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.'"
Not worth the money? (Score:5, Insightful)
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...
Re:Not worth the money? (Score:5, Insightful)
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.
Re:Not worth the money? (Score:5, Interesting)
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.
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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.
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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.
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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
Re:Not worth the money? (Score:5, Insightful)
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.
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However in the last five years I bought two that have been worth their weight in gold.
How much does a slip of paper weigh?
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Re:Not worth the money? (Score:5, Insightful)
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.
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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
Not a very convincing argument (Score:2)
"I never had a insurance (except where forced by law)"
Somehow I don't think your observations about insurance are based on experience.
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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 (
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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
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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
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Indeed, there are exceptions where it's worthwhile, like home appliances. Given that this is a tech site, those didn't occur to me. ;)
iMacs, I will not go without extended on mine (Score:2)
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
Re:iMacs, I will not go without extended on mine (Score:5, Insightful)
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.
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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.
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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.
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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.
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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
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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....
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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.
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It's a statistics and probability problem. If a device breaks, what would be the cost to have it repaired without the warranty? and what are the probabilities for the device to break between the end of base warranty and the end of extended warranty?
You don't even need to actually work out the math - it's been done for you (by the people offering the extended warranties).
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There is no way to avoid the reality. With extended warranties the customer is getting scalped.
Not if I value my peace of mind highly enough to pay the extended warranty just because of that. I never made the argument it makes financial sense. But for me it might still make emotional sense. ;)
I have 3 extended warranties (Score:2)
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.
does anyone else smell potential fraud? (Score:2)
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.
It's the recession (Score:2, Troll)
Extended warranties are like lottery tickets in that the poor and stupid buy 'em up like they're going out of style.
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By your logic, ALL insurance is a waste and only stupid people should have it as a protection against unexpected major financial expenditures.
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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)
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Blanket statements like this are nonsense. Until summer of 2007 I was using a 244 MHz PII with 256 MB RAM. The only thing that compelled me to upgrade (and buy a thinkpad) was that I decided a laptop would be nice for school. I honestly do not see myself buying a new computer for at least 5 more years, probably more. The specs on my thinkpad far exceed my actual usage, the only reason I'll get a new computer is when my current physically breaks.
Now, I don't game, the most I ask of my computers is that t
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.
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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
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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.
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.
My rule of thumb... (Score:2, Interesting)
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.
There are things it's wise to insure (Score:3, Interesting)
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.
Applecare is worth it (Score:3, Insightful)
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.
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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
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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
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Jealous and sorry at the same instant.... (Score:2, Troll)
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.
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Hmm I would lean towards it being a "general law", otherwise extended warranties wouldn't be so profitable, now would they?
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.
pick & choose (Score:2)
Generally, anything with moving parts that might fail, I tend to get extended warranty and to date
Credit Cards (Score:2)
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Stupid Stupid Stupid (Score:3, Interesting)
Extended warranties are mostly profit (Score:3, Insightful)
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.
Its purchasing a quality drop option... (Score:3, Insightful)
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.
They are very aggressive (Score:3, Interesting)
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?
It's about the sellers, as well as the buyers (Score:2)
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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.
Any Decent Warranty Companies Out There? (Score:3, Interesting)
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.
Persuasion carried out by different means. (Score:2)
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!
When I used to work in sales (Score:2)
Not gonna buy them (Score:2)
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
Requisite Simpsons' Reference (Score:3, Funny)
Homer: "Extended Warranty? How could I go wrong?!"
Lisa: "Perfect!"
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90 percent of extended warranty stuff is pure profit for the manufacturer.
All this means is the consumers are getting stupider.
Re:You get what you pay for (Score:4, Interesting)
You're probably thinking from the using it or not aspect. It's somewhat accounted in the prices; they don't ask for the full costs of giving such support because they know everyone won't use them. They just calculate how many will and adjust prices based on that.
ISP's work the same way too (and many more areas of industry). There's no way they can provide everyone constant maximum of bandwidth they sell, but it works out ok because not everyone are using the max bandwidth all the time (well, it works with ISP's outside US at least).
Personally I would pay a little extra to get better support and extra services. If you've already paid a high price for the product, you might as well spend a few dollars more on such and avoid shit if you happen to need those services.
Re:You get what you pay for (Score:5, Insightful)
To add to this, this is how whole insurance industry works..
Comment removed (Score:5, Funny)
Re:You get what you pay for (Score:5, Insightful)
Exactly.
There are people who can't afford to purchase extended warranties for their devices. Therefore, they deserve to have the extended warranties given to them. To do that we will tax the better extended warranties 40%, and will also penalize people who choose not to purchase them.
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I think that it's not right for one person to have a gold plated plan
"ZOMG COMMUNISM" debate aside, my problem with this specific point is that plans are expensive based on your medical history, not because it's "gold plated" or some BS like that. Someone with a so-called "cadillac" health plan is paying big bucks due to the fact that they have cancer or diabetes or MS or maybe they're just 55 years old and the insurance company is hoping to get rid of them before they have a heart attack or a stroke.
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All the executives at my company get a plan that is double mine in cost.
I have no problem with that.
For example, 2 grand annual physicals that check *everything* as opposed to our $300 physicals that test a lot of things.
But you just said they pay more for these plans? They may also drive cars that cost $200'000 as opposed to $30'000. Should we punish them for that too?
However, I share jefferson's view of many mildly wealthy people over the current view of 1% of the population having most of the wealth and a majority of the income.
What's "mildly wealthy"? The number corresponding to that definition has been dropping like a rock, to the point where a family making $200k per year is now "rich". Seriously? It's just greed and envy, and not only have we stigmatized wealth, we've now defined is as "anyone who has more than me". As someone who is intimately familiar with that psychology I ca
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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.
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Comment removed (Score:4, Interesting)
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I think it would have to depend on the device. for example, if I were buying a $5000 TV set, yeah get the extended warranty, for the $150 LCD monitor? Not a chance in hell.
For me it's not so much about price as it is about the type of device. TVs/monitors are the kind of device I wouldn't get an extended warranty for because the general trend in these devices is that they're getting better and cheaper at a rapid rate. Now I don't spend $5k on a TV, but I did just buy a 46" LED-backlit LCD for the same pri
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The thing is, most extended warranties are not worth the cost.
I recently got a microwave from Wal-Mart. The cashier asked me if I wanted a one-year warranty on the frackin' thing - I declined. I came home and opened the box, first page: This device has a 1 year warranty, if you have problems call this number.
The same happened to me at Staples and a few other places. Some even gave me a choice between 1, 2 and 3 year warranties when the box said in big letters: "5 year warranty". I swore never to set foot in
Re:You get what you pay for (Score:4, Interesting)
It also means that the salesmen are getting more and more persistent on trying to push the "extended warranty" down your throat.
And that with no information about that many cases where you expect it to be valid invalidates the warranty anyway. Like when using your mobile phone while sweating...
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.
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I worked for a PC manufacturer for a while. The margins on extended warranties are higher than on anything else, even than on catalog upgrades.
Also, warranties are rarely benchmarked. Well, quality isn't even benchmarked, but the experiences I've had with basic warranties (Asus never followed up on a procedure I started for a failed MB, Dell made me kneel below a desk to ... check out a PC that was supposedly covered by on-site service ...), those don't make me want to pay more for more crap.
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Dell specifically tells you with their basic on-site warranty that they'll come and fix it after you've talked on the phone with someone and troubleshooted it. If you didn't wanna get on your hands and knees with them, then it would've cost an extra $50 for real on-site service.
I just got an Optiplex 360 with the 3-year basic on-site warranty, and I already utilized it for a bad stick of ram. They had me reseat the ram and troubleshoot a few other things, but the process (from dialing, waiting on hold, and
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considering that I don't even see this washington post cite - I'm extremely skeptical that it went up even 10% in some way that would imply that this can be reliably tracked across all products that have extended warranties. I: would find such tracking to be a: impossible and b: grossly inaccurate. Some products have extended warranties included automatically and others have it as an option.
Really, a cite from within an industry says that it's own industry is running strong? Is this supposed to be a surpris
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My HP laptop is starting to crap out after only 1.5 years of light use. The wireless card went out while it was under warranty. I had to spend a good 3 days on the phone for someone to call me back because the call center supervisors don't work on weekends. Then I had to threaten to sue them for a violation of their own policy when they tried to tell me that reformatting the system voided the warranty (a copy of the warranty hosted on HP's website proved otherwise). Now
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All of my major appliances came with my house. The previous owner kept receipts so I know they all between 15 and 20 years old. Except for the dryer, which needed a $60 gearbox a couple years ago, they all work fine every day.
My CRT TV went out a couple weeks ago. I bought it when I was in the USMC so it is ~10 years old. The guy who sold me its replacement insisted I needed his extended warranty. Lots of these TVs break, he said. All made in China. He'd give me the warranty at half price.
To me, that is an
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You could say the same about health insurance. If it wasn't profitable for the insurer, it wouldn't be offered.
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I used to think that way and never get the warranty, but these days the sales people give you 'gifts' for taking it. Basically, they give you a 80$ gift for a 100$ warranty. Then it becomes much more likely you'll get the warranty (assuming you need the gift they offer). For me, the latest extended warranty was with my PS3, they offered a 2nd controller with the warranty for just 10$ more than the normal price of the controller. 10$ for some peace of mind? Sure.
Two points:
In such cases, read the fine print. While the salesperson may say "you get a new one" the warranty often only paysup to your cost of the device if repairs are more than the purchase price. So if your receipt shows a lower purchase price (due to a full price warranty and discount on the device) you will only get the lower price back; usually as a gift card.
OTOH, some warranties can be returned within a set period for a full refund. Get the discount, return the warranty later.
Re:You get what you pay for (Score:4, Funny)
I would like to know where you're going for pizza...
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Who said anything about pizza?!
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I bought a $320 printer recently. The seller offered an extended warranty for $80. This warranty covered years 2 and 3; it kicks in only after the manufacturer's warranty expires.
So do the math. 320/80 = 4; the warranty costs me 25% of the replacement cost of the product. Or, I'm betting at 1:4 odds that the machine will become useless sometime between 2 and 3 years old.
Now this is a name-brand product, aimed at office workgroups with a duty cycle of a thousand or or so pages per month. My use will be
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a car analogy is like a pizza, so by the transitive property, we should get a pizza, which, like, might involve driving a car.
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Doesn't sound very hygienic though...
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Insurance is always a bad bet, otherwise the insurance company will send itself into bankruptcy (thereby making those policies bad bets anyway).
So that's not the issue, the issue is can you afford the repair/replacement cost if you are the unlucky one with the failing item.
Insuring your house is a bad bet too, statistically it is cheaper to just pay to build a new one if it burns down then it is to have insurance. But most people can't afford to do that so paying more, statistically, is beneficial. I doubt