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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.'"
90 percent of extended warranty stuff is pure profit for the manufacturer.
All this means is the consumers are getting stupider.
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...
.: Max Romantschuk
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.
To add to this, this is how whole insurance industry works..
I would like to know where you're going for pizza...
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...
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Why not just charge the higher price and give everyone a longer warranty?
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.
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.
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 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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... 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.
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.
Which is exactly why we need Extended Warranty Reform. Hopefully, Dear Leader will make this his next target.
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.
The Cloud - because you don't care if your apps and data are up in the air.
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.
It pays to be obvious, especially if you have a reputation for being subtle.
I got the HD and the screen replaced on my HP notebook during the 3 years warranty period. The replacement of the HD wasn't really needed because the system malfunction turned out being due to a Windows hiccup (and I upgraded to Linux) but they insisted to ship me a new part. Maybe they wanted to get rid of old 5400 rpm disks. The screen started to develop whitish spots close to the end of the 3rd year of warranty and a technician came to my home and replaced the screen with a new one. In both cases I only had to call the customer service and they sent me the parts and the technician. I was more than happy with the service so I bought another 1 year next business day warranty period.
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.
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.
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 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 it was under warranty. If this had not been covered it would have been cheaper to buy a new one.
I look at the warranties this way, what is your impulse buying threshold and what is your "I can afford that" threshold. Very similar to how you buy insurance for home, auto, and such. What is the amount your willing to be out if case something goes wrong. For me that stops at $500 minus the cost of the extended warranty. So its a $700 item and the warranty is over $200 I won't get it.
If you finance it, insure it or get a warranty. Don't bother with extended warranties on cars and if you must, only from the manufacturer
* Winners compare their achievements to their goals, losers compare theirs to that of others.
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 surprise?
This is like when MS says that sales are strong, or MPAA/RIAA says that the industry is dying, and fact is directly the opposite. There is no way to verify accurately.
People who buy extended warranties, etc are suckers and the companies are simply banking on that (and have an industry of making bank on said suckers). Of course this depends on the product as to whether it's more or less likely to fail.
Your non-car analogy is not welcome here.
I hate printers.
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, I've been lucky (?) inasmuch as the device died during the extended warranty so it wa smoney well spent.
Luckily, in the UK you get aminimum of 1year anyway and potentially a further year under EU rules but most retailers are ignorant of the newer rules and try to kick pack (but fail).
I want a list of atrocities done in your name - Recoil
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.
I hate printers.
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.
The essence of time is transient. Always be sure to make haste slowly.
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.
I'm a consultant - I convert gibberish into cash-flow.
After my 5 year old washer died, and they wanted $126 service call plus $170/hr plus $350 for the part to repair it, it was cheaper just to buy a new one.
I've not had a washer last 5 years in my lifetime, so I figure if I could just "pre-buy" a new one for $280, as I did with my new $900 LG washer, it's worth it. Repair is not an option because for some reason, fixing a washer costs $170/hr for labor and astronomical dollars for parts.
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.
a car analogy is like a pizza, so by the transitive property, we should get a pizza, which, like, might involve driving a car.
rewriting history since 2109
I've got an Asus G1S. Originally it had an Nvidia 8600M graphics chip which failed. First time it happened they swapped the motherboard for another one with an 8600M. Next time they swapped it for a motherboard with a 9500M GT. Both swaps were free, even though the replacement motherboards are probably pretty expensive. At that point I was quite close to the end of the two year warranty so I asked if they'd sell me an extended warranty. Needless to say they declined. Mind you the 9500M GT is supposed not to have the defect the 8600M had.
Still there are cases where an extended warranty makes sense. Still efficient companies don't sell products where it does.
echo -e 'global _start\n _start:\n mov eax, 2\n int 80h\n jmp _start' > a.asm; nasm a.asm -f elf; ld a.o -o a;
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.
Or products are getting shittier.
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 that it's out of warranty, the hard drive, the battery, and the left hinge are all broken/breaking.
As companies realize that they can spend less and less on parts and make crappier and crappier products, they're going to get more and more smart consumers that buy the extended warranty and then make the company pay to fix every little problem caused by their own greed.
-1 disagree is not a modifier for a reason. -1 troll, flaimbait, redundant, overrated are NOT acceptable substitutes.
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.
I'm a consultant - I convert gibberish into cash-flow.
I've found that if I don't buy the extended warranties on my electronics that I've more than made up for the cost of replacing any of them inside their normal service life due to unforeseen failures.
Maybe this has less to do with consumers, and more to do with the pressure salespeople are under to sell extended warranties (i.e. Best Buy, where I've heard each salesperson has a quota to meet)? As a salesperson, and if I were morally bankrupt, I would certainly use the recession to persuade a customer to get a warranty.
"I never had a insurance (except where forced by law)"
Somehow I don't think your observations about insurance are based on experience.
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.
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
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 product is no doubt providing an incremental sales boost. But the upsell is getting more forceful, and that's certainly about the economic concerns about the retailer, not the consumer.
This was mentioned in an earlier reply from a Slashdotter in Australia, but I live in the US (ME), and we have similar legislation. We have a state law called the "Implied Warranty Act", where all goods, including used goods (except used cars, unless otherwise contracted by the seller), are protected for 4 years from date of purchase from manufacturing maladies. This is to say, as long as the item is used normally from day to day, the manufacturer is responsible for the costs at a LOCAL repair facility. For instance, my father has a 3 year old microwave (major brand over the range model) in which the magnetron went bad. Since he is protected by this law, it cost him nothing but time to get the microwave repaired.
Your analogies brighten my day like an unexpected second pizza.
I never spellcheck and I freely admit it. Save your karma for more worthwhile "lol erorrs" replies
Who said anything about pizza?!
Oh, yeah, it's not easy to pad these out to 120 characters.
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 finishing the call) took 25 minutes. I called early enough that we had someone come the same day too.
I had a Digital (yes, DEC, back in the day!) laptop that had the following parts replaced under the three-year warranty: keyboard, screen, hard drive, motherboard, CD drive, power adapter (everything except the chassis was new, and some of that was done overseas). You have to ask yourself at a certain point, is this a really good warranty or a really crappy piece of hardware?
.sig withheld by request
I only get warranties for things that I know I'll ruin anymore, such as office chairs. (protip, tape the warranty to the underside of the chair) For anything under a grand or so, it's just not worth it. If it fails after the warranty period, chances are a similar piece of technology is much cheaper now. And think of all the money I saved by not getting the warranty after over my lifetime so far. So if I have to drop a couple hundred on a new gadget because the old one broke, it's not that big of a deal.
Not to mention what other people have mentioned, what are the chances I'll actually find the warranty and receipt when it's actually time to collect on the warranty. I'd like to get organized, but with a 1 year old--let's get realistic, I'm not.
Use an AMEX card to pay for your stuff. They doubles the factory warranty up to an additional year and provides 90 days of accidental breakage or loss. I've used it several times to get stuff fixed and replaced. The AMEX I have does not have a yearly fee and I pay it off every month so the additional cost for this coverage is nothing. I know this is not the same as what some extended warranties offer but this is additional coverage and it is free.
I got screwed over by BestBuy on an extended warranty for a under cabinent microwave before so unless I can get the extended warranty for free or for a very small % of purchase cost, I don't get them any more.
Bad boys rape our young girls but Violet gives willingly.
I could sure use some naked lady waitress action...
This isn't the sig you're looking for... Move along.
I don't think you can sell electronics with a shorter than 1 year warranty in the UK anyway, and that is the liability of the *seller* anyway, under the Sale of Goods Act.
http://news.bbc.co.uk/1/hi/magazine/8253915.stm
So that was standard practice.
In my business I always purchase the HP extended warranties on the laptops. Never on desktops as I consider them disposable. HP's service has always been very good. Next day onsite replacement of any faulty parts with no questions asked.
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.
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
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.
ACs don't waste your time replying, your posts are never seen by me.
A year ago I purchased a $1200 TV. The store offered a $300 extended warranty. This means they expect at most one in 4 of these TVs to fail in the 3 year period. A consumer review service indicated one in 30 of the TVs failed. At these failure rates, it's much cheaper for me to buy a new TV if one fails: $37,200 for 31 TVs (30 without extended warranty + 1 replacement), or $45,000 for 30 TVs with the extended warranty. (Obviously, I'm not buying 30 TVs. But 10 over the rest of my life would not be unreasonable, saving me over $2000.)
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!
I aim to misbehave.
I almost never buy these warranties, with a singular exception:
Big screen DLP televisions.
The ability to have a bulb replaced for free pays for the cost (150 dollar bulb, 90 dollar 5 year service plan). They will replace two bulbs. If I lose one, it's worth it. If one hasn't failed in 4.5 years, I'll just kill it. Woo, profit.
Just another ignorant American.
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.
I REALLY want to know where you get your pizza!!!!
That one was crappy. Definitely :-)
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.
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 Best Buy again after they claimed the gold USB cables were faster than the 'normal' ones (I almost punched the guy) but I would like to find out what they're offering.
Custom electronics and digital signage for your business: www.evcircuits.com
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 than would appear based on the retail price of the product.
For durable goods, a service contract might be a better idea, but in my case I'm reasonably confident of my ability to diagnose and repair a lot of the common things which go wrong, so I still skip them. If you're not at all handy, the extended warranty might be worth it.
There's also the inconvenience. Getting a new device is usually much easier than jumping through the hoops required to get warranty service. And often faster, too.
And a lot of times, extended warranties (particularly when not from the manufacturer) are simply complete ripoffs. For instance, I once got a digital watch as a gift, with extended warranty from the store (Sears, to name names). Which in the small print excluded case, crystal, battery, and band. Aside from the battery, that pretty much covers everything likely to break. Sure enough, the case did break where it attached to the band -- not from abuse, either. I brought it to the store and they pointed out the warranty didn't cover the band. I pointed out the band was fine and it was just where it attached that it was broken... fortunately they didn't recognize that that was part of the case.
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 insane pitch. I just agreed to give you $1000 for a TV that you now tell me will probably break somewhere between the 1 year warranty that comes with it and the 3 year you are offering. I'm coming off a TV that lasted 10 years. I heard this same pitch while helping a friend buy a laptop at Fry's. Heard someone getting it from a washing machine salesman at Lowe's.
What these people are really selling is fear. And right now people are prone to being afraid, so the pitch works well. Get the idea out there that modern electronics are junk, not just one brand but all of them so there's really nothing you can do about it, then it is easier to sell people warranties they'll probably never need to use.
"Sacrifice for the good of The State" - The State
From the summary the article mentions this.
45 days ship and wait vs within a week in your house. The warranty is generally better than the factory one.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
You could say the same about health insurance. If it wasn't profitable for the insurer, it wouldn't be offered.
By the same argument 99% of people who buy a term life insurance policy won't claim. Its not the chance of needing to claim that counts but the value comparing the premium to the payout.
Pizza analogies make me hungry, can you please use an automotive metaphor? And anytime you have ham and pineapple, toss in some sliced pickled jalapeno peppers (nacho style peppers) to really get things rockin'
You have the right to remain sentient. If you give up the right to remain sentient, you will be elected to public office
Extended warranty on earphones. Oh they break fast so it SEEMS like a good deal, free replacement. Except wear and tear are not covered and what do they break off? Wear and tear... AND often within regular warranty too.
I think people got jealous of the lawyers, what with them surviving the nuclear holocaust and all, and thought "how can we be lower then the lawyers". And the answer "sell mobile phones". Good luck!
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
True, true. I bought a Best Buy warranty for my flat panel. Not because I was pressured like some people are, but for two main reasons.
Odds are I will never use the warranty, but for an extra $150 or so it was a good hedge.
24 beers in a case, 24 hours in a day. Coincidence? I think not!
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 price as the 20" LCD monitor I bought five years ago. It's quite probable that by the time my TV gives up the ghost during what would have been the extended warranty period, I'll actually be looking forward to the chance to buy a better device for less (I do want my washing machine to last 6 or 10 years, and it'd be nice if any problems that came up were covered.
The enemies of Democracy are
Better yet, the cheaper brands (think house brands like Insignia, Dynex, Apex and the like) warranty terms can be quite horrible. Sure it's a 1 year parts/90 days labor, but after 90 days, it can be $200 just to see what's wrong. Further, you have to ship the product to the factory (if you're lucky, it's in the country, if not, well, have fun shipping it back to China!). Oh yeah, it'll cost you $100 to ship that TV back, so it's already $300 spent before you even can get it fixed. At least some extended warranties allow you to take it back to the store, and they'll ship it back for you. Or hell, sometimes they'll come to you and fix it there.
It's all a benefits vs cost thing. Sometimes it's worth it (or essential - think financing - you want the warranty to cover at least the finance period).
HD Guru has a writeup on bargain-brand HDTV warranties.
And yes, warranty support is one of the most expensive parts of anything manufactured today. So building it into everyone's product just means someone else will come about and offer a shorter warranty but lower cost.
Overrating capacitors in switchmode supplies is a pretty good way to get short life out of a product... I lost all respect for Westinghouse that day, not that it matters that much.
Reason I bring this up, is that with switchmode power supplies, and cheap manufacturers, there's a lot of potential for failures after around 1-2 years... 1-2 years in a marginally designed product may actually be at the end of the bathtub. Not what you might expect from electronics, after the last 20 years.. where if something ran for 1 year, it'd run forever.
I sadly expect that the new washers and dryers and fridges and TVs, will not last like your old washers and dryers and fridges and TVs.
That doesn't mean the extended warranty isn't a ripoff.. they can weasel out, they make the interest on the money, and your time in doing whatever to get it back to them or the store and explain the problem is valuable. I never buy extended warranties myself.
Same here with an HP desktop. 11 months after purchase, it started to fail. I had a heck of a time with HP on the line, insisting it was out of warranty. They finally did determine it was still under warranty and fixed everything for no charge.
Now it's just died again. It's 16 months old, very light use, and completely useless. HP support has told me:
Forget that; it breaks twice (conveniently the second time about four weeks after the last repair warranty expired) with 16 months of light use? I'm buying a new PC, seriously considering the extended warranties, and it won't be an HP.
Yeah, I'm bitter after spending way too much time on the phone with them.
It depends on what you buy them for.
I've made a profit on my car warranties ( a huge profit actually ).
I've made a profit on my home warranties ( I use american home shield- every year they cut some benefit- at some point, I'll stop using them- but for now, I've saved more ($350-$1100 a year) than I spent ($480 a year). And it gives me great peace of mind.
My one TV warranty saved my ass on a big screen TV.
I don't buy warranties for electronic objects that cost under $500.
I typically won't pay over 8% for a warranty either.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
That is the best investment I could have made. Buying a business class notebook through work's discount program got me a much better product than the consumer one. The warranty uplift cost $79 for three year, next business day, onsite warranty service. I've had to use it three times. The last time was 2 years 10 months after I bought the notebook and they sent a new one rather than fix the old one.
Best of all they hosed the warranty transfer so I could buy a new warranty uplift (buying one off the 'old' warranty was much more expensive) so I've got a new notebook and 3 years of great warranty service. I see a non-fixable hardware failure happening 2 years and 10 months from the replacement date.
Extended warranties can be worth it if the warranty actually improves the service you receive. Spending a little money to go from taking/sending the product to a service center to having in home service is great for things like large appliances and other items where it's just a headache to try and get the thing anywhere or when you don't want to or can't be without whatever it is.
Then there's the warranties for stupid products that will cost less to replace when they do break than to deal with trying to get it fixed. Microwaves, keyboards, stuff like that. Sometimes the price of the warranty is the same as the item. I despair for humanity when I see people buying them.
When people start dying for lack of a TV, I'll back your argument.
I think that it's not right for one person to have a gold plated plan and millions (billions?) of dollars sitting in the bank while others are dying for lack of health care and food. So I'll vote accordingly.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Someone called me about buying an extended warranty for my refrigerator. She told me that she personally thought they were a great deal. I told her she should look into it, they wouldn't be cold calling if the fridge was really all that likely to break down in the period they were selling the warranty for.
Nerd rage is the funniest rage.
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 perhaps a thousand pages a year. The printer sits in a hope office, in an area with few electrical storms, in a controlled environment.
I'm not willing to take a 1:4 bet. At a guess, 75% of the price of the warranty goes to the retailer, with perhaps 25% going to the warranty itself.
I'd take the bet at, say, $20.
I bought an R/C boat for my son at Toys-R-Us; it cost $50 and they offered a full replacement, no questions asked warranty for one year for $3. I bought it. 50/3 = 17; chances are pretty good that my son will trash the boat in one year. (Actually, he didn't; I did. But we got it replaced.)
So it's a question of which side of the bet you are willing to take.
... and what have you done about the millions dying in Africa?
I think I will go ahead and let them help themselves to everything you own, sans what you absolutely need to survive.
Deal?
So don't buy a branded box.
Build your own PC. If a part is bad, you just RMA it. No bullshit, no having to send the whole thing in.
I know that companies like Asus have 3 year warranties on motherboards and video cards, AMD has a 3 year warranty on their processors, and companies like OCZ have Lifetime Warranties on RAM, SSD's, and PSU's.
Quit getting ripped off by the computer-in-a-box companies.
Warranties/insurance for expensive items make sense. If your home burns down or your car breaks, you might not be able to afford to fix them. But it doesn't make sense for cheap things. You see the companies selling them (as opposed to giving them away for free) are making a profit. So the money everyone gives them exceeds the money the money they will give out. PLUS you have the rather large inconvenience of attempting to get your money if the product breaks. Not easy.
So the idea of paying for a warranty for something less than a month's salary, seems extremely counterproductive. You can afford to replace it if it breaks down due to bad luck. The only reason to do so is if you think the chances of the piece of crap breaking down is GREATER than the warrant-er thinks + the inconvenience of dealing with them.
Especially considering you probably buy more than 10 pieces of 'warrantable' items a year. It makes FAR more sense to simply put an extra 10% of the cost of each item into a 'warranty jar'/bank account and when something breaks, take the cash out of that.
excitingthingstodo.blogspot.com
Ironically, I ahve found there is no correlation between price and pizza quality.
The Kruger Dunning explains most post on
Plenty of insurance companies are essentially coops.
Nerd rage is the funniest rage.
That's how insurance works. My insurance company is a for-profit corporation, and charges me significantly more per month than it expects to pay out. Were I to live long enough for all the risks to balance out, I'd be better off without the insurance and just paying out of pocket for all sorts of things from the money not spent on premiums.
However, not all the risks balance out. There's eventualities I just can't afford to deal with without considerable hardship that are very unlikely to happen. For those, I pay money to make sure I can afford to deal with them if they happen. I've got fairly high deductibles because I can afford to pay that much, and it saves me money on my policies.
Similarly, you might want an extended warranty on a big-ticket item, since you may not be able to replace it otherwise, but if you can afford to repair or replace something the extended warranty is not worth it.
"When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
Exactly. I can't afford 400k for open heart surgery if I need it. On the other hand, the 200 dollar LCD monitor or 300 camera I bought, I can afford to eat that cost, and the cost of the loss is not nearly so catastrophic.
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.
If I have been able to see further than others, it is because I bought a pair of binoculars.
Homer: "Extended Warranty? How could I go wrong?!"
Lisa: "Perfect!"
You know what's worth getting the extended warranty on? Ink jet printers, if you use them with any frequency.
The home models are pure crap. I can almost guarantee you that it will die within about 3 years. It'll break a roller, or get clogged with ink, or some stupid scrap of paper will get caught way down there, or some dumb thing. The lights will blink in an unhelpful manner.
Then you march down to the Worst Buy you got it from and get it serviced. Except no one there has any knowledge, let alone knowledge of printers. They can't fix it, and the thing is so damned disposable it isn't worth the freight to ship it back.
They'll punch some buttons then tell you it'll be a few days to fix the thing. If they can't, and they won't, you'll get a new comparable printer as a replacement.
When they give you that printer, offer to buy the extended warranty again. It'll cost you another $20, but you'll get a newer model, and it will come with a "full" set of cartridges.
Do this right, and you'll never have to buy a new printer again.
UTF-8: There and Back Again
All the executives at my company get a plan that is double mine in cost.
I have no problem with that. It's their right- it's a capitalist system and I'm fine with capitalism.
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. I think that much concentration is *bad* for our country's political and judicial processes and I'm fine with raising taxes to 50 to 70% on income over a dozen million a year. I'll vote suitably.
I can see your point about the other issue and it should be considered. It's not what most people are talking about when they refer to gold plated plans however. Our executives have options not open to us on our standard plans. For example, 2 grand annual physicals that check *everything* as opposed to our $300 physicals that test a lot of things.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
to extended warranties.
There value depends on several factors:
Cost of the warranty, Service, Cost of the item being purchased, and risk they item you buy will break in a manner covered by the warranty.
Some example:
I have an extended warranty on my Big Screen TV. The warranty cost 100 bucks. It covers pretty much everything, including my kids hucks a Wii controller at it, or it falling off the stand. Pretty much everything. If it breaks it gets replaced.
Since I have an active household, Two kids ages 9 and 11 plus a lot of their friends, plus a lot of my gaming friends.
Looking at the risk v. reward it was worth it to me.
If I lived alone, probably wouldn't have gotten the extended warranty.
One of the 2 times I bought a pre-built PC was from CompUSA*. I bought the extended warranty. Why? because it was 30 bucks and covered 5 years. (this was in '97). 4 year later my computer wasn't functioning properly. I shipped it to them and they shipped a new top of the line model back. All at their expense. Again the risk reward was good.
I have had people try to sell me extended warranties which is exactly that, a manufacturers warranty with an extended deadline. Those are almost always a waste.
*It was a fantastic deal, and to this say I still suspect it was mistakenly reduced 80%
The Kruger Dunning explains most post on
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.
Heh...Are you aware of the large body of customer protection laws dealing with manufacturer warranties? Extended warranties are just that...extended. Above and beyond what everybody already gets.
I don't think the people you are arguing against would have a problem with the laws ensuring they all get health care coverage, but allowing for people to buy supplemental insurance for additional benefits. That's would be the proper analogy for extended warranties.
Visa Signature, Mastercard, and AMEX already provide extended warranties when you purchase items with their branded cards. It's just that nobody ever knows these benefits. If you want to find out what benefits your cards have, see the links below (benefits vary by the bank and card- Citi may include different benefits than Chase, etc)
Mastercard
VISA Signature
I recently bought a dishwasher at Sears Canada, and was offered an extended warranty. If you end up making no claims within the five-year term, you can call them and get your money back as store credit. Seems reasonable to me, so I went for it. Now I have to remember to call them after five years.
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 can tell you that we're a few inches away from a Bolshevik party.
I think that much concentration is *bad* for our country's political and judicial processes and I'm fine with raising taxes to 50 to 70% on income over a dozen million a year.
As recent legislative efforts have shown, that's not what's happening, and rather taxes are being raised across the board on families earning $150k or more. Considering that the truly wealthy have a ...wealth... of resources that allow them to minimize their tax burden, it is easy to see that this is only going to hurt the middle and upper middle class.
Specifically, our current Democratic administration will continue the efforts of the previous Republican administration in eliminating not just the upper middle class, but the very concept of being able to earn wealth through work... not only through taxation, but also through eliminating the concept of high-paying salaried positions (such as doctors).
When I get the "You need to buy the extended warranty" pitch I look incredulously at the salesman and ask, "Are you telling me this is no good?". The vast majority of these extended warranties are just plain rip offs.
Exactly. If the device is, for instance, a laptop that you actually use to work, $200 buys you three years of assurance that if that thing breaks, the manufacturer will send a technician to take a look at it within a day or two of your call.
If you just leave it at the regular warranty, you're stuck packing the device up in a box and hoping UPS/DHL/* don't make the problem even worse playing Dodgeball (dodgebox?) with the package... I sure as hell know I'm going for extended on-site warranty for my next laptop.
At the risk of stating the obvious, do the math.
Do a rough calculation of the percentage that the warranty costs vs. the value of the item. Then make an estimate of the probability that the item will need repair during the period of the extended warranty (say year 2 and 3) of a 3 year extended warranty. This often looks like a toss up.
Add to that the fact of depreciation. The computer you pay $1100 for today will be worth $100 in 5 years. In this example it drops in value about $200 per year.
Add to that the hassle in getting a warranty repair ( your time involved in finding your paperwork, getting the warranty company to actually honor the warranty, your own willingness to persist in getting the repairs completed, etc).
It almost always turns out that you would be better off saving the warranty money in a replacement account that you could use when some item failed.
I think having millions more people making 10-12 million a year would be much healthier for the country than a few dozen making billions of dollars and hundreds of millions of dollars per year.
Clear enough?
I think having 1% of the population owning everything and getting a majority of the income is destabilizing and sets us up for a violent, bloody revolution.
---
However...
http://mediamatters.org/research/200801060004
In fact, contrary to Gibson's suggestion that $200,000 is a typical, middle class household income in the United States, the U.S. Census Bureau's data for 2006 -- the most recent year available -- place the median household income at $48,451, and the mean household income at $65,527. According to the Census data, only 3.4 percent of U.S. households have an income of $200,000 or more.
3.4% is getting into outlier territory. So compared to most americans, they are wealthy. Not fabulously wealthy or millionaires but it's hard to say they are middle class.
Edwards said..
EDWARDS: Thank you. What you see happening in America today -- if you're president of the United States, and you're looking at this from altitude -- is you see very few Americans getting wealthier and wealthier. You see the biggest corporations in America, profits through the roof. Exxon-Mobil just made $40 billion -- record profits. All of that happening at the same time that we have 47 million people with no health care; 37 million who will wake up in this country tomorrow worried about feeding and clothing their children.
---
Arguing about the tiny percentage there at $200,000 is the conservative version of "protect the children and save the old people" game by the liberal side. The fact is the folks making $200,000 are a tiny slice and just past them, there is a population of people who are taking all the wealth of this country. Whose income has gone up 20 to 30 times since the 90's while the other 99% of the country (including the $200k slice) suffers a slow death of a thousand cuts. While bread, gas, housing have gone up 200% to 400%, the other 99%'s wages have only gone up 50%.
The wealthy have successfully propagandized a large block of the poor to voting against their own interests and voting for the interests of people shipping their jobs overseas. I'm not sure how much longer this will go on before folks wake up. I get the impression they are starting to wake up in Michigan at least.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
It all comes down to math. For the extended warranty to be profitable, we know that:
WarrantyCost > RepairCost * ChanceOfFailure
over the set of all items on which the warranties are sold.
This is simple insurance. We do this for things like medical bills because the repair cost is so vast that it will wipe us out even if in the long run, it costs more. But for electronic devices, the repair cost is generally bearable.
Statistically speaking, you will have more money at the end of the day if you just spend the money to repair items when they break rather than taking bets against the house that the item will break. The only conceivable case where this might not be true is if you literally cannot afford to repair an item. This seems unlikely assuming you are spending responsibly on the item in the first place.
Even worse, by taking the warranty, you are essentially forcing yourself to repair any failures. Suppose you decide that you don't really need that second TV three years down the road...you still paid to get it fixed.
Extended warranties are like lottery tickets. They are for the mathematically ignorant.
The cake is a pie
The big difference is that the insurance industry (for all its faults) insures against things that people have little hope in paying for, but that are rare.
For instance, if the chance of my house burning down is %0.00001 and it'd cost $500,000 to replace it, that's a good deal as I'd have little hope of coming up with $500,000. This is true even though it costs more statistically speaking. In the "long run" if I owned 10,000 houses and could afford $500,000 easily, the insurance would be a bad deal.
On the other hand, if the chance of the TV breaking is 5% and it costs $200 to repair, I can bear the burden of the unexpected cost, and I am much better off going for the "long run" and relying on the statistics.
The cake is a pie
Either you are unlucky, or you are buying from people who are selling the extended warranties at a loss.
Mathematically speaking, it's one or the other, and given the effort that goes into selling I wouldn't bet on the latter.
The cake is a pie
Exactly, medical insurance is a must because the cost is too high and, imo, it's not worth gambling your life over some cash. With most electronics that's not the case and you can set aside money in a replacement fund in a savings account, have the money you would have spent on the warranty plus interest.
Modern electronics are very reliable and the extended warranty industry has grown up to take advantage of this. You'll never hear from the 99.9% who have no trouble at all with their "widget" and that one that does will squeal loudly - and maybe collect on his warranty. Recently, the warranty companies have been trying to trim even that liability from their operations and consumers are finding that the warranty they bought has conditions and "gotchas" that prevent them from receiving the coverage they thought they bought.
If you're buying something that's known to be failure prone, then the warranty MIGHT be a good idea - just remember that the warranty company knows it's unreliable and has priced the coverage accordingly. It might prevent a large bill that surprises you - but in the long run you'd be much better off to just say NO to the coverage.
Here's my rule: if the extended warranty is important to your purchasing decision - you can't afford the item. You can either pay for the repairs, or you can pay for the repairs plus a nice fat profit for the retailer and warranty company. Does this sound like a good deal to you?
When purchasing my last iPod, the BestBuy salesman wanted to sell me the ext warranty. I declined, and he expressed concern, because "they generally don't last much more than a year". To which I responded by showing him my generation 2 iPod that I had been using for somewhere around half a decade. I explained that it still worked just fine, I just wanted more space.
The point is, be careful with the things that you buy. Don't treat your portable devices like they are indestructable. Don't throw your WiiMote at your TV. Use an air canister on your computer. Change the fluids in your car.
And don't spend money on something you can't afford to lose or replace or repair.
"I can tell you that we're a few inches away from a Bolshevik party."
But clearly know nothing about history or politics for that matter.
IANAL but write like a drunk one.
I am sorry, but this is a bullshit excuse.
Get a filing cabinet, put aside 2 or 3 divisions for receipts and guarantee papers (electronics, software, others, whatever!) and then file them in chronological order.
Unless you are buying something every day (are you?) I fail to see how somebody can't stick to such basic method of archival.
IANAL but write like a drunk one.
The only things that are not user replaceable are things soldered to the board, and this only because it was made by a machine in all likelihood,
But an HDD?
Really?
IANAL but write like a drunk one.
So you don't know ...
IANAL but write like a drunk one.
I have seen the term mentioned several times in the thread.
Do people really get peace of mind by buying overpriced, unnecessary cover?
My "peace of mind" (whatever that is really) I am sure is not going to be disturbed if I am unlucky enough to have to replace something that breaks out of its statutory covered period (quite long in the UK).
So far I have never been in that position, when something has broken it is normally between the warranty period.
If you just sit down and do the math the numbers simply don't add up. Now, knowing I am not wasting my money unnecessarily certainly gives me "peace of mind"
What people selling you guarantees are counting on is that you don't have time to make an objective judgement, which it seems many people don't do.
IANAL but write like a drunk one.
No need for that, just declare a minimum warranty period for consumer electronics. It should allow exceptions ONLY for mis-handling.
There's no good reason a TV shouldn't work for 5 years. It has no moving parts. If it can't make it that far with reasonable care (defined as not left outside, kids didn't spill a drink inside it, etc) then it's utter crap or has a hidden defect in manufacturing.
Things with moving parts like a computer, DVR, or DVD player should make it at least 2 years surely.
For those who will inevitably object that they have a right to by crap if they want to, fine. The new mandated warranty may be disclaimed so long as each face of the packaging contains bold notice covering at least 25% of the area reading "CRAPPY PRODUCT, NO WARRANTY" (or some such). The warranty will be in full force if the warning is in any way obscured on the sales floor or if the customer has not signed a form indicating that they have been verbally warned that they are buying crap with no mandatory warranty.
Given the way warranty repairs are handled though, it'll have to require replacement (not repair) and when replaced, the clock starts again at zero. That is necessary to avoid cases where the product fails a week before the warranty ends so they give you a crappy referb that will last 2 weeks at best.
From a purely practical standpoint, when the wealth of a society concentrates too much, the whole society starts to come apart. When it gets bad enough, there is generally a bloody revolution or the society becomes feeble enough to fall to invaders (often because the have nots can't see any reason their life would be worse under the occupation, so they don't fight it).
Bookkeeping was only one reason. There are other reasons why purchasing insurance at the cash register is bad: claims filing is more difficult with multiple companies, cost-wise it doesn't pay off, effectively works like a tax, better single policy single company insurance plans are available for all your stuff, no comparison shopping of insurance plans.
Camping on quad since 1996.
It depends on the model. I once had an iBook that required an almost complete teardown in order to get at the HDD. But these days most Apple machines have easily-accessible HDDs that are of course considered to be "user-replaceable."
A good portion of my job is to asset risk and advise on extended coverage and warranty enhancements for small/medium and enterprise businesses on there fleet of servers, desktops, laptops etc. From what I know from that and what I see I tend to only buy warranty on electronics that I spent a fair bit on and that I would be inconvienced if they were to fail.
You have to look at it how important is the device to you, how long to you expect to be using, and of course how much would it cost to replace the unit completely.
In business when it comes to servers for example you have to figure out how critical the server functions are, how long of a life the server is expected to have as well as the cost impact to the company if that server was to go down. Its the last one that usually has the most impact to a client, especially when they compare the cost of it down for a hour to how much the enhanced warranty is. Of course things like a test/dev server would likely get a reduced warranty compared to an exchange server or a domain controller.
Just take the general idea there and apply it to your own purchasing habits. Extended warranty on a cell phone... what you are fucking stupid will you even want that phone in a year after the newest of the new comes out? A TV or washer dryer that you want to last for 5+ years, I think its a good idea.
Be smart about it, listen to the salesman, ignore his pitch but listen to the details, what does this warranty do for you.
"I am a kernel in the linux army"