Extended Warranty Purchases Up 10% This Year 253
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.'"
Re:You get what you pay for (Score:3, Informative)
It's because that warranty isn't necessary, the lower price has enough profit and they can get enough suckers buying an extended warranty anyway.
You'd be better off putting that money towards a decent UPS which will actually do something to protect your electronics.
By some countries' laws, they're useless (Score:5, Informative)
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:Not worth the money? (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 sometimes it just makes sense to pay for an extended warranty. Especially when I know I don't have to worry about having to buy a new one for two years longer.
Like I said, peace of mind has a value too... :)
A lot of people don't realise... (Score:5, Informative)
... 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.
Re:Not worth the money? (Score:3, Informative)
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.
Why extended warranties are useless (Score:5, Informative)
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.
More than just an Insurance Question (Score:2, Informative)
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.
Re:Not worth the money? (Score:3, Informative)
Re:You get what you pay for (Score:4, Informative)
I own a mobile phone store in Australia. Extended warranty and insurance are two products that the mobile phone provider is heavily pushing, offering commissions and minimum targets.
I can also say that extended warranty and insurance is essentially free money for the providers. If an electronic item does not break within 12 months on its own, the chances of a warranty-covered issue arising in the 12-24 month or later period is so low that it can be ignored. I don't think I've *ever* serviced a customer with an error that was not user-caused (i.e., outside warranty coverage) after the 12 month mark.
Extended warranty is nothing but an unmitigated rip off.
Re:By some countries' laws, they're useless (Score:2, Informative)
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 have (or aren't willing to spend) time/resources to go to court, so people just keep buying extended warranties.
I personally try to buy things that have a warranty of at least 3 years by default, since this seems to indicate that the manufacturer is somewhat confident that it won't break. For example Thinkpad laptops have cheap models with 1 year warranty by default, and more expensive models with 3 years warranty. I buy the latter.
Re:Applecare is worth it (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 it's either the CPU or motherboard that's fried, so they had to ship it out to. I only had about 3 months left on the Apple Care.
Re:Not worth the money? (Score:3, Informative)
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 trivial case of getting an electrician from a repair shop to just write you a quick note stating that's the case. Most retailers wont bother you with this though if it occurs within say, the first 3 years or so and I've never heard a case of them challenging a replacement/repair request within the first year or so for electronic gadgets and such. In the first 6 months they can only challenge the replacement if you're clearly at fault for the damage (i.e. if the gadget has coke all over it for example), otherwise it's upto you to choose whether you want a replacement/repair, or simply a refund for that period.
So in the UK, I wouldn't buy an extended warranty for peace of mind, because I have peace of mind that if I look after my product properly then I'm not going to be shelling out for a repair anyway.
To me this system makes sense, to put the onus on the manufacturer to produce quality products, else you're just encouraging companies to sell shit products so that they can sell you the extended warranty to go with it. They might as well produce quality products for the UK market because they'll only end up shouldering the costs anyway. You're also leaving the door open for dodgy extended warranties that companies try and get out of fulfilling despite you having paid for them due to hidden clauses and such, but when it's law they have little choice but to adhere.
The only reason I'd pay for one in the UK is if I suspected there might be a risk of accidental damage on my behalf, the only thing I can think of in that respect might be my phone if I accidently dropped it, but even that I don't pay for insurance on and take the risk, one day it may come back to bite me, but the amount I'll have saved in not paying it will more than cover the cost of buying a new handset anyway.
Re:Not worth the money? (Score:5, Informative)
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.
Re:Where the hell do you go for pizza? (Score:2, Informative)
Naked ladies are at least as likely to wash their hands as clothed ladies. Being that they are naked, there is even some chance that they are more likely to have taken a recent shower.