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Businesses The Almighty Buck News Hardware

Extended Warranty Purchases Up 10% This Year 253

Posted by kdawson
from the one-born-every-minute-and-sometimes-several dept.
Hugh Pickens writes "Consumer Reports says that most of the time, extended service contracts aren't worth the additional dollars. But the Washington Post reports that purchases of extended warranties are up 10 percent over last year, according to the Service Contract Industry Council, a trade group. Consumers 'tend to be more risk-averse and are less willing to absorb the cost of an unexpected product repair or replacement,' says Timothy Meenan, the council's executive director. Mark Kotkin, director of survey research for CR, acknowledges that there are instances when the extended warranty can be worth it. 'We recommend getting one for the Apple computer,' Kotkin says. 'The tech support that comes with the extended warranty is great. Without it, the tech support is skimpy.' Another product where extended warranties may be of use are giant television sets, where few manufacturers will come to your home to make warranty repairs. Extended service contracts for big screen TVs often offer in-home repair, says Meenan, who once shipped a Sony TV to the service center for repair under the manufacturer's warranty. 'They fixed it and brought it back 45 days later.'"
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Extended Warranty Purchases Up 10% This Year

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  • by Max Romantschuk (132276) <max@romantschuk.fi> on Tuesday December 15, 2009 @05:27AM (#30442108) Homepage

    If I buy a device and it doesn't break, is the extended warranty useless?

    I don't think so. The whole point is that _if_ I have a bad device I can get it repaired. Peace of mind has value too.

    It's not like my home insurance is useless just because no one has burglarized us and we haven't had any fires...

    • by MrMr (219533) on Tuesday December 15, 2009 @05:41AM (#30442176)
      I never accept those extended offers; If you have a bad device and it breaks within the reasonable period that you may expect it to work you don't need the extended warranty.
      If you expect to beat the insurance company at a game they set up themselves you might be better off gambling with the insurance premium in a casino.
      • by beuges (613130) on Tuesday December 15, 2009 @06:01AM (#30442280) Homepage

        Except that the standard warranty generally doesn't last as long as you would reasonably expect the product to work. Notebook computers usually come with a standard 1 year warranty, but I would reasonably expect a notebook to continue working for at least 3 years. My personal notebook is well over 2 years old and still works fine, however, thanks to the extended warranty that I purchased, I got a new screen yesterday because of a column of blue pixels that suddenly showed up last week.

        Unless you make a habit of replacing all of your devices every year, the extended warranty is often useful, depending on the device. I use my notebook every day, all day, and the extended warranty was worth the peace of mind knowing that I would only need to replace it after a minimum of 3 years - it's insured against theft and accidental damage, and the extended warranty covers device faults and failures. Without it, I'd probably have had to buy a new notebook in the next few weeks/months, depending on how annoying the screen fault became.

        • Re: (Score:3, Informative)

          by xaxa (988988)

          That depends on what country you buy the laptop in. I've never bought an extended warranty here in the UK, since the law requires stuff to last "a reasonable time". (That time is left for a court to decide, but for a laptop it would probably be 3-4 years.)

          This is one of the main reasons why electronics are more expensive here.

        • by MrMr (219533)
          As mentioned by others: A reasonable time is set by law and depends on the price of the product; 3 years for a laptop is normal but for a (new) house the warranty period for construction errors may extend to 20 years.
        • by InterGuru (50986) <jhd@ i n t erguru.com> on Tuesday December 15, 2009 @08:43AM (#30443230) Homepage

          Most credit cards ( at least in the USA ) will double the manufacturer's warranty at no cost for items you buy with the card. That extends a one year warranty to two years.

          The card provider is doing it as a free add-on. This shows how little the warranty really costs the provider.

        • I think that an extended warranty's worth varies depending on how much the warranty costs and how much the item costs. If a $1,000 laptop computer has a $200 extended warranty, that might be worthwhile. But one time we bought my wife a digital camera at Best Buy for $150. They tried to sell us a $75 extended warranty. I didn't think a warranty that was 50% of the purchase price of a new camera was worthwhile, so we passed. Of course, since then I've made it a policy to avoid buying things at Best Buy u

        • by j00r0m4nc3r (959816) on Tuesday December 15, 2009 @10:32AM (#30444564)
          Unless you make a habit of replacing all of your devices every year, the extended warranty is often useful

          This is a sucker's game and you've played it. It's only valuable if you buy it for a device that fails. The only problem is you cannot predetermine which device will fail, so you end up buying it for all your devices. Let's say you buy 10 devices each for $1000 (just to keep the math simple), and you get the extended warranty for all of them, and you pay a 20% premium for it. You've basically paid and extra $2000, enough to completely replace 2 devices at the same price (but remember prices go down over the next few years so you actually get MORE device for the money in a couple years). The chances of more than one of those devices failing is extremely slim. Modern electronics are extremely reliable (and you usually pre-determine reliability by reading reviews to eliminate the really unreliable brands). I don't have spreadsheets and shit with the numbers, but you can be sure the insurance company does, and would not want you to see it. You're basically gambling, but you're doing it blind, without any knowledge of the odds. For all you know the odds could be 1billion:1 against you. The insurance company knows the odds, and you can be certain they don't work in your favor. You are much better off taking that $2000 and investing it, or even going to Vegas where you know exactly what your odds are.
          • by timeOday (582209)
            I reckon it has at least as much to do with conscientiousness as with odds. Most people don't send in rebates [wikipedia.org], and I'm sure the same goes for warranties. Thus you might beat the odds if you're an anal person who keeps all the paperwork and still care for your older tech enough to fix instead of replacing it.
    • by Nerdfest (867930)
      I've had good luck and have used pretty much every one I've ever bought, but I discovered something interesting. If the product is replaced under warranty, it effectively 'fulfills' the warranty obligation, and you may need to buy a new one for the new product. This may vary by store and country, but it's something to watch out for.
    • by l2718 (514756) on Tuesday December 15, 2009 @05:45AM (#30442208)

      Like all other kinds of insurance, the only question is whether you have the capital to pay for the risk. Insurance is a simple transaction, in which you pay someone else to provide the capital necessary to cover you in case of some bad event taking place. It's worth it to you since you don't need to have this available capital.

      The expected direct monetary cost of insurance (premium minus expected payout) has to be negative, or the insurance company won't be making money. In other words, you must pay them more than the product of the probability of the outcome times the damage. Insurance nevertheless has positive value since this comparison (permium vs payout) only makes sense to someone who has the resources to make the payout.

      Thus it's a good idea to insure your house -- if it burned down you probably don't have the money to buy yourself a new one, so instead you pay the insurance company to have money to buy you a new house. However, buying warranty for most electronics is a waste -- why not act as your own insurer, cutting the middleman and saving on the premium? People who buying electronics so expensive they cannot cannot afford to pay to fix or replace should consider insurance -- but precisely because insurance only makes sense for big-ticket items, the effect of an economic downturn and concern about future finances should be to reduce purchases, not to make the purchases and then add insurance.

      • Except that if your house actually burns down, they first employ a dozen professional detectives to make up something... anything... to blame you, similar to the “pre-existing condition“ “excuse”, and pay you... nothing at all.

        And then you can’t even end the contract, because of a minimum duration of half a century or something.

        I never had a insurance (except where forced by law), and I’ll never get one. (Yes, I got as far as to say, that if that causes me to die, that wa

      • Re: (Score:3, Insightful)

        by pmontra (738736)
        Time also plays a role in the deal: I can have a technician repairing my pc in a day or go out and buy a new one and spend hours reinstalling everything. The cost of my time could be on par with the cost of the hardware.
      • by Aceticon (140883)

        precisely because insurance only makes sense for big-ticket items, the effect of an economic downturn and concern about future finances should be to reduce purchases, not to make the purchases and then add insurance.

        We are where we are (in a downturn following a bubble) exactly because the vast majority of people does not act in a rational way.

        It's thus hardly surprising that most people react the way they do. Instead of curtailing their purchases, they follow the same old habits of unthinking consumerism (

    • Re: (Score:3, Insightful)

      by Sockatume (732728)

      In some parts of the world, consumer protection laws would ensure you get a bad device repaired regardless, on either the store or the manufacturer's dime. This includes several parts of the US that have enacted "lemon laws". Lemme put it another way, why would you buy a product that's so unreliable that the shop's desperate to get you to buy a warranty on it? Find someone reliable and buy their product instead. If you're willing to put up with shoddy products as a matter of course, then they're just going

      • Re: (Score:3, Informative)

        I my case I have a family of six. So say we buy a washer for 1000€. If I can pay a little more and have warranty for four years instead of two it just makes sense. Even a high quality product can break early from the strain of being used far more than the average. (With four kids in daycare we wash at least one machinefull a day.)

        Finland has excellent consumer protection laws, a faulty product I can always get replaced. But failure due to wear and tear is not something covered under those laws.

        So somet

        • Re: (Score:3, Interesting)

          by Sockatume (732728)

          Indeed, there are exceptions where it's worthwhile, like home appliances. Given that this is a tech site, those didn't occur to me. ;)

    • I am on my second iMac now, since Apple finally made one I wanted to upgrade too. The first one convinced me that the extended warranty is required. My old white iMac got the black screen of death 29 months after it was made (I bought it used a little over six months old). When I purchased it the original owner had the three year extended warranty on it.

      Approximate $1300 for the main board and $300 for the daughter card (7600gt). The bill didn't include the labor cost. The final total was zero because

      • by Rotting (7243) on Tuesday December 15, 2009 @07:12AM (#30442614)

        The problem I have with buying an extended warranty on a mac is that they are already charging a premium for the hardware. If they expect me to pay that then I expect them to deliver a product that is engineered to last. We all know they are using fairly standard pc hardware now though so that expectation is a little unreasonable. I suppose it's for this reason that I have a problem with being expected to pay an additional $200 so my overpriced hardware is covered should something go wrong... or maybe I'm just cheap.

    • Re: (Score:3, Informative)

      by lena_10326 (1100441)
      Have you actually been able to save and locate receipts and warranty papers for some random device you bought 2 years ago? I can't find a receipt after 2 months. After 1 year the thermal receipts really begin to deteriorate. Sometimes they're unreadable after 2 years. Without the receipts, forget it, you don't have insurance even if you paid for it.
      • by cowbutt (21077)

        Have you actually been able to save and locate receipts and warranty papers for some random device you bought 2 years ago? I can't find a receipt after 2 months. After 1 year the thermal receipts really begin to deteriorate

        Simple solution: buy a cheap home file [amazon.co.uk] and use it, and photocopy or scan thermal receipts whilst they're still readable.

      • Yes, I have this thing called a filing system... ;)

        It's either in the in-pile, in the warranty-receipts -folder, or in the receipts 200X folder.

      • by xaxa (988988)

        All my receipts (except for food, meals, etc) are in an A4 envelope. They're not very well organised, other than starting a new envelope every year, but when my bicycle was stolen it was easy enough to go through and find all the relevant receipts (for the bike, lock, lights, etc) to send to the insurers, and it probably took less time than keeping it organised would have done.

        Also, I usually pay for anything over £30 with a credit/debit card, so there's also a record of the sale on my online banking.

    • Re: (Score:3, Informative)

      by Xest (935314)

      It's interesting to see the different perspective here on Slashdot to that I'm used to in the UK.

      Here in the UK, if a product breaks in an unreasonable timeframe, you don't have to worry about having a warranty to cover you, if the product was not fit to last it's reasonable lifetime (say, 5 years for something like a DVD player) then you have a right to replacement or repair. The caveat is that after the first 6 months it's upto you to prove you didn't break it, but for electrical goods this is a fairly tr

    • If I buy a device and it doesn't break, is the extended warranty useless?

      I don't think so. The whole point is that _if_ I have a bad device I can get it repaired. Peace of mind has value too.

      My wife once worked in a place that sold extended warranties for electronic devices. She told me at the time that the reason they were pushed by the retailers is because the profit margin on them is incredibly high - they're expensive, and they almost never are needed....

    • If I buy a device and it doesn't break, is the extended warranty useless?

      Plus, some electronics stores (usually smaller ones) will write you a check for some or all of the warranty cost if you didn't need it through its lifetime.

      My parents bought a TV from a smaller electronics store (not a chain) and got the warranty which they wound up not using, and I think it was a little cheaper than if they're purchased the warranty from a chain.

      At the end of the period the store sent them a check for 50% of the price.

  • Interestingly, they are the two mentioned (big screen TV and Apple computer) and my car.

    The first two pay for themselves. I had to replace my TV for some backlight issue and the Apple tech support for 3 years is really handy.

    The third was a colossal waste, because I drive a Honda.

  • some extended warranties are a bit vague on the coverages or skimpy on the limitations, which means that more "failures" slip through the gaping holes coughbestbuycough

    maybe it's just me, but i expect that many people will experience a significant number of "failures" with these products.

  • Everyone feels their dollar is worth more now that the economy is crap. So they think they're doing the smart thing by protection their already expensive purchase but they're just wasting their money.

    Extended warranties are like lottery tickets in that the poor and stupid buy 'em up like they're going out of style.
    • by PitaBred (632671)
      Depends entirely on the product in question. Most of the time the warranty's are a waste. But there are a few cases (as Consumer Reports notes) where it actually is worthwhile insurance.

      By your logic, ALL insurance is a waste and only stupid people should have it as a protection against unexpected major financial expenditures.
    • by fostware (551290)

      Extended warranties are like lottery tickets in that the poor and stupid buy 'em up like they're going out of style.

      My Dell 1730 has the dreaded nVidia 8800GTX issue (in SLI no less). Dell admitted they'll replace them for 18mths (std wty +6mths) so naturally they died at 20mths - twice.

      The replacement cost was AUD$500 each time, the wty was $400 for an extra 24mths.

      Buying an extended warranty 'cos a salesperson suggested it, without research and forethought, is like lottery tickets in that the poor and stupid buy 'em up like they're going out of style.

      Fixed it for you...

  • Good enough (Score:3, Insightful)

    by slasho81 (455509) on Tuesday December 15, 2009 @05:58AM (#30442266)
    Computers are getting to the point of "good enough" for the current technological cycle. This means people won't be shelling out hundreds of dollars every three years for a new computer when their old computer is good enough and in good shape thanks to an extended warranty.
  • by cerberusss (660701) on Tuesday December 15, 2009 @06:04AM (#30442290) Homepage Journal

    By some countries' laws, these extended warranties are mostly useless. Under Dutch law, a product is expected to work for a couple of years. Customers who return with a broken device after two years are still entitled to a working device. A negotiation should take place between the seller and the buyer, and one outcome could be a repair, for which the costs cannot be too high.

    Some chains like MediaMarkt have put this negotiation down to a few rules and customers are protected by these. On the other hand, international chains like Apple have been found guilty for refusing Dutch customers help with their broken device just outside the warranty.

    • Re: (Score:2, Informative)

      by cgomezr (1074699)

      In Spain we also have a law like that, but in practice it's totally useless: in theory you should have warranty for two years (or even three, I can't remember); but then the law says that after the first year the burden of proof of not having broken/misused the item is on the customer. Obviously it's impossible to prove that you haven't misused the item, so the law doesn't work and the companies just ignore you if you invoke it. I guess you could get a refund in court, but that's as always, we laymen don't

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Under EU law, you may be entitled to a working device, however, you may find out that the level of service is much worse than when you had an extended service contract. Like waiting two months for a repair, compared to a week.

  • by GrubLord (1662041) on Tuesday December 15, 2009 @06:04AM (#30442294)

    ... that those Gold and Platinum credit cards they're collecting 'reward points' on also oftentimes provide extended warranty on purchases made with said credit card.

    Before you shell out for an extra year or two of warranty, try reading through the terms and conditions of your favourite rewards card. Chances are, you can get that extra year or so of peace of mind for free.

  • My rule of thumb is anything that can be 'self insured' should be. For example, I don't insure my own truck (about $5000) if it's wrecked*. I know that if this happens I can buy a new one with my savings. Not ideal but that's how life goes. All the money I would be spending on insurance goes towards my savings/investments.

    However, my house is insured. If it was burnt, I'd be in tough financial shape. I can't 'self insure' it. *if I hit someone else, they are insured.

  • by Canazza (1428553) on Tuesday December 15, 2009 @06:10AM (#30442314)

    It's probably wise for someone to insure their TV (as that is all the Extended warranty is really) if it was rather expensive, but there are a few things that I will not purchase the warranty for, and have been pressured by sales people.

    MP3 players (they're small, portable, likely to break, but honestly, you can buy a half decent one for 20 quid)
    Digital Cameras (The home-market ones, not the Professional level ones.)
    PCs and peripherals (Myself, personally, if shit goes wrong with my PC I know how to fix it, I don't need some tit 100 miles away replacing every component and wiping the OS when I know it's a driver issue)

    Honestly, I got pressured by a bloke in Curry's about getting Extended warranty on a £15 USB Mouse that cost twice as much as the mouse itself. I've been using it for 7 years and it's still perfectly fine (and it's by Microsoft :O)
    Same with my MP3 player (5 years) and my phone (3 years so far, and only a bit of the front casings come loose, Sellotape FTW). My last phone fared less well, it lasted two months, but I *did* slam it in a car door. Accidents happen, but the phone only cost £20 and it was PAYG so I only lost about £3 in credit.

  • by Anonymous Coward on Tuesday December 15, 2009 @06:20AM (#30442358)

    I've purchased extended warranties on prefab PCs before, from BestBuy, CompUSA, and Frys over the years and sort of felt cheated at the end. Not because the machines didn't break, but because I violated at least 10 stipulations in the warranty contract by year 1. Things like breaking the seal and popping in all kinds of hardware inside of it; replacing original parts with better parts, wiping the HDD (along with backups) and dual booting it, etc.

    I could never take the frankenPC to the store and ask for any warranty. The nature of the scam in these retarded contracts is that they require you keep all kinds of things intact, plus have the warranty papers, the original sales receipt, and the same OS it shipped with.

    With Apple you have the serial stamped on the hardware and inside the magic ROM thingie. Take it to the store and they'll punch it in and make the necessary repairs. And they try to fuck you over like the BestBuys of the world do, or ask you to "restore from Tiger" when Snow Leopard is the new cool thing.

    • Re: (Score:3, Informative)

      With Apple you have the serial stamped on the hardware and inside the magic ROM thingie. Take it to the store and they'll punch it in and make the necessary repairs. And they try to fuck you over like the BestBuys of the world do, or ask you to "restore from Tiger" when Snow Leopard is the new cool thing.

      I just dropped off my almost 3-year old MacBook Pro to the Apple store a few days ago. The asked which OS I had installed on it and had no problem with the fact that Snow Leopard (the latest OS from around 2009) was installed. They just wanted to know which OS they had to dive into.

      They asked if I changed any hardware "recently," and I said no (original RAM and harddrive). Had I replaced something non-user replaceable (like the HDD on the MacBook Pro) then I'm sure they might have made a fuss.

      In the end

    • And they try to fuck you over like the BestBuys of the world do, or ask you to "restore from Tiger" when Snow Leopard is the new cool thing.

      Don't take it to an Apple store, call the 800 number and talk to a real tech.

      I've turned over each of my last two Apple laptops for 50% of the hardware purchase price by getting a complete makeover on them during the last month of AppleCare, most recently in October.

      AppleCare is a fantastic deal, I just left the company over increasingly poor QA and unconscionable judic

    • by PitaBred (632671)
      90% of people don't do that with their computers. If you can do that competently, then the warranty is a waste of time. But for the majority of the population where a computer is just a Facebook appliance, it depends on how much it'd cost for them to pay for service. If a hard drive goes south outside of the basic warranty, most people will end up paying hundreds of dollars to get it replaced. May as well get a warranty at that rate, especially if you need faster repair turnaround than sending it off to Chi
  • I'm both jealous of people who are so ridiculously well off that they can afford to throw money down that Rabbit Hole without a second thought, and at the same time sorry for the people who absolutely can't afford to do it but don't have the personal wherewithal or common sense to avoid it.
  • by Cereal Box (4286) on Tuesday December 15, 2009 @06:25AM (#30442390)

    It's not usually explained in articles like these, but extended warranties are useless because the product reliability tends to follow a "bathtub model". If you chart the number of expected repairs a product (y-axis) against time (x-axis), you'll see a large number of them initially (i.e., initial product failure) which quickly slopes downward towards zero and plateaus for several years. Then, many years out, you'll see that number quickly ramp up again (i.e., end of life product failure). Extended warranties aren't for that period of time, they're for the period of time when product reliability is highest.

  • My biggest consideration when getting one of these warranties is how long it will be gone for repair. Look at the fine print to find how long the company has to make the repair. It has been my experience that the maximum allowed time *will* be the time it takes to repair. Can you go that long without your device? I know I can not wait the requisite 60/90 days, so I do not purchase the warranties.

  • I tend to steer well clear of these things but do occassionally take out extended warrenty for items more likely to break. I was an early adopter of LCD TVs and took out a 3 year warrenty and sure enough, 2 years down the line, it died and I got a new (better - w00t!) one which has been fine since. I recently upgraded to a new Samsung from John lewis (UK) who do a free 5 year warranty on all TVs which is cool.
    Generally, anything with moving parts that might fail, I tend to get extended warranty and to date
  • A number of tehm automatically double the manufacturer's warranty, so for many items buying an extended warranty is pretty much duplication of existing coverage.
    • by bryansj (89051)
      I've used this a few time already on my Visa. It worked out well and it give up to an extra year on a product purchased in full with the card. You submit the receipt, product warranty, and credit card statement show the purchase along with the cost of repair or replacement. They will send you a check for the lesser of either the original purchase price or repair/replacement cost. I've replaced a Harmony 890 remote twice using this warranty, a dead external HDD, and had a laptop repair after its warranty
  • Stupid Stupid Stupid (Score:3, Interesting)

    by bsDaemon (87307) on Tuesday December 15, 2009 @07:12AM (#30442618)
    I once had an Office Max employee try and sell me an extended warranty on a mouse pad, which wasn't even $10. If my mouse pad somehow managed to malfunction (seriously?), buying a new one would be cheaper than paying for a damned warranty. Recently, I purchased a Nikon D300 and a 13" MacBook Pro, about 2 months apart from each other, at BestBuy. In each case they attempted to sell me the extended warranty, but gave me 14 days within which to think about it. I told them I'd think about it, then just left, but there was no way they were going to bilk me for an extra $2-300 when the purchase was expensive enough. I'm careful with things, and I can afford to replace them if necessary anyway.
  • by Anonymous Coward on Tuesday December 15, 2009 @07:18AM (#30442660)

    I worked on a data migration project for a major insurance company. As part of that project one of the Business Analysts was asked to give us an over view of the business model represented in the systems we were handling. He started his talk by stating that their most profitable line was the type of insurance which people are asked to take out when they make a purchase. He observed that the customer was rarely able to claim because of the way in which the warranty was worded, and that often the retailer made more money from the warranty than they did from sale of the product. We all laughed. Ha ha.

    Since then I have not taken out a warranty of any kind on any product. If it breaks then so what. I have saved more over the years than I might loose from the replacement of repair cost of something breaking.

  • by vlm (69642) on Tuesday December 15, 2009 @07:43AM (#30442782)

    Consumers 'tend to be more risk-averse and are less willing to absorb the cost of an unexpected product repair or replacement,' says Timothy Meenan, the council's executive director.

    Sounds pretty bogus to me. My logic in buying an extended warranty is its an option on low quality. Has the quality of the product dropped enough to now make the warranty a good deal? In the past, sure, it was a ripoff, but now the papers are full of stories about junk from china, inedible food, lead paint on everything, etc. And everyone has the experience of buying something from China-Mart that instantly falls apart or is simply unsuitable for any purpose.

    Would I buy an extended warranty on a Milwaukee Tools Inc genuine made in America Sawzall, from perhaps the 1980s? No, that would have been a waste, that saw will run until my great grandkids use it. Note, Milw Tool website declares they're now a "globalized" company so I would assume (perhaps incorrectly) that they only ship Chinese trash now, I'm referring to the products from the good old days. Would I buy an extended warranty on a generic sun-moon-star Inc reciprocating saw from china that doesn't even have instructions in English nor a genuine UL listing? Heck Yeah, that thing probably won't even last thru one complete job!

    So the real focus of the story isn't some "adsorbing cost" BS, it is a story about downscaling quality because of lack of spending money. Store brand, or generic, instead of the real deal. And even the real deal is all outsourced to the point of uselessness.

  • by GauteL (29207) on Tuesday December 15, 2009 @07:44AM (#30442788)

    Last year I bought a freezer. Recently, just as the warranty ran out I received a letter urging me to buy a £35 three year extended warranty for it for "peace of mind". The letter told me that replacing the engine on it could cost as much as £100. Given that the freezer only cost me £95 to begin with, I wasn't impressed.

    When I didn't respond to this shambolic offer,
    the insurance company sent me another letter to reinforce how important it is for me to "protect my investment".

    I'm pretty sure there are people around who do go for these offers, otherwise why would the insurance company even bother?

  • The increased sales of warranties are driven by the difficulties faced by electronics retailers. In an environment where there are fewer customers, stores look to increase the revenue per customer, and the easiest way to do that it to pressure sales associates to sell more warranties. It's an emotional decision ... the conversation takes place at the checkout counter, and rarely in a context where the shopper can take time to make a reasoned, fact-based decision. The desire to get extended life out of the p
    • by vlm (69642)

      stores look to increase the revenue per customer, and the easiest way to do that it to pressure sales associates to sell more warranties. It's an emotional decision ... the conversation takes place at the checkout counter, and rarely in a context where the shopper can take time to make a reasoned, fact-based decision.

      One of the MANY reasons shopping online is better than brick and mortar. I no longer buy "technology items" at B+M stores for this reason, I'm simply tired of arguing with minimum wage clowns about not paying $30 for an extended warranty on a $5 mouse.

  • by Slashdot Parent (995749) on Tuesday December 15, 2009 @09:15AM (#30443580)

    Are there any decent warranty companies out there, other than the rip-off ones that the Best Buy clerk is hawking, that deliver good value at a fair price?

    I could see paying for one that would come to my home to fix big-ticket items, like the HDTV example in the summary.

  • Yeah, I never buy extended warranties on appliances and electronics because I've heard that the companies rake in about ten times more than they pay out in repairs. But now that lots of people are buying extended warranties, maybe something has changed that makes it reasonable.

    ~Loyal

    p.s. Wait a minute! Who's telling me this!

  • The store would push employees to sell warranties more than anything else. Even to the point where they had week long training seminar specifically for selling warranties. There was one salesman who would pull some dirty tricks like adding the warranty to the sales ticket without even asking the customer. Despite this, and his abhorrent body odor, he still managed to outsell most of the other people on the floor.
  • On electronics, I think extended warranties are pretty much always a bad idea, because of the effective depreciattion. I could have spent a few hundred for an extended warranty for my $3000 TV a few years ago.... but if it breaks today, worst case I can spend another less than $1000 for a better TV. Same goes for computers; by the time the computer is out of its regular warranty, one can buy an equivalent or better model cheaper if it breaks. So the possible payoff of the extended warranty is much less t

  • by bradgoodman (964302) on Tuesday December 15, 2009 @01:01PM (#30447264) Homepage
    [Dr. Hibbert: Nailing a nail into Homer's brain to restore lost brain damage brain damage, while trying to assess the amount of damage]

    Homer: "Extended Warranty? How could I go wrong?!"

    Lisa: "Perfect!"

No one gets sick on Wednesdays.

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