, probably the most durable phone on the market, the Microsoft Zune comes encased in thick rubber and does not need protection(except for the large screen), Olympus Stylus 770SW camera is waterproof to 33ft,crushproof to 220lbs of pressure, freezeproof to 0'F.,and shockproof for a 5ft drop, Casio G'Shock watch is solar-powered, can survive a 2 story drop and is waterproof to 20Bar. Sony Studio Headphones($20) are generally pretty solid, assuming you don't step on them, they are one of the first pairs of headphones to last me September through November. Dell's laptop's with aluminum and steel- mine's a Dell Precision M90 but the Inspiron series are solid too, are extremely durable compared to many. Alienware's Area 51 m9750 is a 17'' desktop alternative with a light Magnesium Alloy chassis which is scratch proof. IBM's Thinkpad features a spill-proof keyboard as do some of Panasonic's Toughbooks. And if you want severely rugged computer, Itronix has a $3000 laptop that is dishwasher safe.
Extended Warranties are Sometimes a Necessary Evil
I'm quite comfortable opening up my desktop tower, attaching an anti-static strap and removing/installing components, etc. However, this was not the case with a tightly-constructed laptop, with which I had no previous home-repair/upgrading experience. When I decided to buy my HP Pavilion dv9000 laptop last year during the annual "Boxing Week" sales, I decided that I wanted expert help/replacement guarantees available to me beyond the basic manufacturer's warranty.
When I purchased my laptop, I expected that I would be taking it with me on the road, etc, which would subject the PC to more than the usual wear-and-tear that a desktop would have to deal with over its projected lifespan. I waited for laptops with dual-core processors (would handle upgrade to Windows Vista) to become affordable and the norm in the retail market. I do not expect to be replacing my laptop any sooner than three-four years, so a manufacturer's warranty, plus a three-year extended warranty seemed to fit the bill in my case. My laptop is almost one year old at this point, and no problems to date. (cross my fingers; my car unexpectedly cost me enough this month.)
That's my $0.02 worth on this issue. Comments, anyone?
Kingston ON Canada
Are you a gambler?
Extended warranties are like playing the tables at Vegas. The house DEFINITELY has the odds. Think of it this way....Retailers will try to tell you how many things can go wrong, and how much it will cost. So, why, then, can you get an extended warranty on a $3,000 TV for less than $500. The house is betting that they will keep ALL of your money, or, at worst, only spend a fraction of it. Consider this...less than 20% of extended warranties pay off, because either 1) it fails while under the manufacturers warranty, or 2) it nevers fails at all during the warranty period. I have been guilty of wasting my money on these things, but looking back, if I had saved all the money that I spent on extended warranties, I could buy most of the products that they were assigned to, all over again!
Extended Warranties are Rarely Worth it
I purchased a few of these when young, but after a couple of lessons learned years ago at the desks of the "Our Warranty Does Not Cover that Item" managers, I have not since purchased any, and find it easy to cut off the salesperson with a firm "no!" in the middle of their dissembling close, which you described so well.
Extended Warranty....Worth it? Maybe
I rarely purchase this offering unless the product price is more than $1000 and the cost to repair would li8kely be more than half. That said, I did purchase an extended warranty from HP on a notebook computer. Within 30 days of the expiration of the etended waranty, the notebook started having problems. I sent it back and they had to replace both the heat sink and motherboard! Whew, the cost of the $257 extended warranty started looking pretty good compared with replacing the notebook for around $3000.
One caveat to consider, the term "extended warranty" is misleading, at least with the HP definition. For expample, if you purchase an "extended" warranty for 3 years, the notebook is not insured for 4 years (one year that comes with the purchase plus three, equaling four years). It is, in fact, only covered for the three year "extended warranty period."
NO, but sometimes yes
I'd say no for the most part.
I've had an extended warranty once that didn't cover my broken remote control for my TV.
I've heard other stories from friends about having a warranty that covers everything except what is broken.
However when I sold my TV a couple of years ago, It still had another years worth of warranty left which helped me to get a better resale price.
There is always the Murhy's Law thing too. If you buy a warranty, chances are you won't you won't need it. If you don't get the warranty, you're doomed.
Who is this Murphy anyway?
No says Consumer Reports
For the retailers it represents a huge profit margin with nice commissions for the sales person. Remember they are competing on prices so the margins are not huge. Throw in the extended warranty and you made the retailer and sales person happy. They seldom have to pay out because electronic products seldom break in the 2-3 year extension they are trying to sell you. Also consider that the cost of any repair during that 2-3 year period is about the same as the extended cost. Bottom line, DO NOT OPT TO BE RIPPED OFF.
extended warranties are like insuranc -- buy and hope
I normally only buy extended warranties on more expensive items or irtems that are more likely to need repairs. I had an extended warranty on my RV that I collected way more in benefits than payments, same as my dental insurance. On my last laptop the extended warranty has taken care of two repairs including a replacement motherboard plus a replacement battery (the battery alone was about equal to the cost of the warranty!) At the same time I have not collected on my life insurance since I haven't died yet. But that doesn't meant it was a rig off. At the same time, when I bought a digital coamera on sale for $99 I didn't buy a warranty because after the manufacture's one year, I would probably raather replace it.
Don't forget the "KFactor" What? ... K=Klutz Read on .
Other replies seem to be giving super technical advice. Now let's try to get personal.
To begin, we have to keep in mind that the companies who sell the extended warranties are doing so to make money. So they are charging prices such that, on balance, more dollars come in with the prices than go out with the warranty coverage. That's pretty easy to understand.
Next, let's make an analogy with health insurance. If you are sick, you are more likely to pay higher premiums for a very high level of health coverage. Why? Because you know you will use the insurance.
With extended warranties, some of us are simply more likely to use them than others. In my life, I am a certified Klutz. I twist in a new light bulb, and the bulb breaks. I put together an Ikea cabinet, and my wife's favorite vase breaks when the shelf falls off. Those are examples of the "KFactor".
The "KFactor" becomes even more apparent when I am dealing with mechanical stuff like digital cameras, PCs, cell phones, etc.
So, how does this apply to extended warranties???? Because of my inherent "KFactor," I always buy the extended warranty. And I usually win more times than I lose.
So please read the other comments about what to look for in the fine print etc. But if you , like me, are "KFactor-man," buy them.
My experience with extended warranties is mostly related to automobiles. If a manufacturer puts a warranty of 100,000 miles on a vehicle, they do not expect to have a problem during this period. If a manufacturer puts a warranty of only 30,000 miles on a vehicle, the reason behind it is they will lose their shirt paying for expensive repairs that likely will begin to occur after the 30,000 miles. No manufacturer can afford to absorb the charges associated with the high cost of service today and stay in business.
I don't believe that Consumers Report has ever suggested an extended warranty on any kind of purchase.
Most often they are not worth it
When I bought my lcd tv I paid $3700 for it, they wanted $800 for a warranty. I told the guy "you want over 20% of the tv cost for a warranty?".... of course he gives you the lines about "what are you going to do it breaks?" and tries to pressure you into the warranty because thats where they make their money. Thats a rip off, glad I didn't take it, heck I could buy a new LCD tv today for that $800. Plus the odds of a tv going bad within 2 or 3 years is extremely low, and you are automatically covered the first year regardless. It probably depends on what you are buying but in this case there is no way anyone should pay that for a warranty.
PRICE - PRICE - PRICE
I bought a fax machine at staples it was a unit with a price tag of $80.00. The 1 year extended warranty (after the manufacturers free full first year) was $5.00. I bought that warranty
I bought a home entertainment center (DVD with dolby 5.1 and 6 speakers) for $289.00. The 3 year extended warranty (after the manufacturers free full first year)was $39.00 I bought that warranty.
When the 4th year was almost up I was offered an additional 3 years extension on that warranty for just $633.00. WATCH OUT In the last 4 years DVD prices have fallen. Why would anyone pay $633.00 to insure an already 4 year old unit that they could probably buy brand new today for about $211.00
Extended warranties are an item that really requires a little bit of intelegence and a lot of will power.
Most appliances fail naturally in the first year and are covered free by the manufacturers warranty. The appliance manufacturers plan on bringing in three times the revenue in warranties than they would bring in from service charges, even at the $92.00 per hour charges. with so many warranties out there, it is to their advantage to manufacture a highly reliable unit which will not require service. Odds are in your favor that your device will not break down in the first few years after the original warrant expires.
If you have a hostile environment that is likely to cause unnatural damage to your devices, it might be worth purchasing a warranty WHICH WILL COVER DAMAGE DUE TO ABUSE. READ THE FINE PRINT.
Shop carefully and read the fine print. I recall a case where a friend bought a car and paid nearly $4,000 for an extended warranty. A few months after purchasing the car it was involved in a minor fender bender $560.00 for a little body work and paint. There was a $500.00 deductable so her insurance saved her $60.00. The claim for that accident was evidence that the car had been in an accident and the $4,000.00 warranty which was already paid for was void. READ THE FINE PRINT
I worked for one of the major national electronic stores several years ago. They had an in house extended warranty that all salespeople and cashiers were supposed to push. I worked there only temporarily and not full time. One day I came in and they told me the manager was being demoted and I asked why. And they told me that he had not met his Extended Warranty quota that the company imposed. The (my manager) said that the company earned 95 cents on the dollar for the warranties sold and that sometimes they made more on the warranty sale then the profit on the product. The reason is that most people do not find it necessary to use the warranty. If the products were that bad no one would buy them.
Bought an extended warranty when purchased a Mercedes. Stupid move? NOT! Glad I did it. Things started to fall apart after the 4 years warranty was up. It could have cost me triple the extended warranty amount to pay for them.
As a rule, I do not buy extended warranty. I think if you buy that for every thing you purchased, you will be the loser overall. The MBZ story was just a fluke.
Are Warranties Worth It?
To say that something will break a couple of days after the warranty runs out is exactly the opposite of what happened to me with my G5 iMac. 3 days before my warranty ran out, the built-in video card crapped out. They ended up replacing the whole motherboard. I was so thankful that I had that warranty. I probably would not have paid to get the computer fixed if it had broken 3 day AFTER the warranty was up.
Also with AppleCare, which is Apple's 2-year extended warranty program, you also get technical support any time you need it. This adds more value to the extended warranty than just the insurance policy part of it.
Just recently the the 27" Panasonic television we bought in 2002 started showing some intermittent audio issues. Thanks to the extended warranty that I bought with the television, which extended the warranty for 5 additional years on top of the manufacturer's 1 year warranty, the problem was fixed free of charge. Just to walk into a TV repair shop with a problem cost $50 whether your TV gets fixed or not.
So whether to purchase an extended warranty or not lies not only with price and it's cost efficiency, if the product DOES break, but also whether the warranty can offer you any extra value.
Generally 99.99% NO
Having a buying history of 67 year and anything a man would want should be good enough to lay a foundation whether extended warranties are worth the price.
Generally and 99.9% of the time NO; a waste of money.
I've only bought (2) two extended warranties in my life. One was for a LCD monitor (so dirt cheap I had a gut feeling which turned out to be true - and was repaired).
The other, I bought a DELL Laptop 1 yr full warranty $40.00 But I didn't buy it to cover just the Laptop but the technical service behind it.
If I had bought extended warranties on most of my large ticket item, being ex-CPA, I roughly figure I'd have $96,000.00 less in my retirement.
If the money were placed in savings, instead spending the extra, the compounding & Present Value would give you a nice nest egg. So save instead of spending it on a most probable useless warranty -- but there are exceptions -- know your product, the maker and research reliability.