Slashdot Mirror
Is Buying an Extended Warranty Ever a Good Idea?
waderoush writes "Consumer Reports calls extended warranties 'money down the drain,' and as a tech journalist and owner of myriad gadgets — none of which have ever conked out or cracked up during the original warranty period — that was always my attitude too. But when I met recently with Steve Abernethy, CEO of San Francisco-based warranty provider SquareTrade, I tried to keep an open mind, and I came away thinking that the industry might be changing. In a nutshell, Abernethy says he's aware of the extended-warranty industry's dreadful reputation, but he says SquareTrade is working to salvage it through a combination of lower prices, broader coverage, and better service. On top of that, he made some persuasive points – which don't seem to figure into Consumer Reports' argument – about the way the 'risk vs. severity' math has changed since the beginning of the smartphone and tablet era. One-third of smartphone owners will lose their devices to drops or spills within the first three years of purchase, the company's data shows. If you belong to certain categories — like people in big households, or motorcycle owners, or homeowners with hardwood floors — your risk is even higher. So, in the end, the decision about buying an extended warranty boils down to whether you think you can defy the odds, and whether you can afford to buy a new device at full price if you're one of the unlucky ones."
This is a problematic piece because it confuses an extended warranty and accident protection/insurance. Most extended warranties do not include accident protection, and that option tends to cost extra and require the base extended warranty, which is the problematic part. If FourSquare wants to offer cheaper, better extended warranties paired with accident protection, more power to them, but that's a very different thing than an extended warranty alone.
It depends- for example, my wife bought me a Nook Color a couple years ago from Staples, and bought the protection plan. About 3 months ago, it wouldn't start. I called Staples and within 2 hours my wife had an email from Staples with a electronic gift certificate for the original purchase price. I replaced my Nook Color running CM10 with a Google Nexus. I bought another protection plan for the Nexus based on that experience.
There are other products I don't purchase them for (such as video games or toys for my kids), because the failure rate is very low, and I'm not into throwing away money.
I don't have hardwood floors. I have tile. I'm safe.
It sounds like the summary is mixing and matching two different things, which are insurance and warranty. Generally warranties don't cover "drops or spills". Insurance is usually better, because once you're done with the device, you stop paying the insurance on it. With extended warranty, you have to pay up-front for the service, with the obvious assumption that you're going to own and use the device (and not lose it, upgrade to something else, sell it, give it away, or have it stolen) for at least a certain amount of time to make it pay off.
Better known as 318230.
When they sell you an extended warranty, they're doing it to make money. They have a much broader base to analyze, and they're very good at calculating how much to charge vs. how much they'll have to pay out, to end up with a profit.
It's the same with all insurance. However, unlike life, or health, or car insurance, where there's a low, but finite risk of being out a huge amount without insurance, with product warranties you're out no more that what you've already paid.
So, long term, no, they're not a good deal. Put the same money in the bank and you'll be ahead on average. Sure, there's risk you can still end up worse off, but not catastrophically.
"National Security is the chief cause of national insecurity." - Celine's First Law
If that many people break their devices, then the insurance premiums must be commensurately high, or they will not pay out. There's no way around that. An insurance salesman telling you that lots of accidents happen but that premiums are low is lying about something.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
I just see it as a sign for a lasting product. The seller believes in the reliability of the product, so he offers an extended warranty. So I prefer to buy things where the warranty is offered, but I don't take the warranty.
Just bought a new car (Honda: generally one of the most reliable brands) and the finance guy spent 10 minutes giving me "worst case scenarios" of how my vehicle could have all sorts of things go wrong and I'd be out thousands of dollars UNLESS I bought the extended warranty coverage.
I said "No, thanks" and I'm going to put $1,000 into a bank account to cover the "what ifs"
If you can afford to replace the device being covered, than they don't make sense. If you can't afford to replace the device, then it may be worth it, because even if it's a losing money proposition on average, it's worth it for the security of not having an unlikely event wipe you out.
That is, I don't have an extended warranty for my computer, because if it dies unexpectedly I can afford to get a new one right away. I do have an extended warranty for my car because if the engine dies unexpectedly that would be a huge financial problem for me.
I worked with a guy whose sister and brother-in-law worked for Mastercare (the warranty arm of Dixons (a "tech" shop like Best Buy)). They only extended warranties that they or anyone they worked with took were for washing machines. They said everything else wasn't worth it.
Best Buy used to have a warranty where the paid you back exactly what you paid for the device. So if your brand new original XBox that you paid $300 +tax for broke after 23 months they would give you $300 +tax and you could turn around and buy a brand new one for $200 +tax - since the price dropped by $100 after 2 years. Warranty return was no questions asked return for any reason and get handed a Best Buy gift card right there. How is this not a good deal?
The question is unanswerable without knowing the cost, and the terms, and what it covers.
A local electronics store has an extended warranty program where you pay X$ for the extended warranty, and if you don't use it, when the warranty is finished, you get a gift certificate for X$ to use, on any purchase over 2 x X$.
So in 2005 I bought a $5000 DLP TV, and paid ~$500 for 5 year extended warranty, which I didn't end up using. In 2010 I bought a new LED backlit LCD for $2200, and used the $500 gift certificate.
Admittedly there is a bit a claim process to go through (much like MIR processes -- fill out an online form, warranty plan number, name, address, etc..), and you only have 6 months or a year or something -- it wasn't unreasonably sort, but there was a limit, after the extended warranty expires in which to make the claim,.
I felt it was really a tremendous value.
I gave the old TV to my parents and it lasted another 3 years before the color wheel motor finally died.
I normally don't get them, unless the product I'm buying can be reasonably expected to last a long time, and the warranty includes some extras.
When I got a Dell U2410 monitor I got the five-year plan on it, because it offers advance exchange, and I expect a monitor to last five years at least. And I got a plan on my fridge, but that plan also includes a free annual maintenance check, and a discount on parts and filters.
If the warranties didn't offer those extras, I probably wouldn't have bothered.
...insurance company states that extended warranties and their corresponding value to consumers are a function of individual risk factors....duhhhhhhhhhh.
Most Visa and American Express cards come with a perk that will extend the original manufacturer's warranty for an additional year simply by purchasing the item with their credit card. The additional year is covered by the credit card company and usually has to be negotiated through them, but buying accidental protection coverage with that credit card extends that coverage for a year too. YMMV, check with your credit card company.
Best Buy and HP are on my I'll-take-my-chances list. When I've bought warranties from either, they've failed to honor them in more cases than not. HP spare parts are also sufficiently plentiful on eBay and I've gotten to the point where it's worth my time to just swap the parts out myself when something goes wrong. Admittedly this is atypical for the average consumer (especially when it comes to iPads and similar), but it's true at least for me.
Cell Phones? Asurion. Always. I've never once had an issue with them; I pay my deductible and I've got a phone on my desk at work the next day, every time. THEY are worth it. Yes I know that this is insurance, not a warranty per say, but ultimately it boils down to semantics insofaras Asurion gets paid monthly through my cell carrier while an extended warranty is a one-time payout.
Origin PC is another company whose warranties are worth it. Perfect support, perfect track record with replacement parts, and they've worked with me every time, without exception. I'll by warranties from them any day.
Tablets? Well, mine is a Toshiba, a company who's also been historically atrocious with warranty related matters in my experience, plus the tablet itself is sluggish and moderate-at-best quality so the device itself doesn't justify it for me personally.
This does raise a tangentially interesting business question though: we all know that businesses make a mint off the warranties and thus push them in order to bump the profit margin on the sale. I get that, and I'm okay with it. The problem then becomes the fact that it gives incentive for device prices to remain artificially high. If the device is higher priced, companies make more money. It justifies warranty purchases (also at higher prices) in many minds due to how expensive the device is. Now in the case of Apple specifically I'll give them a certain level of a pass on this because they are well known for honoring their warranties very consistently. Everyone else...not so much.
Thus, My original premise stands: certain companies make it worth it because there's actual peace-of-mind involved. I don't worry about my laptop breaking; I know Origin has my back without question. I don't worry about my screen cracking, Asurion will see to it that I can make calls tomorrow by noon. My Toshiba tablet? I have peace of mind knowing I'm screwed if the tablet breaks, as opposed to knowing I'm screwed if the tablet breaks AND I have a hundred bucks in Toshiba's hands whose only redeeming factor is having some underpaid foreign support representative informing me I'm screwed and my warranty doesn't cover whatever-happened-to-my-tablet.
I hardly ever purchase the extended warranty, reasons following the caveats :)
If the item is over $100 AND the item is a necessity that frequently breaks (I can't count the number of vacuums I've had to buy over the years that have just flat-out failed) AND the warranty is reasonably priced (I'll pay about 10%...no more than that).
The reasons that I *don't* usually buy the warranty is that I take care of my shit. I've had more smartphones than I can count and have only had 1 single incident that required a replacement (fell out of my pocket into a hot tub...I know, I know). I rarely drop my devices, yet (in the case of the smartphone/computers/etc) I use them constantly...I'm just "careful".
The other reason is that 99% of the time it requires keeping/filing paperwork and THEN having to remember that I actually bought the warranty 8 months later when the vacuum breaks. If I don't remember (likely), it's a waste of money to buy it...and I can recognize my own deficiencies in that area.
Not only that, if what I'm protecting against is shitty engineering I consider those costly lessons in what companies produce reliable devices. If someone offers me an extended warranty "in case of manufacturer defects" I will usually buy something else entirely. AFAIC if they are preempting a problem (or potential problem that they suspect will happen), they shouldn't be charging me so much for what I'm buying.
The people who want to buy extended warranties that cover accidental damage tend to have accidental damage more often than those that don't. We call this moral hazard.
What that means? Being careful with your stuff will pay off disproportionately compared to the cost of this insurance.
Also, given that most residential insurance policies have deductibles of $500 or $1,000, I don't think the loss of a few-hundred-dollar smartphone is exactly a catastrophic loss compared to having someone steal your car or having a kitchen fire.
Check the specific terms, but usually no. IMHO.
The extended warranty company already has your money. They have every incentive not to give any of it back in the form of a repair.
I had this exact issue with an extended warranty on a slightly used car. Something broke, but as part of the chain of breaking parts was a non-covered part, the timing belt (a consumable), everything after that was not covered. The initial break was a covered part, but that did not matter.
Their default answer was deny, deny, deny. Eventually they threw me a bone and paid half.
And people like this are the reason why people like me - who haven't killed a computer or smartphone or TV yet - don't buy coverage. :)
Decades ago (aka, mid 80s) this unique-to-my-city electronics joint opened up. Best Buy sized long before BB was around. During their grand opening, they had fog machines going,laser light shows, booth babes, the whole 9 yards.
My friend goes in and buys a laserdisc player from them, and buys an extended 3 year warranty as well. The extended warranty however, wasn't through the manufacturer of the LD player, but rather the store itself. Paid a ruddy fortune for the extended warranty as I recall (almost as much ad the LD player itself)
Less than 3 months later, the store was closed.
So rise up, all ye lost ones, as one, we'll claw the clouds.
FWIW, I got a ThinkPad in 2001, got the 3-year extended warranty. Two and a half years in, I bought another two year extension. I got some repairs under it. It was pretty cost-effective.
I still have that machine. Heck, I've used it in the last year because I had Windows stuff that needed XP.
My blog: http://www.seebs.net/log/ --- My iPhone/iPad app: http://www.seebs.net/seebsfrac/
Here is how I see it. One should never buy an extended warranty on anything unless such items have a reputation for failing. Only once have I owned a computer that has failed and that was a Mac iBook that I carelessly left in the back of a U-Haul truck driven from Los Angeles to Denver in one day at breakneck speed (my brother was driving ;-} ). After that trip, it would run for about a 1/2 hour before heating up and crashing ingloriously. My last CD/MP3 player (yes, I still use those) from Sony lasted ten years before it finally died. The quality of consumer electronics is getting quite good these days. The same can be said about most new vehicles in 2013. They have a reliability and quality that has never existed. I've owned three Ford Ranger pickup trucks. My current one, a 2006 model year, a gasoline engine, has 206k miles on it, runs better now than it did when it was new, and does not burn oil. The only things I've replaced on it have been a starter, an alternator, both headlights, and one tail light. Furthermore, I have never replaced a clutch because I float the gears. I religiously change the oil. My previous one had 240k miles on it before I drove it to Denver to give to my brother who then put another 50k miles on it before blowing out the engine because he didn't change the oil! Now if you were like a friend of mine who bought a 2001 Mercedes-Benz at the time when they were having serious quality and reliability problems, buying an extended warranty would be a smart thing. He did buy one and used it many times during the 88k miles he put on it because of those problems.
My point is if you buy something NEW and take care of it, if it's going to fail it's likely to fail during the factory warranty period because the defect will show up then. Now, if I were to buy a USED car I'd be crazy to not buy the extended warranty, especially if it was once a rental car. I can control how I take care of something like that after I've bought it but I have no control over how it was driven or maintained before that time.
It's really quite a simple choice: Life, Death, or Los Angeles.
Did you ever take them up on it? because I can tell you from my experiences with future shop (same company as best buy) that their extended warranty wasn't worth the paper it was written on. I had a camera die on me within the extended warranty period. no physical damage at all, not caused by a drop or anything else, it simply decided to throw an error message one day and wouldn't boot. When I took the camera back in to the store they told me they'd have to send it away and would let me know in a couple of weeks if it was eligible for the warranty. A few weeks later I was told my warranty claim had been denied due to "abuse". After escalating it through several levels of management and refusing to leave the store until it was addressed, they agreed to replace the camera, but not with an equivalent model, but only with the cheapest piece of garbage they had on their shelf at the time. In the end I managed to get half the cost of an equivalent camera to the one that had broken under warranty. And they had the audacity to try to sell me another extended warranty on the new camera!
And that was one of my better extended warranty experiences, I had one on a used car that was denied due to "pre-existing conditions" (I thought that's exactly what warranties were supposed to cover!) I never did get anywhere on that one. I tried to take my roofer up on his installation warranty after discovering that he had caused a leak in the roof, only to find out that he was out of business, and his parent company told me the warranty was only with the individual roofer, not the company...
I will NEVER under any circumstances pay an extra cent to buy an extended warranty on any product. They are fraud, plain and simple.
If the defect could have been triggered by excessively infrequent oil changes, then the request is relevant. If it isn't (e.g. it's about your brakes or suspension) then it isn't a relevant request.
If you're bargaining the price of a purchase down, note that the cost of an extended warranty may be negotiable too.
In Australia (Harvey Norman) I was offered a 3 year extended warranty on a laser printer for $50, supposedly reduced from $75. I declined. Some minutes later he offered me the same warranty for $30 and I accepted. The laser snuffed it about 5 months after all warranties expired. :(
When the device is expected to last well beyond the warranty period and you're not the kind of scumbag who breaks things just to take advantage of the warranty.
With their 5 day guarantee, if they don't have a refurbished item ready to ship back, why would they ever reimburse the original purchase price if their warranties are typically 12-15%? It would be cheaper to just refund the warranty cost.
I browse Slashdot at +3, Funny
It depends on how easy it is to get it fixed. For example, Dell's laptop warranty is awesome. They come out to your house withing like 48 hours and fix it on the spot. That's a lot different from shipping your laptop off somewhere and getting it back in two weeks. On the other hand, I am not willing to buy an extended warranty on most tablets because it is easier to just buy a new one when it breaks. Cell phones are similar. You often pay $50 to get the same kind of phone you had before. But that phone is probably free now (if you extend your contract.)
I've always bought the super-extended warranty-surance when I buy a Dell laptop. I generally buy a rather nice one, and I use it to make money. A day of downtime costs more than the warranty to cover 3 years, and next-day service is very nice. It covers anything I do as long as I can still read the service tag ID on the bottom of the unit. (For good measure, I tape over the service tag with clear tape to make good and sure that it's readable)
I have a similar warranty on my nice smart phone (currently a Razr MAXX HD that I love for having days of battery life) for $3/month, and I've used it.
But I don't have that kind of warranty on my TV.
I have no problem with your religion until you decide it's reason to deprive others of the truth.
Not necessarily. Unlike, say, car insurance? Selling device insurance is predicated on the assumption of more than just percentage, but in timespan.
Consider that you pay something like $10/mo for your $200 smartphone - not even two years in, and the thing is paid for at original price. One year in, and the device is likely amortized down enough to get a replacement phone of the same make/model for what the customer paid into it so far.
I'm sure there are other aspects as well, but that one stood out for me.
Quo usque tandem abutere, Nimbus, patientia nostra?
It is a transfer of risk: You pay a company to assume the risk of a device failing during normal operation. As with any insurance, it is limited in what it covers, and it is more limited than an accidental damage plan.
As to if they are worth it, well it all depends on your situation. Largely it is if you can afford to replace the device in the event it fails. Insurance is rarely "worth it" in the overall sense. I mean obviously insurance companies have to take in more money, on average, they they pay out or they won't exist. So it comes down to the individual loss: You insure things you can't afford to pay for.
So in terms of an extended warranty, well if accidental damage is you concern then you'll need something additional. It would be for a case where you have an expensive device that you really can't afford to replace, and do not wish to do without.
I've always bought the super-extended warranty-surance when I buy a Dell laptop.
I've had to use the extended warranty that I bought on my Dell laptop to fix an unusably loose power jack. But even with the warranty, it was still far less expensive than buying a MacBook Air just for the MagSafe connector.
Source...
Some companies have margins as high as 92%.
There's always something in the fine print that screws you over.
AND, if they are such a "great" deal, then why is there such a hard sell on these things?
I was at OfficeMax, and the manager of the store was pushing it and get this, he says you MUST have one because all the electronic stuff is junk! *and he pointed to the aisles of printers and scanners, etc ....*
If it's a bleeding edge thing yes I will buy an extended warranty.
For example I bought an extended warranty on my first large screen TV. Good thing I did too becuase the guts failed twice on it and I ended up with 3x the warranty cost being free repairs. Later ones are a lot cheaper and a lot more reliable.
Other stuff not so much. I bought one on a car because of the price - 8 year coverage for $1000 on a $40,000 car. Odds are pretty favorable the this one will pay off.
If that's in the warranty's terms, then perhaps you should keep the receipt whenever you buy the oil to do the changes yourself.
Sometimes I think the fraud in warranties is by the dealer *against the manufacturer* !!!
A few weeks after taking delivery of my Prius, I noted a wind noise at high speed near the right rear passenger door. I guessed it was the rubber seal, and told the dealer, who promptly agreed and replaced it under warranty, no oil change receipts necessary. But the problem wasn't fixed. Then I realized the noise was coming from the fan that cools the hybrid battery--i.e. working properly as designed...
There are parts like hard drives, batteries, and power adapters that die faster than the warranty. My old MacBook Pro killed six hard drives over four years, mostly while AppleCare still applied. I recall my previous MacBook killing numerous drives as well. My almost two year old MacBook Air has killed the cable on 3 power supplies. I've had my top case replaced on all three machines as well.
If you use your equipment heavily, then you should expect that ordinary wear destroys some components before the warranty expires.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
I've had two projectors. The first had $400 replacement lamps, while the second had $300 replacements. That was MSRP, comparison shopping yielded $300 and $250 respectively (knock another $100 off for knock-offs with extremely bad reviews). At the time mackcam offered lamp replacement warranties for $110 that covered two replacements during the first two years. Both times I got two replacements lamps out of the warranty with no hassle at all. Definitely worth the price.
The value of the warranty was so great it was a major reason I bought the second projector when the third lamp wore out. The next two lamps would have cost $700. Instead I bought a $600 projector, a $110 dollar warranty, and got an extra lamp and an upgrade to 720p for $10.
They're not warranties. They don't warrant anything at all. They're just insurance. Once you get that clear, it's a straight choice on the basis of cost vs benefit. A real warranty penalises the manufacturer for shoddy goods or inadequate service by making them make good the deficit. That is not the case here.
As the Uk experience with PPI and extended warranties shows. You cant watch daytime tv in teh UK with out seeing loads of adds for lawyers trying to get people to claim that they where misold extended warranties and PPI insurance .
I always purchase extended warranties for my laptop computers, and almost every time, I've had to use it. In each case, the covered repair would have cost more than the extended warranty did. Laptops use many components that are specific to that model and are costly to replace.
However, I never purchase extended warranties on desktop computers, and rarely on other devices.
make imaginary.friends COUNT=100 VISIBLE=false
I'm not klutzy, but once in Arizona, viewing the Meteor Crater, I had a choice of either dropping my DSLR or my squirming toddler, due to the squirming. I opted for the former, in a split second decision, and the camera fell into the crater. I was able to retrieve it, but it was broken. Instead of buying a new one, I fixed it. Myself. This is Slashdot, not Housewife Consumers' Journal. Some sharp edges I filed down, looks a bit beat up, but I still use it.
Some products are better to repair than to replace, like the monitor I'm using now--7 year old 1600x1200--hard to replace with anything more than 1080 rows (damn you, HDTV!). Started taking 5 minutes of warm up time to be usable. Then I learned the problem was due to old (bulging) capacitors. So $0.50 of capacitors later, and 30 minutes of desoldering/soldering it's good as new...
Not everything broken needs replacing...
I used it for my Xbox 360 twice. And on the second occasion I received a gift card for the difference of the original purchase. Best part was, new xbox and controller both times, WITH upgraded HDD's and whatever pack-ins were included at the time. I walked in, grabbed a new xbox, and took it to the exchange counter along with my old one. It was pretty hassle-free, aside from the ridiculously stupid wait times. They need to staff customer service better. Of course, I bought my Xbox going in knowing that it was likely to break, so it wasn't a big gamble to buy the extended warranty. And I imagine they were so used to seeing this by that point that they didn't bother to try and debate with someone bringing in a broken Xbox. That said, my brother had a similar experience with his original xbox and best buy as well. We've also gotten an enormous amount of use out of several other Warranties from retailers for various appliances.
It depends on a number of factors. First of all, before you go ahead and buy that expensive accidental damage protection from the manufacturer, check with your home or renter's insurance provider to see if they offer floater items. Mine covers theft and accidental damage in *and* outside of the home for much less than it would cost from the manufacturer. As for extended warranties, well that's really a calculation of many variables, but mainly: what's it worth to you? What is the original warranty period? Do you expect to be using it for that long? It is an acceptable amount of money for you to eat if you never end up requiring warranty work during the extended period? Most of these questions you can only answer for yourself.
We made the mistake of buying Electrolux fridge and dishwasher. An extended warranty for the two cost us 300+. However, we have had over 10 visits on the 2 and invoked lemon law on dishwasher. Now we have kitchenaide with no issues. However we have had over 5 visits for fridge with different issues, but they have to be more than 1 month apart. With this next call(yeah we have a call in), we will have to invoke lemon law again. And we will switch to kitchen aide. If u buy some appliance from overseas get extended warranty. Electrolux, frigid are poorly designed, built, and supported. The same is true of IKEA junk And haier. LG and Samsung are not poorly made, but apparently are horrible for repairs. And very expensive. Get extended for any of these. I would also recommend for GE.
I prefer the "u" in honour as it seems to be missing these days.
Usually there is a maximum (albeit low) number of dead pixels before it won't even make it off the assembly line. Unless the single dead pixel is pretty much in the centre of the screen you won't normally get a replacement. At least in UK, where there are lots of replace / refund avenues open to the consumer mandated by legislation. Even refurbished electronic goods have an automatic warranty.
"Wait. Something's happening. It's opening up! My God, it's full of apricots!"
your saying that it a computer will only last 3-5 years i have a old thinkpad that came with windows 2000 for a few older games, my current laptop is at the 4 year mark and my only complaint is the crappy opengl linux driver which merely means i won't be using it as a a bit coin farm or run high end games, it will probably live for a decade (it will be re purposed in about 3 more years as a media server or some such) parts are easy to find in my experience, just go to newegg and look. hell i have old desktop setting around under the tv that has been continuously upgraded since the mid 90. you estimated lifespan of a computer is equal to the uptime that many people here would not even bat an eyelash at. now for non slashdoters maybe not worth it.
---Saying gnome 3 is better than windows 8 not so much a compliment as it is damning with light praise.
For about 10 years, I rolled over Circuit City extended warranties on a series of portable audio players. Tape players at first, then CD players. It was pretty much guaranteed that the headphone jack would get loose before the 2 year warranty was up and portable CD players would start skipping. I'd bring the device back to CC and get the choice between a replacement or store credit for the original purchase price. I'd take store credit, pick the latest and greatest portable device (which was usually about the same amount I'd paid for the old and busted model) and add $20 for another 2 year warranty.
Doing the math, I paid a little over $2/month for the initial $150 purchase and bi-annual $20 warranty purchases. I'd say it worked well for me at the time. I know people will say "rabble rabble rabble anecdotal rabble rabble rabble" but that doesn't change the outcome for me. I came out way ahead of paying for a new device every two years.
The OP has it wrong. Extended warranties last 3 years, during the lowest chance of failure time, electronic devices will generally die in the first few months (manufacturer warranty) or after 3 years (after extended warranty). Add to this that extended warranties have convoluted terms that attempt to stop people getting warranty repairs.
In Australia, extended warranties are useless due to Australian Consumer Law, which protects consumers by making manufacturers repair goods if they fail before a reasonable time. Essentially, if there's an extended warranty available, the item should last as long a the extended warranty.
I bought a Macbook Air just after a refresh a while back. The vendor I usually buy computer/photo/audio equipment from had a closeout special on the previous model. I know, it goes totally against the Apple mindset, but I bought the old one anyway! The computer was brand new (not a refurb), was one option short of the highest build-to-order configuration, and was $600 off. They threw in AppleCare for free, too. (I wouldn't have bought it for $200.)
Now if something would just go wrong with it! I've been rather fortunate there.
My general opinion on extended warranties/protection plans is that they are really asking, "Would you like to pay $XX.XX more for that?"
When you're dead, you don't know you're dead. It only affects the people around you. Same thing when you're stupid.
Insurance/warranties/etc. are designed to make the companies money who provide them, full stop. They can be beneficial if you can't pay for the repair/replacement cost yourself if something goes wrong, but if you can otherwise afford to repair/replace the unit yourself then by all means, don't pay for insurance/warranties.
The two years just expired. They shipped her a new (maybe refurb?) processor, of a newer model than her old one. It even came with it's own 3 year warranty. So for a couple grand, she basically got 2 years of warranty for her old processor, a newer model processor with 3 years of warranty. Retail cost of newer processor was well over double the cost of the warranty!
Hard to beat that.
Because they base their judgement on the amount paid out versus the amount paid in. And their figures year ago on auto "extended warranties" was ~30% of what people paid in got returned in the form of expenses to repair, 70% went to selling, overhead, administration, etc.
Why does every clerk selling you something try and sell the warranty/insurance? Because all the management get bonuses, the selling company gets something, the insurer gets something, etc. That money isn't returned to the consumer in benefits.
I'm 70, have made it a habit of insuring to the hilt everything I can't afford to pay for (house, auto, liability, umbrella rider, etc). For all products I decline coverage because I can afford (with some pain) to pay for them. I'm way way ahead.
Extended warranties are like a casino, a very few win, some break even and the average loses big. Except casinos pay out at much higher rates...some more than 95%.
Before you buy, do some research on the latest profit and loss statement from the insurer. Oh, and insurers often do go bust only to reform the next day under a new name, same management.
It costs from $500 - $700 to replace a "$200" subsidized phone before your contract is up.
the cost for my complete replacement if anything goes wrong including accidents for 3 years was 30 bucks.
About the price of a good case and screen protection.
And I used it.So for a small breakable thing you carry everywhere you go, yes get on if the price is reasonable.
I know a few people who had accidents to their iPad a year or so after ownership. Also, get your iPad at Bestbuy. Say what you want. but their extended warranty is superior to Apple, their return policy is more liberal, and there are more of them. And I get points, AND I have seen the iPad for 50 bucks off at least once a year. On the down side their hair is combed and none of them are hipsters~
Don't get an extended warranty for washer/dryers/ refrigerators. They are built to last for at least 5 year, and you arne't likely to drop one while carrying it down the street. Of course, if the extended warranty comes with a 'free' maintenance check up every year it might be worth it.
I go won for a computer I ought at compUSA in '96 5 years*, 40 bucks, anything goes wrong. 3 years later the monitor started loosing color, I called them up and the sent me a new equivalent monitor that was better in every way. 6 months later the mother board starting getting flaky. They sent be whole new computer, and a top notch one to boot.
So yes, it was worth it.
*I normally don't buy computers, I build them but it was top of the line and really inexpensive. I told the guy I thought it was marked, but he said that was the price. It was like 150 bucks when other similar boxes (CPU Speed/RAM/HD) where 1000.
Between it and the free replacement, I used it for almost 10 years.
The Kruger Dunning explains most post on
From the excellent "Checkout" - this only aired this week. http://youtu.be/NrxxzsaBkC4
Extended warranties were always bad, until I tried one for a new technology, flat screen monitors. I bought a 17" which failed, and when it failed, Best Retailer had no 17" to replace it with, and replaced it with a 19". When that failed, and I went back, they had to replace it with a 23". Now, if I'd put the money in a piggy bank, the money would have gone farther towards buying a 23" than it did in 2006... so some of this is false economy. But the screens also became more dependable and failed less. I also paid for extended warranty on the "second screen", a flat Sony LCD, in 2007. It still works fine.
Gently reply
In Australia we now have laws that make this decision mostly irrelevant. A product must last for a reasonable amount of time, among other things. Apple are not going to argue that it's reasonable to expect that an iphone wouldn't last at least 3 years so taking out any extra warranty is a waste of money. Ditto for any brand name laptop. For phones, the "reasonable amount of time" thing also has a lower limit of the length of the contract, so if your phone breaks while still under contract the retailer must make it good again. This ends the situation where your phone might break after 15 months and you are stuck paying out the remainder of the 2 year contract.
Most of this was already the case but it's now clearly spelled out and easier to argue the point with ignorant retailers
I think it's starting to make a bit of difference to the products shops are willing to sell, on the basis that if they buy some cheap import and the supplier disappears they are stuck with the warranty, but maybe that's my imagination...
After having two TVs fail in three years at ages of 2.5 years and 5 years (I won't mention the brands but they rhyme with Visio and Sharp I ponied up for the extended warranty on the latest replacement. The way they make consumer electronics these days (low reliability and almost unrepairable), I think the math may be likely to work out in my favor.
In Australia, extended warranties are useless due to Australian Consumer Law, which protects consumers by making manufacturers repair goods if they fail before a reasonable time. Essentially, if there's an extended warranty available, the item should last as long a the extended warranty.
Except that Australian Consumer Law is ridiculously difficult to enforce. I had a Fisher Paykel oven installed 2.5 years ago, and the glass shattered while preheating it just last week. No amount of arguing "Australian Consumer Law" with the manufacturer would get them to fix it under warranty, since their ovens only have a 2-year warranty. The "reasonable lifetime" of an Oven is certainly longer than 30 months.
Did you report them to Fair Trading? I had a defective Nokia replaced when they intervened on my behalf.
Last day of extended warranty from BestBuy on a laptop that the dog got caught in the power cable and pulled off the desk. Beyond them taking almost 2 weeks to fix it there was no issue with getting work done on it. Honestly they would have made more money giving us credit as it was a 5 year old gaming laptop and the equivalent then was $300 more.
John
Well, if you had a partner with 6 more old phones, you could do the "phone passing" pattern!
.
The ancient Egyptians show here are using mystical orbs (which were used as telephones back in the day as telephone substitutes,ok, i kid) for juggling. No, really, ancient egyptians juggled: http://en.wikipedia.org/wiki/Juggling#Ancient_to_20th_century according to an inscription at an egyptian cemetery.
Then lodge a complaint with the ACCC, you may be surprised at the response. (Also helps to send a copy of the complaint to the manufacturer)
You may also get more joy dealing with your reseller as well - as the sales contract is with them, and they should be the ones making it right, and then it will be up to them to claim back from the manufacturer.
http://www.consumerlaw.gov.au/content/the_acl/downloads/consumer_guarantees_guide.pdf has more information and is a very easy to read guide
http://www.consumerlaw.gov.au/content/Content.aspx?doc=consumers_ACL.htm has contact information and advice on where to file a complaint
I've found printing out the guide and taking the relevant section in with you when you visit a retailer has worked every time. It got my fridge fixed out of warranty, and my PS3 replaced when the DVD drive died about 2 weeks after the warranty expired.
In general, warranties (and insurance), are intended to make the supplier money. You are trading equity for lower variance. You can pay X now for and pay X again in the 10% chance it breaks. Which means that 90% of the time you pay X, 10% of the time you pay 2*X, which is statistically 1.1*X. Or you get the extended warranty and pay 1.2*X, 100% of the time. i.e. no variance.
But there is one exception to this: things for which it's easy to forget you have a warranty. There's a lot of people who buy an extended warranty, and then 2.5 years later their device breaks and they don't even remember they had it. Much like rebates, not everyone goes through the process even though it's "free" money. People are lazy, or forgetful. In this case, the warranties may actually be a good deal, because they can price it based on the assumption that only 30% of consumers will use it, even though they'd lose money if 100% of consumers did. In these situations, as long as you don't forget your have, it can actually be profitable for you. Essentially, the company is sharing the profits of the forgetful with you.
Whenever I am offered an extended warranty for something, I just note what the warranty costs and deposit that much in an account I have for "replacing stuff that breaks."
I started that back in 1994 when I bought a TV at best buy. I've had to use it a couple of times in nearly 20 years, and otherwise I am waaaaaaaaaaay ahead. It's a nice savings plan heh.
"Is Buying an Extended Warranty Ever a Good Idea?"
It certainly is, if you're using the 'smash it with a hammer after two years and get a new one' upgrade strategy.
I absolutely would not own an iPhone if it were not for having a warranty. And I love Square Trade for warranties. They're affordable and most of the time cover accidents as well as manufacturing defects. They've saved my bacon with my previous phone, my most recent laptop, and a couple of monitors, all of which were either accident (my laptop) or I simply didn't have the money for replacement when they broke.
The insurance company wouldn't make money if they didn't already know the odds were stacked in their favor. Learn to save money on your own for accidents. Don't buy things that you can't afford to maintain.
Simple logical proposal:
Insurance is a profit center with administrative costs. The insured, on average, lose.
Now, if you are an above average risk and you can weasel your way into a pool of lower risk insured, then you personally could stand to win. Above average risk includes those who abuse their equipment and then lie about having done so, etc.
If you're not one of those people, consider the fact that you're buying into an insurance pool with people like that in it - potentially a lot of them.
I had a similar experience with a BestBuy warranty on an over the range Microwave. My thermal receipt faded and they could not verify my purchase price (I had my credit card statement but they would not allow that as proof). They offered me the lowest price that microwave ever sold for which was $120 and $400 less then I paid and that price was even $30 less then what I paid for the extended warranty. It took me 2 hours in the store leaning against my microwave sitting in a cart waiting for a resolution because the manager was purposely ignoring me. He waited on over 15 different customers one by one all that got there long after I did to avoid addressing my issue. Every time telling me, sir, I told you I will get back to you. You will have to wait. Finally he got back to me when there was no longer a single customer in the customer service area. The resolution was they had one more of my model in stock and offered to swap. The icing on the cake is when they tried to get me to buy another extended warranty for the replacement even though my original warranty was for 4 years and still had 22 months left. He said their warranty only covers a single replacement and it is void after that.
Most extended warranties these days take depreciation into account.
My sister opened a computer store in Hawaii. She sells C shells by the seashore.
Our experience is that business equipment is used much more heavily than house electronics yet the warranty costs are the same. So the answer is yes for business electronics.
In fact for certain equipment with generous warranties we are pretty sure the manufacturer loses money on us, but subsidizes it from home users who (misguidedly) purchase a warranty.
I bought a SquareTrade plan for about $20 for a $250 smartpen in 2009 on the reasoning that a pen is a fairly fragile device that goes through a lot of abuse.
About four months later, the pen's display broke. SquareTrade asked me to verify the serial number, then gave me $250 as a payout, no questions asked, which I used to buy the pen's replacement.
After that, I've covered my phones, since the coverage is relatively cheap in comparison to the cost of a retail smartphone, and a smartphone also goes through a lot of abuse. I wouldn't bother for a laptop or computer, or for something very inexpensive, but for a very expensive device that is not easily user-serviceable (I have had occasion to change the screen and battery on an iPhone for a friend, and I would not like to do it again), I'm happy to have the coverage given my good past experience and the fact that they offer coverage that covers even your own boneheaded moves (dropped in water, cracked when sat on, etc.)
STOP . AMERICA . NOW
I've got an older Android phone. It's been dropped, kicked, etc. Screen is still fully intact with no scratches and the phone works just fine. No reason to buy extended warranties on it.
It's funny - several years ago when I bought two new laptops I got the standard warranty on mine, and the 2 year on the other. Within six months the motherboard on the second died and they had to warranty replace it.
A lot of the failure in modern electronics is related to el crapo capacitors. For example, I got a refurbed HD set. Year and a half later set won't power on. Power supply - replaced it and all works well again.
It really depends on the company and the product in question. It'd be pointless to buy an extended warranty on a $130 printer at Staples, but it'd be a very good idea to get the AppleCare for most Apple products, since they are extremely good about dealing with problems (my laptop developed a severe series of blemishes where the coating on the unibody just completely wore away after the initial coverage, but within the Apple Care coverage -- I sent them photos and had me stop in at the nearest Apple Store for a brand new replacement with absolutely no hassle).
I'd also get an extended warranty for an expensive television. Maybe not the warranty the store is trying to sell you, but you can do your research and find various extended warranty companies (I've found SquareTrade to be fine enough). If you spend $4,000 on a real project display and you can get a three year extended warranty for $200 which includes a free bulb replacement (easily $130+), then that's a pretty good deal.
Most recently, I bought a $400 XBox 360 that developed an issue with reading discs about 80% of the time and made a concerning grinding noise as it spun the disc, trying to read them. Because Microsoft's warranties are so stupidly fucking short, I had to rely on my SquareTrade warranty (which I think was $30 or so?). I filed a claim online, they sent me a customized box and packing materials just for the console and I had it shipped, fixed, and returned to my home in about ten days. That was well fucking worth the $30.
I would generally say "extended warranties are a scam", but as with many things, there are exceptions and you have to know when and where those are. A good rule of thumb is probably to just never buy the extended warranty they're pushing on you at the showroom for *anything*. Period. That's just an upsell to pad their pockets and nothing more. Probably also don't bother getting a warranty on fairly cheap things - the exception being something like an XBox 360 which is not *almost* cheap, but also known to have serious failure rates. I saw it as an investment with an absolute eventual return - and it paid off.
If you own something with those, any extended warranty is worth it :(
Consumer Reports bases their opinions on values that don't necessarily align with yours. For example, they regard pet health insurance as being a bad deal. If you're somebody who'll euthanize a pet at the first hint of an expensive medical condition, they're probably right. If you'd give one of your own kidneys to your cat or dog to save his life if the vet told you it was his only hope for survival, they're absolutely wrong. Most people fall somewhere in between. If you pay $50/month for 10 years, and your pet dies from some accident without warning, the insurance company wins. If your 2 year old cat or dog gets cancer, the insurance company loses. If your 15 year old cat or dog develops some chronic illness that can be kept in check for years with aggressive care at the first hint of a flare-up (pancreatitis, asthma, HCM, etc), the insurance company loses *spectacularly* after briefly thinking it won... especially if he or she lives long enough to get cancer. The insurance companies partly keep their losses in check with somewhat high per-incident deductibles. If your kitty is running up $500-900/month medical bills month after month, even 20% deductibles are going to get really painful and weed out all but the most dedicated pet parents.
Ditto, for things like mobile phone insurance. If you're someone who buys dumbphones, or phones that are free/1-cent and would cost $200 or less if you bought them at full price, it's a bad deal. If you just bought a brand new Galaxy S4 with unsubsidized replacement cost of $600 or more & MINIMUM $200-300 charge for a cracked screen repair, you'd have to be positively insane to *not* buy the insurance. The key is knowing when it makes sense to discontinue it. Buy the insurance for the first 12-14 months, then drop it once the cost of buying a used replacement on eBay is less than double the deductible, and you'll come out ahead. Keep paying monthly premiums on a 2-3 year old phone, or spend more on the deductible than a used replacement on eBay would cost, and the insurance company wins. The main way phone insurance companies come out ahead is by customers continuing their policies LONG after the phone has ceased to be expensive enough to justify it. If you were required to insure the phone for 2 full years, phone insurance might be a bad deal. But since you can drop it at any time as of your next bill, it makes sense to get it with almost any new expensive phone & keep it for at least a few months.
Extended warranties are a tough call. 10+ years ago, stuff that didn't die within the first 3 months probably wouldn't spontaneously break on its own during years 3-5 anyway. Now, it's a total crapshoot. The $900 LCD TV you just bought might have a replacement cost of $600 in 3 years, but chances are that its warranty is only good for 1 year... and if the TV breaks out of warranty, you're probably fucked since modern LCD TVs are practically large-scale integrated circuits with almost nothing inside that can be cost-effectively repaired by an independent repairman. And unlike 10+ years ago, things like LCD TVs really DO spontaneously drop dead after 2-4 years for no obvious reason.
For cars, extended warranties are an equal crapshoot. If you keep the car long enough for the warranty to kick in and matter, it's basically a prepaid service plan that you'll probably break even on & avoid getting hit with a $1,000+ repair bill out of the blue long after the original warranty expired... as long as you don't get into a wreck before that point, and have the car totaled. The "car totaled after paying premiums for months or years, but before any expensive repairs" is really how they come out ahead, because almost ANY car that's more than 5 years old is eventually going to need a repair that's expensive enough to break even or come out ahead with the insurance. At the end of the day, enough cars get totaled for the insurance company to come out ahead, even after they've paid to replace the AC compressors, power steering pumps, alternators, and half the automatic trans
Some extended warranties are money down the drain and some not.
Had one on my father's iPad which turned out to be useless. The front screen just fell apart one day (I was there) and made a huge abyss not from any impact (it has a protective casing) but just some type of internal stress. Apple absolutely refused to cover it, even though it's apparent it's not from an impact. Some people are aware that tempered glass products can just absolutely implode one day but manufacturing defects or just stresses - I had a glass sink once explode in my bathroom in the night sounding like a grenade exploded in the distance - except Apple employees. They offered a fix 4x the cost on ifixit. So for iPads/iPhones, Applecare never again, total ripoff. OTOH, I know certain models of Apple notebooks where the logic boards (motherboards) fail quite frequently and it costs half the computer new to replace, at least. (Though I just use a PC notebook, but less worrisome).
I also laughed at people who got extended warranties on early flatscreen thin LCDs (they were still square) since it turned out replacing them with something better years down the road was only marginally more expensive than the extended warranty.
I've read and been told several times to avoid extended warranties and insurance, but I personally have found that they generally pay for themselves on big-ticket items like laptops and smart phones. For those that are accident prone or unlucky with electronics, like me, they are a lifesaver. I replace my laptop every 2-3 years. Parts start to fail after about 1.5 years, but base warranties expire after one year. Purchasing the extended warranty allows me to budget my laptop purchases more carefully and save up for less frequent laptop purchases that are an improvement over my previous laptop, rather than paying to replace my current laptop more frequently. The same goes with cell phone insurance. I carry it around with me everywhere I go and sometimes s**t happens. Extended warranties and accident insurance are two insurance products where the companies don't have the luxury of evaluating the risk of individual policies, but instead issue everybody the same price at point of sale. The prices are set in such a way that most people are basically overpaying by enough not only to make the company a healthy profit but also to offset costs incurred by people like myself.
I bought the extended warranties in three circumstances:
In the '90's and into part of the '00's, my experience with laptops was that every one of them across multiple brands and users failed in some way before an extended warranty's period ended. And that included a startup that grew to as many as 80 people. Yes, the more abusive users had more problems, but even the gentle users did too. And IIRC, even CR recommended them then in this particular case. I had all manner of parts replaced under the warranty during that period, and it paid off. That said, this has become much less true in the last 8 years or so; I don't believe they pay any longer. This was never true for desktops, which have had readily available replacement parts for cheap (so I didn't cover those).
I bought a TV for my ailing mother, wanted a turnkey experience for her if the TV failed, and I wasn't close enough to be able to deal with it if the unit died. The TV didn't fail, but I received the peace of mind I purchased.
The third case was a little different: a home warranty when purchasing a house. It was pretty clear on inspection whether some of the appliances were close to their EOL. And the bonus is that through negotiation, one can often get the seller to pay part or all of the premium. Made money on that one too.
I haven't bought extended warranties on anything else, and it's paid off.
Oh, one special case: I skipped the extended warranty on tires for my car one time, and discovered (very soon after purchase, fortunately) that the installer had drastically over-inflated the tires, which would have, of course, caused accelerated and non-uniform wear. I suspected such nonsense and checked before I'd driven very far, and reduced the pressure to spec. "Coincidence? Perhaps! You be the judge!"
I was able to retrieve it, but it was broken. Instead of buying a new one, I fixed it. Myself.
Then, it wasn't broken too badly, as prisms, shutters, and the sensor aren't going to be fixed by anybody who doesn't do it for a living and have replacement parts available. In fact, if any of the crucial parts concerned with movement or alignment were damaged, the camera is effectively totaled, as the replacement parts are often as much as a new camera.
I have repaired SLR lenses with essentially minor issues on generic parts (like broken springs), but anything complicated requires OEM parts or equivalent, and that means it's likely a trip to the repar shop is cheaper than doing it yourself, because they have access to the parts at much cheaper prices.
I've said it for decades now. Each and every single piece of insurance or warranty or extended warranty is always worth having. Each one makes sense and each one is beneficial. However, all of them is a dumb move, for everybody.
Look at your entire year. Look at every insurance you have, and every warranty you purchase, and every extended warranty you purchase. There's a great chance that you're spending over $10'000 per year on such things as a household. Think about mortgage insurance, life insurance, disability, health, car, washing machines, computers, televisions, carpets, couch stains, kitchen appliances, toilets, furnaces. Travel insurance. Dental.
Yes if your furnace breaks, you'd rather have the insurance cover it rather than spend what could be $3'000 to repair the furnace. Absolutely. But you've spent $10'000 that year on insurance and warranties. $3'000 is smaller.
Yes, everything can go wrong every time. But do they? Are you really worried that you'll have $10'000 worth of damage each year every year? That's a pretty sucky year! Think about it. My tvision broke, I needed medicine for a month, I couldn't pay my mortgage one month, my dryer broke, my furnace broke, my air conditioner broke, my fridge broke, my computer died, and my toilet cracked. I had two car crashes. My third car was stolen; my watch too. Oh yeah, and I died.
Hey, you can insure every second of your life, and never have any financial risk for anything. But really, I don't think that was ever the plan.
I don't understand why people don't see how simple this is The extended warranty companies are making a profit. Therefore, on average, they will make more money than they pay out to you. Therefore, if you can cover the capitol cost of the device breaking, you will, on average, come out up by not having an extended warranty.
If the seller believes in his product, or if he's forced by law (like in many countries in Europe) they would offer the warranty as a standard. Did you know that in some countries Europe if a car wears significantly faster than should be expected, they have to replace parts and pay labor completely for the entire economic life of the car? That's 10 years and 200000 KMs for a family gasoline car. Warranty against manufacturing defects on consumer electronics is a mandatory 2 years. These laws have resulted in better quality products and manufacturers having to replace a lot of "bad designs" and improve on them. Government regulation isn't always bad. The only negative is that there are no real class action lawsuits possible in Europe, so it often takes a consumer organization to make a manufacturer proactively recall/replace faulty products. Government regulation isn't always bad.
I was promised a flying car. Where is my flying car?
The problem with these "reasonable lifetime" laws (we have them in the Netherlands too; same issues) is getting an agreement on what is reasonable.
Manufacturers will state the reasonable lifetime is just about the same as the waranty period.
Courts will typically add on some years, but you have to go to court in order to get the manufacturer to acknowledge that, which in most cases costs a lot more money than the value of the product.
As a result, the only way to enforce these laws is either using class action suits (unlikely unless a particular failure is universal for all customers) or the repair is costly enough to justify spending money on lawyers.
Some consumer rights organisations may have some more leverage, but only in individual cases so no structural changes in the way this is handled.
Slashdot social media options: AIM, ICQ, Yahoo, Jabber and Mobile Text. Why no MySpace?
Exactly, instead of buying the extended warranties i was offered with my various products i took a note of their costs and added them all up... Then if i need to make a repair or replacement during what would have been the extended warranty period i deduct the amount from the amount saved by not having extended warranties.
So far i'm well ahead, aside from a hard drive in a laptop nothing has failed outside of the included warranty period, and the hard drive failure just caused me to buy a much larger, much cheaper drive than what was originally installed.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
Insurance has a cost. The insurance companies are not charities funded by wealthy benefactors. Only pay the cost if you need the service, i.e. if the item you bought is so valuable that you cannot handle the loss.
For most people, that means insuring against the loss or damage to house/apartment and car plus fire/theft coverage for belongings. Raise the voluntary excess as high as you can afford, but make sure that you can still handle multiple things going wrong at once.
Insuring a phone? If you need it for work and you cannot afford to replace it then go ahead, but hopefully few people are in that situation. It is expensive to be poor.
There is another case where it makes sense to take out insurance: If you think the insurance company got the odds wrong. Insurance companies are very good at avoiding that problem. You can obviously also "influence" the odds a bit, but there is no insurance against jail terms...
Finally! A year of moderation! Ready for 2019?
Except that Australian Consumer Law is ridiculously difficult to enforce. I had a Fisher Paykel oven installed 2.5 years ago, and the glass shattered while preheating it just last week. No amount of arguing "Australian Consumer Law" with the manufacturer would get them to fix it under warranty, since their ovens only have a 2-year warranty. The "reasonable lifetime" of an Oven is certainly longer than 30 months.
It's not at all difficult to enforce - although that may depend on which state or territory you're in. You certainly never deal with the manufacturer though - the responsibility lies with the vendor and it's them you pursue. Ignore the warranty, it's not worth the paper it's written on. It's the law that protects you - and that's between you and the vendor. Anything they sell you must be of merchantable quality and fit for use. If it breaks unreasonably quickly, it clearly wasn't of merchantable quality.
In NSW you take them to the Consumer, Trader, and Tenancy Tribunal (CTTT). In Queensland, it's the Queensland Civil and Administrative Tribunal (QCAT). In Vic, i believe (although i've got no experience there), it's VCAT. In the NT, it's much more half-arsed (as is everything else there!) The law is uniform in all states and territories now and they should all have some sort of tribunal. But the vendor probably won't let it get that far because going to the tribunal is going to cost them heaps of money even if they win (which they probably won't) - and it will be cheaper just to give you what you want. Go to your nearest community legal centre for advice on putting together a tribunal case.
Anything they sell you must be of merchantable quality and fit for use.
Sorry, that should read "fit for purpose", not "fit for use".
A warranty is insurance against the replacement cost of a product. Every consumer product has a lifespan, either the time it will take before it fails, or the time it will take until it's no longer of any value to you. You probably won't be using the same computer 10 years from now. Your fridge will probably last 15. Other household appliances, maybe 15-20 years. At some point they're going to break or become obsolete. Researching the products you purchase, either the specific product or the quality control history of the company that produced it should give you an indication of how long the product will last before it needs repairs or replacement, and how much it's going to cost over its lifetime to maintain.
Now, how much does that warranty cost? Chances are good it's going to cost somewhere around 20% of the purchase price of the product. This is only a good deal if the product is EXPECTED to break within the next 5 years. Note that it won't protect against obsolescence, only replacement/repair of the original product. Of course, the next question is, why would you WANT to purchase a product that is expected to fail in less than 5 years? Therefore, if the product doesn't need the warranty, you shouldn't buy the warranty. If it DOES need the warranty, you shouldn't buy the product.
So what happens if that new TV dies 2 years in. You're out the money, right? Well, yes, there is a statistical chance that some consumer products are going to fail before their average expected lifespan. It happens. However, it's a low chance, and if you purchase 20 different products of relatively equal value, 1 of them might die before their time. So purchase 20 gadgets worth $500 each one of which breaks halfway through its lifespan, then out of $10000 worth of purchases, you lose $250. Extended warranties on all of those products would have cost you $2000, and the warranty period is still unlikely to cover the whole expected lifespan of the product. You could just as easily purchase your own "extended warranty" by putting 10% of the value of the product into savings at the time of purchase, and over the lifetime of all of your products you can expect to use maybe half of it.
Warranties start to make sense (maybe) when you're purchasing a single large purchase, with large repair expenses and pseudo warranty savings with other consumer products won't be sufficient to make up for it. Something like a car or purchase of similar magnitude. Again, if you purchase 20 cars at a time (probably only if you're a business), warranties probably no longer make sense as repair costs over ALL of the vehicles is likely to be less than the price of all of the extended warranties.
So, in summary, for something really expensive, yes. For anything reasonably less, no.
-Restil
Play with my webcams and lights here
Yeah my experience with Futureshops warranty coverage sucked and our camera was actually replaced/reapaired twice without too much complaint. The second time is why I'd never recomend extended warranty coverage. It refused to turn on one day and it would have been outside the manufacturer's warranty. We took it into future shop and they agreed to send it out for repair, it was all handled without too much difficulty. However it was more than 3 bloody months later before we saw our camera again.
Is the failed device something you actually use? Do you want to go/ can you live without it for 3 months?
Save the cost of the extended warranty and just buy a better/newer replacement for immediate use on the extremely rare occasions where the warranties might actuallly be used.
I didn't purchase the warranty above myself and in fact I've only ever bought one which I was delighted with (even if I never use it). From a repair/refurbishment center for Sony they offered a 5 year extended warranty on my PS3, the $50 extended warranty also included 3 brand new games (from a choice of around 50, I took Drake3 and GoW3 plus something else) and a second brand new controller.
Most extended warranties suck and are just a very nice extra profit for the store, the only time I've ever personally seen one used the experience was so slow I would much rather not have had the warranty at all, I felt obliged to make use of it when it would have been better to just replace the device.
If you're buying Apple hardware, from my experience over 22 years, it's a good idea. -Every- Apple product I bought had one or more -hardware- fails within two years - usually *after* the warranty expired. And Apple's willingness to "overlook" the identical disasters of hundreds of customers is boundless.
"You must try to forget all you have learned. You must begin to dream." -- Sherwood Anderson
"Consumer Reports calls extended warranties 'money down the drain,' and as a tech journalist and owner of myriad gadgets — none of which have ever conked out or cracked up during the original warranty period — that was always my attitude too."
Looks like Consumer Reports and this supposed 'tech journalist' (aka shill) have lost it. Hey guys, ever hear of Hewlett Packard? No? How about Dell? No?
Or maybe you have, but you got a non-consumer version of something they paid your ass to shill.
Speaking as a former repair tech, those extended warranties are a GOOD thing for you, because half the time, you aren't going to get your warranty honored in the first place unless you've paid for it, even if your failed device is still within the original 1 year warranty period. Apple, HP, Dell, and many others are very guilty of this. This is how they get stupid people to keep spending more money, by making the product crappy and by not honoring their legal obligations, in the hopes that the consumer is too stupid and too broke to try finding a lawyer or filing suit.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
I'm not going to weigh in on the wisdom of buying a warranty, as a former car salesman I just want to point out a few things:
...even on a 1 year old car (I pay cash of course). Been doing that since 1968, and I'm WAAAY ahead.
If you can afford a gadget, no use buying a warranty. It's not going to prevent something dying.
That's why he said for non-catastrophic things. You probably still want to insure your house and maybe your car because suddenly losing those things could cause some hardship. But if my $500 digital camera or $300 TV breaks, it may suck but it's not catastrophic.
I fixed one fan in the machine myself after it went off warranty. It destroyed batteries and external power supplies too, albeit slower. I therefore believe the power system caused the problems. Apple replace many parts but never the internal power supply, probably cost them over $500 plus labor by not fixing it. I donno if they could realistically diagnose the power supply issue though, assuming it had one.
In Apple's defense, I travel lots and commonly got the machine repaired by Apple certified retailers, not Apple themselves. It's entirely possible they occasionally missed warning signs for power system issues that Apple's own diagnostic systems might pick up.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
The OP has it wrong. Extended warranties last 3 years, during the lowest chance of failure time, electronic devices will generally die in the first few months (manufacturer warranty) or after 3 years (after extended warranty). Add to this that extended warranties have convoluted terms that attempt to stop people getting warranty repairs.
In Australia, extended warranties are useless due to Australian Consumer Law, which protects consumers by making manufacturers repair goods if they fail before a reasonable time. Essentially, if there's an extended warranty available, the item should last as long a the extended warranty.
===
I tend to buy extended warranties for items that have historically failed within three years. In that category are laptops, backup hard-disks and any electromechanical items.
For statically located items(washer, dryer, oven, desktop computer, monitor), which is installed and rarely ever relocated, I go with the vendor's guarantee. I will, for a washer, consider the extended warranty if the store agrees to guaranteed service within 48 hours. (we are 10 at home, we do two full washing machine loads per day). The desktop computers are on 18 hrs per day. So, all things are considered, based on consumer reports reliabilities of the items we purchase.
Leslie Satenstein Montreal Quebec Canada
There's also the way that Squaretrade's term starts with purchase, where one would reasonably expect it to start after the manufacturer's warranty ends. This is IMHO deceptive.
It Depends. Almost every Extended Warranty I've purchased has paid off in spades to the tune of several thousand dollars, but I'm very choosy about when I purchase these extended warranties. sortius_nod is only partially correct. There are two time a product is likely to fail. Early on, often called infant mortality, which is usually covered by regular warranties and as he/she says, later on in life, but some products have a much higher likely hood of failing. Newly released high technology and reconditioned devices, both mechanical and electronic as well as "open box" items. Also more and more original warranties are covering less an less, often under very specific conditions. Really check out the exceptions clause in every warranty. For the first few years I found the ROHS compliant devices to be very troublesome with a number of solder joints failing in TVs and Motherboards. I still do not trust ROHS solder and repair with real 60/40 solder of which I have a lifetime supply. In most cases a couple of pounds will last for many years. Returned tools or yard equipment may have an extraordinary discount and appear to have never been used. I purchased extra coverage on a large trailer type yard vac. This thing was big! It appeared to be unused. They said it was returned because was too big for the guy's yard. I checked the oil which was "full to the line" and clean. I did half the yard and had to add oil. The engine seized the next time I used it. The overnight soak with WD40 loosened it up, but the engine was shot. They sent a mechanic out to check and he replaced the entire engine. I had a large "walk behind rototiller" for several years, Hooked a rogue tree root which demolished the transmission, tore up the blades, and bent the crank. Again they came out and replaced just about everything except the frame and tires. We purchased a new 40" HDTV some years back. they had just been released and we had to wait for them to come in. (40" is now about a 1/4 the price). The original warranty ran out and so did the audio. Service man came out and resoldered a ROHS joint and remarked that doing so had become a major portion of his business. Yes, the one service call was more than the extended contract, but unlike the yard equipment it didn't run into thousands of dollars. I agree they are seldom worth the money and some are filled with more loop holes than a politicians promises, but we are seeing an influx of electronics and other goods with substandard workmanship and not just from China. With the current state of the economy QA seems to be suffering at home and abroad. Companies are not only not hiring, but streamlining operations and cutting out steps they think will still keep their failure rates within acceptable limits (what the customer will put up with and still buy the product). Another thing to consider is, what would the most expensive failure be? Is it cheaper to repair than the cost of the extended warranty? Does the regular warranty cover all failures, or just in limited cases. Is it worth the cost? When it came time to renew the one on the TV I figured if it failed again I'd be farther ahead to just get a new one far cheaper and more advanced than the original. Still, many extended warranties look good on the surface, but are near worthless in the real world. I use them, but only in very limited instances. I hope the reduction in quality I've been seeing does not make them much more worthwhile.
Must be Monday.