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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It Depends upon the Quality of the Product
Wether or not to purchase an extended warranty depends upon the quality of the product and the reputation of the company that makes it. The better the quality the least likely the need for an extended warranty, both because the quality minded companies make products with minimum issues, and they usually back up the products with service guarantees. If the product is poorly made, and you buy the warranty then it may be worth it. But in such a case if you have to replace it multiple times because of poor quality, is it still worth it? If the product is not of high quality, then you will probably be replacing it either way. So why buy cheap products in the first place?
Fraction of Price
I tend to judge whether or not to get a warranty based on a fraction of the cost. If it's 10% of what I'm paying, worth the security. However, the other day when purchasing a HDTV- circuit city wanted 25% of the cost of the TV for a warranty. Playing the odds I strongly doubt that a manufacturer would market a set that has a 1 in 4 chance of failing. I think looking it as fraction of the cost versus probability of it failing is a good way of making the decision. Also most products will fail very quickly or not for awhile, so use it as much as possible before the store return policy expires.
Personally the only warranty type that has saved me money has been for laptops. Replacement software and replacement CD drives have come in handy on several occasions. Though even then the one year is more useful than the longer ones since you can figure that the laptop wouldn't be worth the cost of a four year warranty after four years. Would be a better idea to put the extra money aside and buy a new laptop down the road.
it's useless !
well normaly when you buy something it has 1 year of waranty. simply i think that something which is good doesn't have to go to reperation even after several years so getting the extended waranty is useless, kind of waste of money
but if you're not sure about the brand well it's worthit, better to lose your money after 1 year
OK, it's a combination of how long you expect to use the product and how many physical moving parts there are in the product, add those both up and if they exceed the mfg. warrenty by a great amount like x5 then you may actually save money with the extended warrenty.
You, of course, also have to take into account the cost of the extended warrenty.
Like everything else...educate yourself
To begin with I will admit that I sell service contracts for recreational items with financing, been doing this for 6yrs.
This is what I have found and do.
1. remember that not everything is 100% reliable. There is always situations that either due to human error or material defect you will end up with a break down. And don't think a product is all bad because it's failed you once and you took it back and changed it for something else... NOTHING IS 100%. (This is why I always check places like C-net for not only their reviews, but all of the user reviews).
2. The price of a service contract/ ext warranty should pay for itself in one breakdown. And figure in the cost of not just the parts, but also labor, taxes and other fees that can come up (like the company that I work for will pay for towing, hoist & lift out for boats and even hotel/meals if you are in a RV).Plus the service contracts I've had and used have paid for the food I lost when a refrigerator quit on me with no questions or need of reciepts. I've also had a service guy come to my house to replace a mother board on my 2yr old laptop (these would not have been paid under the manufacture's warranty in writing). Then look at your deductable, no deductible is the best, but usually it's between $25-$50 dollars. And be expected to pay for any troubleshooting at first, but a reputable company will reimburse you if the problem was not user damage/neglet or just common use (but sometimes common use can be paid).
3. Check where the repairs are done. Best is to be able to have the repairs done locally to you. If you have to ship it to a facility, check to see if you have to pay for shipping & handling and if so, will they reimburse you for it.
4. How will the repairs be paid for. The best programs should not make you pay for everything up front then pay you back later. Again, expect to pay for troubleshooting, but for the repairs itself should be done by the underwriter of you service contract and then you get reibursed. Check to see how they are paid too, it should be done with a credit card directly from the underwriter to the repair facility.
5. If you buy a service contract... don't forget that you have it and use it!!! I have heard alot of customers tell me that "I've bought those before but never used it" then to find out later that the reason they are buying the new item, thier old item could've been repaired with a service contract. For me, the first sign of a problem there should be a toll free number to call for advise.
So after all this... whew!!.. I sell service contracts, I buy service contracts, and I use service contracts, but I do not buy everyone that I come across by reading all the terms of the agreement.
Buy Them Carefully
I habve bought 2 extended warranties. The first time, I wasted my money. The 2nd time I bought it for a video camera at best buy. It was a "bumper to bumper" warranty, with a replacement policy.
I had 3 problems with the camera, and they fixed it, no problem
(just the wait for it to come back).
What really bugs me is if you buy a small item for a few bucks,
you go to checkout, and they ask you if you want to buy the extended warranty for the same price as the item cost to purchase.
Think about it carefully, weigh the price and read the contract carefully.
Many of these are like home warranties, or 3rd party car warranties. They have a billion outs. Do not feel pressured. You can normally buy the EW after your initial purchase - go home, think about it without the sales pressure.
yes if the purchase is a major one that u won't change for at least 4 years.
Also have u ever noticed how everything breaks down when your warranty's run out!!!
i had 2 years xtd warranty on fridge got 4 year one on laptop.
but u should always say it too expensive and u don't really want it at that price u will always get offered a discount or they throw something in for free.
As a rule, no
I've found that the extended warranties/service agreements are largely a waste of money, and on that, I agree with ConsumerReports. But, I do have an exception to that rule: Laptops.
The reason one should consider the warranties for laptops is a matter of heat and damage. If you travel frequently, you will likely put some damage on your unit within the first year or two. Additionally, as the average person won't use a cooling unit addition, the heat will take its toll on the parts. But I know this from personal experience with a major manufacturer who fulfilled their warranty on a unit that has gone bad 4 times in 3 years.
Still, make very certain what kind of warranty you are getting, and what product you are buying. If it is a reputable product, you shouldn't need the warranty. For most products, if you factor in the interest on your credit card that the warranty will cost, it makes it even less worthwhile.
not worth it
I'm sure most consumers take great care in the item where they spend a load of money. I agree with most of the responses in that the extended warranty usually covers things that are less likely to go wrong or manufacture problems. The stories I've heard from people who have bought them, gave them the run around where most people peter out. By the time something goes, it's usually some years in. In this case, the buyer usually wants to get a brand new item. Or they loose the receipt to prove they purchased it there or the receipt was printed on those thermal papers that decay overnight.
I say nay to extended warranties and yay to taking care of stuff and just buying when you're finished enjoying it.
Almost never worth it
Think about it. Statistically, if it was worth the money, the company selling the insurance would lose money because they would pay more out than they took in.
The only difference between this an Slot Machines in Las Vegas is that there is no legal limit to how much the insurance company can steal from you.
The only way for this to work out in you favor is if you know more about the reliability of the product than the company selling the insurance and the insurance predictions are wrong. None of us know more than the insurance company.
I honestly believe that these Insurance scams (for consumer goods) should be illegal. The only time that Insurance should be allowed is when the product is a requirement (house car), and loosing the product will bankrupt your family if you have to buy it again. Another example of "good" insurance is medical insurance.
Insurance is for saving yourself from financial hardship when the unexpected happens...not to replace toys for free when they fail or when you drop them in the toilet.
With that being said, I can only see one more reason to buy insurance on a consumer product, and that is for peace of mind. It is hard to put a price on this and different people have different risk tolerances. To each his own.
One experience I had
A few years ago, I bought my first digital camera at an online store. I had called their 800 number, because at that time, I didn't feel comfortable giving out credit card information online. After I bought the camera, the salesman was really pushy about selling me an extended warranty. He started at $150 for it, which was half the price of the camera! Long story short, we dickered about the cost of the warranty for a good five minutes. Finally, he said, exasperatedly, "Well, how much do you WANT to pay for it?" I said, "Twenty-five dollars." He said, " I tell you what, I'll settle for $35.00." I said, "Done!" It was a full warranty, covering everything no matter how it happened. Five months later, while enjoying Thanksgiving dinner at my oldest daughter's house, someone accidently knocked it off the kitchen counter onto the hard, tile floor. It shattered the battery door on the camera. I sent the camera off to the repair site, and in about 10 days, I had it back good as new. The $35 was far less than what I would have had to pay without it. However, this is one of the very few times an extended warranty has paid for itself in our experience. It's a 'c___ shoot, at best."
kinda worth it
I've had many extended warranties that have gone unused. But then the other ones got used a few times. I think they work with TV and washers; things that need maintenance on occasion. But on something like a digital camera where the technology changes so fast that you can buy a new one cheaper than it would cost to fix it. I Think it depends on how much the item costs and how long you want to have it (no one buys a washer every 2 years, but some ppl buy computer every 2 years).
A guy I know a work will walk out on the spot if offered insurance.
What is the last thing you want to hear when you are about to slide a card for a $2000 TV? Try this:
"Well these Plasma TV's are very expensive when they fail and that gas they have in them leaks some time (Myth by the way). We see lots of people wishing they bought the insurance. Trust me....this product is a real lemon, you better get the insurance."
Extended Warranties are usually not worth it
You gotta read the fine print. People sometimes feel that extended warranties protect you in all cases... but in reality most don't. For example, an extended warranty on a PSP doesn't cover the screen being cracked or other things that could occur by accidentally dropping it. The thing to consider is this: If an extended warranty only extends the length of time of a manufacturers warranty, its not worth it... if it extends the protection (i.e. covering extra damages) then it would be worth it. It's usually a better bet to find a reliable manufacturer with a good track record then rely on a warranty.
Toyota Sequoia warranty $1067, worth it but it took 4 years
We bought the extended warranty with our Toyota - in was inexpensive comparied to all the other costs of the truck... rolling out the door at $46K - whats another $1K.
In the end it has paid off - but we have taken care of the vehicle pretty well its whole life. If you consider the time value of the money - maybe it wasn't a good value - but it does keep me from worrying about the Engine and Transmission much...
Just bought a Mercedes recently - its warranty is $3800 - that one is making me think twice.
On almost all electronics - I pretty much skip the warranty.
Don't just buy an extended warranty...................
ok, this is the only answer to this question... All manufactures give you a LIMITED warranty. That is the key word. It lasts only for a year. It only gives you MINIMAL coverage for breakage for only the company made part and usually no software. That's it. If you buy a performance, full warranty and maintenance contract, you better get it especially if its a hdtv. It covers much more than a standard warr and includes all the necessary cleaning, calibrating etc... Boscov's has best and cheapest plan.
BEST BUY EXTENDED WARRANTIES--AVOID
Bought the ex-warr. for a Compaq computer--3 years.
Watch this slick move on their part. You are really buying a two year extended. When my ram broke down in the first year, they said I had to wait ( actually turned out to be about two weeks) for them to get the ram from Compaq. They said they could not use their ram on hand since the first year was the Compaq warranty. They try to sell you by saying they protect you for three years and it "enhances" the factory warranty in the first year. NOT REALLY TRUE. I also lost all my data--they did not provide a back up disk for the data.
Wish I had not bought the warranty--never again. If something goes it will likeLy happen in the forst year and yu can then take it to a certified service depot.
The best extended warranty I have ever had was that provided through my credit card-VISA. It provides one year beyond the factory at no cost. this is a great benefit that many people do not realize they have--or have forgotten. CHECK YOUR CREDIT CARD BENEFITS.
TO CLAIM ON THIS BE SURE TO KEEP YOUR ORIGINAL RECEIPT AND THE MONTHLY STATEMENT SHOWING THE PURCHASE. ALSO KEEP THE WARRANTY DOCUMENTS THAT CAME WITH THE COMPUTER.
What some people do not realize is that you usually have 14 days to decide to buy the extended warranty. I did not take mine, because I hate high pressure sales. What I have found is that if you buy a 3 yr extended, you actually only get 2 yrs, because you have 1 yr. with the product manufacture. I waited and had a whole year to buy from Toshiba on a laptop and it was just as cheap, but I got it just before the first year expired and therefore got all 3 yrs. Just a thought!
I bought the extended warranty for my new Mitsubishi 73" DLP hdtv. I may have paid too much for the warranty, but when the color engine (?) on that TV failed 3 times in the second year and the replacement part alone was supposed to be worth $1,100 each time, I was not too worried anymore. A warranty is an Insurance Policy and if the product is tried and true for many years, I do not bother. On big ticket Electronics or Vehicles, I always go for the warranty. On throw away items like DVD players and such, no way.
Yes to extended warranty!
When I purchased my stereo system for my new Panasonic Plasma I took out the extended warranty for the components. The expensive sub (Velodyne) failed in the second year and could not be fixed so it was replaced with an newer and equally great sub. My Sony ES2000 ran into problems in the third year and it was also fixed at no cost. Needless the say I was overjoyed that the salesman talked me into the extended warranty. I should mention that I was able to get the warranty at cost as I bought so much equipment at the time. For some reason I can't remember I didn't take out the warranty on the Panasonic Plasma (bought 3 years ago);- you can imagine what I paid for a 42" back then. But I thought a tv that expensive and reliable will never fail, and touch wood it hasn't. On subsequent purchases on other gear I have not taken out the warrenty as I figure if I get 2 or 3 years trouble free I can always by another one as the prices will probably be lower anyway.
some are and some maybe not
I am a service tech for a nationwide company who just happens to sell these warrantees to it's customers,and in fact,on the job I have sold them to customers. From my experience,I had a replacement policy on a PS 2 system, and I did wind up making use of it,so in that case it did work out.However,not everything actually needs one,when it comes to some high end electronic-read the warranty-and see what it covers- and see if there is a replacement clause in it. If you do purchase one,make sure you read the owners manual and follow it to the "T", because if you don't,that's where they will find a technical problem and you get the shaft. I do strongly recommend,if anyone buys exercise equipment-GET THE EXTENDED WARRANTY//// as it will always pay for itself in the short and long run,without a doubt. In my job, I've heard all kinds of stories where they have and have not paid for themselves,but by and large,get them for expensive electronics. Hope this helps someone..
ABSOLUTELY...In My Experience
I purchased the 4-year extended warranty on my Dell Laptop and...almost four years later, they replaced everything but the shell...at my office...at no charge! Totally worth it.
Extended Warranty - are they worth it?
In 2006 I bought a fairly expensive side-by-side refrigerator from PC Richards (and other appliances) and purchased a 10 year extended warranty which was fairly expensive. In the nearly 2 years I've had the fridge (wot a lemon!) I have had 7 service calls for the same 2 chronic problems. Next week they are finally replacing the defective part. A couple of those visits, the guy told us we needed to go to the expense of hiring a plumber to hook up a special water line and filter -- nothing in the manufacturer's literature suggests such an expense should be necessary. If the new icemaker fails to work after installation I'm thinking of asking PC Richards to replace the appliance and when they predictably refuse, take 'em to small claims court, along with the manufacturer. My last fridge I bought from Sears and for 8 years I never had a problem with it -- should have kept it until it died I think. So I've gotten a good deal of mileage out of my extended warranty which is worth it -- though the larger issue is, why has the quality of the merchandise become so shoddy?
Not worth it
As others have said, it's an insurance policy. Basically, you're betting that the thing you're buying is going to break within the warranty period, and the seller of the extended warranty is betting that it won't.
Now, think about it: If the seller of the warranty is betting that it won't break, what better "guarantee" do you need? These guys are in this business to make money, and they won't make money if everyone is bringing his or her equipment in for warranty service. Statistically speaking, the odds are in your favor that the equipment will not break within the warranty period.
Sure, one or two "lemons" are going to get through, and everyone else who gets suckered in to buying the policy pays for their repair and then some! Don't buy them. If we all stop buying them, maybe they'll stop offering them. Then, perhaps, the manufacturers will get a clue and make a solid product.
Not Worth It (Extended Warranty)
You said, "Then, perhaps, the manufacturers will get a clue and make a solid product." I wouldn't count on that. My feeling, based on experience over the past few years is that they just don't give a damn anymore. They suck the money out of our bank accounts and are completely not accountable for the quality of what they sell. However, I normally use American Express to make purchases and AmEx is pretty good at going to bat for their members, at least if the product fails quickly -- refusing to pay the vendor until the issue is resolved.
Minivan + Dishwasher + Computer
Bottomline: do the research, do the math, they are usually worth it!In the above 3 items I sprang for the extended warranties. The costs at the time seemed excessive but I was in that mood of "oh, I don't want to be bothered with 'issues' in the future".
Anyway, the minivan's manufacturers warranty was set to expire and an independent firm sent an offer in the mail to extend the powertrain for another 40k miles for $1200. After 20k miles the tranny failed completely -- would have cost me $3800 out of pocket. Whew! Saved!
The dishwasher's 4 yr extended warranty at time of purchase at Home Depot was $79. The unit's cost $279. Hmmm. That warranty seemed high (as it turned out, later research showed it was actually pretty low). And, renewing it from GE for a year directly was $129!! The unit is still functioning without incident. The warranty was not needed but the lesson is do some research in warranty pricing before hand.
Last is my Dell 4600 computer: 3 yr in-house coverage was around $250. The unit failed one way or another 3-times (bad motherboard, bad memory, bad disks). The came to the house within 2-days of each incident and replaced whatever was needed, no charge, no questions asked. The phone support to diagnose prior to the visits was thorough and pleasant (if u don't mind being on the phone for hours -- not on hold just diagnosing -- they wait while it boots or runs software, etc).
Bottomline: do the research, do the math, they are usually worth it!
Minivan + Dishwasher + Computer (Extended Warranties)
So we see what is happening in the marketplace these days. We are becoming accustomed now to the expectation of shoddy merchandise for which we are invited to pay a sort of extra "tax", and a high one at that, to continually fix that which should not be broken in the first place. Parenthetically, my partner and I just spent about $150 to get our two IPods fixed -- both of them had worn out headphone connections and we weren't getting stereo reception anymore. The repair people told us that this happens all the time, and that also, contrary to what most people think, it's possible to replace the batteries in them when they are shot. We also purchased a warranty from the repair place to guarantee their work. Apple of course wants us to just go out and replace our IPods with the latest and greatest (and obscenely expensive) model they happen to be pushing at the moment. You know, with such poor quality in the merchandise, the serious environmental issues arising from the disposability of these costly toys, I'm thinking we all need to de-tox from our addiction to all this "stuff" they've convinced us we can't live without.
Just like Vegas
The odds say that you loose.
If they are making money on the warranty, then you are loosing money buying it.
I always put a concerned look on my face and ask - Why? Are they having problems with these? Maybe, I shouldn't buy it! Does the manufacturer and retailer not stand behind their quality?
It's amazing to me that a company asks you to pay extra to have them stand behind their quality. We pay to reduce the costs of their poor quality. Their answer to a recall is that you should have bought a warranty? If my products my company makes are faulty then I replace them. It has a real cost to me. I guess if I was selling third world manufactured junk, then I wouldn't stand behind it either. Sell it then run and leave the quality problems in the hands of a third party. Just like rebates.
That way, it's not their decision to deny you.
Rebates, Warranties.... when will the retailer scams end?
Just Like Vegas - Extended Warranties
I'm getting used to losing. My refrigerator was manufactured in Mexico. Enough said on that score. The warranty contract is all money under the bridge now so going forward all I'm losing is the time I have to waste waiting for the repair guy to come and the inconvenience and frustration of dealing with a faulty product. Your suggestion about threatening not to buy the product seems a little futile to me. They can just shrug their shoulders, not issue the contract and wait for the screaming customer to come back with complaints to which they can reply "you shoulda bought the warranty". In any event the customer is always the schmuck. By and large "customer service" has become a meaningless term. Just doesn't exist anymore, with a handful of exceptions. We are being taught to accept the unacceptable and to pay through the nose for it. I should call Judge Judy.
It's not only the what, it's also the where
In some cases I would consider an extended warranty, but part of my decision on purchasing one would be where the repairs or replacements would occur. I have found that most box stores don't want to deal with repairs; indeed, most don't have repair depts, and the cost of mailing and insuring the item to the manufacturer's repair depot may be prohibitive. My question to some of the salespeople who have approached me on this is: does your store do repairs here? And if they start on all the things that could go wrong, I ask them what is the life expectancy of the product? If they cannot answer that, then I politely say thank you for the warning, and leave.