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

[zoomshorts]

90 percent of extended warranty stuff is pure profit for the manufacturer.
All this means is the consumers are getting stupider.

Not worth the money?

[Max Romantschuk]

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?

[MrMr]

I never accept those extended offers; If you have a bad device and it breaks within the reasonable period that you may expect it to work you don't need the extended warranty.
If you expect to beat the insurance company at a game they set up themselves you might be better off gambling with the insurance premium in a casino.

Re:Not worth the money?

[l2718]

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.

Re:Not worth the money?

[Sockatume]

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 to keep putting out self-destructing garbage.

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:Not worth the money?

[Max Romantschuk]

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

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

So sometimes it just makes sense to pay for an extended warranty. Especially when I know I don't have to worry about having to buy a new one for two years longer.

Like I said, peace of mind has a value too... :)

Re:Not worth the money?

[Sockatume]

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

Re:Not worth the money?

[xaxa]

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.

Re:Not worth the money?

[pmontra]

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

Re:Not worth the money?

[lena_10326]

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

Re:Not worth the money?

[addsalt]

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).

Re:Not worth the money?

[Max Romantschuk]

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. ;)

Re:Not worth the money?

[Xest]

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

Here in the UK, if a product breaks in an unreasonable timeframe, you don't have to worry about having a warranty to cover you, if the product was not fit to last it's reasonable lifetime (say, 5 years for something like a DVD player) then you have a right to replacement or repair. The caveat is that after the first 6 months it's upto you to prove you didn't break it, but for electrical goods this is a fairly trivial case of getting an electrician from a repair shop to just write you a quick note stating that's the case. Most retailers wont bother you with this though if it occurs within say, the first 3 years or so and I've never heard a case of them challenging a replacement/repair request within the first year or so for electronic gadgets and such. In the first 6 months they can only challenge the replacement if you're clearly at fault for the damage (i.e. if the gadget has coke all over it for example), otherwise it's upto you to choose whether you want a replacement/repair, or simply a refund for that period.

So in the UK, I wouldn't buy an extended warranty for peace of mind, because I have peace of mind that if I look after my product properly then I'm not going to be shelling out for a repair anyway.

To me this system makes sense, to put the onus on the manufacturer to produce quality products, else you're just encouraging companies to sell shit products so that they can sell you the extended warranty to go with it. They might as well produce quality products for the UK market because they'll only end up shouldering the costs anyway. You're also leaving the door open for dodgy extended warranties that companies try and get out of fulfilling despite you having paid for them due to hidden clauses and such, but when it's law they have little choice but to adhere.

The only reason I'd pay for one in the UK is if I suspected there might be a risk of accidental damage on my behalf, the only thing I can think of in that respect might be my phone if I accidently dropped it, but even that I don't pay for insurance on and take the risk, one day it may come back to bite me, but the amount I'll have saved in not paying it will more than cover the cost of buying a new handset anyway.

Re:Not worth the money?

[InterGuru]

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

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

Re:Not worth the money?

[j00r0m4nc3r]

Unless you make a habit of replacing all of your devices every year, the extended warranty is often useful

This is a sucker's game and you've played it. It's only valuable if you buy it for a device that fails. The only problem is you cannot predetermine which device will fail, so you end up buying it for all your devices. Let's say you buy 10 devices each for $1000 (just to keep the math simple), and you get the extended warranty for all of them, and you pay a 20% premium for it. You've basically paid and extra $2000, enough to completely replace 2 devices at the same price (but remember prices go down over the next few years so you actually get MORE device for the money in a couple years). The chances of more than one of those devices failing is extremely slim. Modern electronics are extremely reliable (and you usually pre-determine reliability by reading reviews to eliminate the really unreliable brands). I don't have spreadsheets and shit with the numbers, but you can be sure the insurance company does, and would not want you to see it. You're basically gambling, but you're doing it blind, without any knowledge of the odds. For all you know the odds could be 1billion:1 against you. The insurance company knows the odds, and you can be certain they don't work in your favor. You are much better off taking that $2000 and investing it, or even going to Vegas where you know exactly what your odds are.

Re:Not worth the money?

[Bai jie]

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?

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

[sopssa]

To add to this, this is how whole insurance industry works..

Re:You get what you pay for

[JoshWurzel]

I would like to know where you're going for pizza...

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:You get what you pay for

[thetoadwarrior]

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.

Good enough

[slasho81]

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, they're useless

[cerberusss]

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

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

Re:By some countries' laws, they're useless

[cgomezr]

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

I personally try to buy things that have a warranty of at least 3 years by default, since this seems to indicate that the manufacturer is somewhat confident that it won't break. For example Thinkpad laptops have cheap models with 1 year warranty by default, and more expensive models with 3 years warranty. I buy the latter.

Re:By some countries' laws, they're useless

[Anonymous Coward]

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

A lot of people don't realise...

[GrubLord]

... 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...

[BlueWaterBaboonFarm]

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

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

Re:You get what you pay for

[Cornwallis]

Which is exactly why we need Extended Warranty Reform. Hopefully, Dear Leader will make this his next target.

Re:You get what you pay for

[obarthelemy]

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.

There are things it's wise to insure

[Canazza]

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

[Anonymous Coward]

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

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

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

Re:Applecare is worth it

[kannibal_klown]

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

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

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

In the end it's either the CPU or motherboard that's fried, so they had to ship it out to. I only had about 3 months left on the Apple Care.

Why extended warranties are useless

[Cereal Box]

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

More than just an Insurance Question

[klahnako]

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

Re:You get what you pay for

[MrNaz]

I own a mobile phone store in Australia. Extended warranty and insurance are two products that the mobile phone provider is heavily pushing, offering commissions and minimum targets.

I can also say that extended warranty and insurance is essentially free money for the providers. If an electronic item does not break within 12 months on its own, the chances of a warranty-covered issue arising in the 12-24 month or later period is so low that it can be ignored. I don't think I've *ever* serviced a customer with an error that was not user-caused (i.e., outside warranty coverage) after the 12 month mark.

Extended warranty is nothing but an unmitigated rip off.

Re: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:iMacs, I will not go without extended on mine

[Rotting]

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.

Stupid Stupid Stupid

[bsDaemon]

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.

Extended warranties are mostly profit

[Anonymous Coward]

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.

Re:You get what you pay for

[rhsanborn]

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.

Its purchasing a quality drop option...

[vlm]

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

[GauteL]

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?

Any Decent Warranty Companies Out There?

[Slashdot Parent]

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.

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.

Re:You get what you pay for

[TheMeuge]

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.

Re:You get what you pay for

[Hijacked Public]

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.

Re:You get what you pay for

[Chris Burke]

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.

Business class warranty uplift on a notebook

[Rastl]

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.

Re:You get what you pay for

[cptdondo]

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.

Re:Where the hell do you go for pizza?

[maxume]

Naked ladies are at least as likely to wash their hands as clothed ladies. Being that they are naked, there is even some chance that they are more likely to have taken a recent shower.

Re:You get what you pay for

[Qzukk]

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.

Requisite Simpsons' Reference

[bradgoodman]

[Dr. Hibbert: Nailing a nail into Homer's brain to restore lost brain damage brain damage, while trying to assess the amount of damage]

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

Lisa: "Perfect!"

Re:You get what you pay for

[TheMeuge]

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).