Extended Warranty Purchases Up 10% This Year

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.'"

Comments

Re:You get what you pay for

[sopssa]

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

[Z00L00K]

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:Not worth the money?

[beuges]

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:You get what you pay for

[Mortaegus]

It depends entirely upon the warranty provider and the terms within. Some of them really are worthwhile. Radio Shack had a great warranty about five years back (they've changed it now). And it used to be one of the best anywhere. Now, of all places, Officemax has a well thought out warranty offer. (Which I bought and used last year). Look at how the pricing is done, because that is where you can determine whether it is worth the extra purchase. They usually bracket the prices, in sections like $0-50 and $50-100 and so on. If the product is near the top of that bracket, it's going to give you the best warranty for your money. If it's in the middle, or near the lower end of the bracket, it probably would be best to walk away from it. I know it's hard, but if you read the terms and conditions, you can see precisely which ones are worth the money.

Re:You get what you pay for

[hairyfeet]

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. Plus some devices are more failure prone, like LCDs with the dead pixel problem. In a $5000 TV I'd be mad as hell if I got a few dead pixels in a bad spot. In a $150 monitor? Meh, it would just be relegated to secondary duty while I shopped for a little better one.

So for me it is a classic case of cost VS benefit, but doing my Xmas shopping this year I can vouch for folks getting extended warranties on sub $300 stuff where I'm thinking WTF? I guess with the economy in the shitter some folks don't like dealing with ANY risk at all.