12-01-2006, 08:00 PM
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Magi
Join Date: Feb 2002
Posts: 2,386
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Consumer Reports: Why You Don't Need an Extended Warranty
"This holiday season, shoppers are expected to spend a whopping $1.6 billion on extended warranties for laptops, flat-screen TVs, other electronics, and appliances. And almost all of it will be money down the drain. Retailers are pushing hard to get you to buy extended warranties, or service plans, because they're cash cows. Stores keep 50 percent or more of what they charge for warranties. That's more than they can make selling actual products."
Consumer Reports lists a couple of exceptions to this "avoid-extended-warranties" rule: rear-projection microdisplay TVs and Apple computers (read the article for their rationale). I honestly can't recall the last time I invested in an extended warranty. I do recall certain store warranties allowed you to trade up to a later model if your device broke down and the store no longer stocked your model. That doesn't sound like such a bad deal. Or is it? Give us your thoughts. Are there situations where you feel extended warranties are... uh... warranted?
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12-01-2006, 08:10 PM
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Executive Editor, Android Thoughts
Join Date: Aug 2006
Posts: 3,233
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I find myself always comparing the price of the warrenty to the price of the item. If the warrenty is only around 10% - 15% of the purchase price, than it's usually a good deal. 25 - 35% (and higher) is a real rip given depreciation over time. On a $600 computer, a $150 extended warrenty makes no sense - think about it. You're likely to get around a year of good use out of the system on the regular warrenty. By this time, the price of that computer is more likely to be around $400 at the most. Assuming the most expensive thing breaks in the system, you're looking at a repair that costs, maybe, $100 at the most (probably much less). So either pay $150 now or $100 IF the computer actually breaks. I'd rather take my chances!
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Dr. Jon Westfall, MCSE, MS-MVP
Executive Editor - Android Thoughts
News Editor - Windows Phone Thoughts
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12-01-2006, 08:22 PM
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5000+ Posts? I Should OWN This Site!
Join Date: Jun 2007
Posts: 5,067
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I disagree with the article, as far as non-quality (read: non-non-R-series-Thinkpads, non-Proteges etc.) notebooks are concerned. With a, say, HP notebook (they have a very high failure rate), it's, in my practice, essential to get an extended warranty. Non-R-series Thinkpads (particularly the X and the T series), on the other hand, are a completely different animals - they break down really rarely (and they have 3-year-warranty at the first place). That is, purchasing an extended warranty for a cheap laptop is a must. In my opinion.
As far as PDA's are concerned, I've had (and still have) dozens of them. I've never bought an extended plan and I would never have needed one either. It's only the side rubbers of the 2210 and the absolutely bad internal vs external speaker switcher of the HTC Wizard that has caused me any (slight and severe, respectively) problems. Fortunately, the latter has come out after some months of purchasing the Wizard - that is, while still in the default two-year (in the EU, the warranty is, in general, 2 years) warranty period. That is, I wouldn't purchase an extended warranty for a PDA, specially if I already have a two-year one by default. In this, I agree with the article - no ext. warranty needed for PDA's.
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12-01-2006, 08:39 PM
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Sage
Join Date: Aug 2006
Posts: 601
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Based on my experience extended warranties on laptops are a good idea. My Apple and my HP extended warranties ended up being worth far more than their original cost.
If one considers all the factors (cost of replacement/repair, cost of warranty, length/coverage of standard warranty etc) you can usually arrive the right answer. But you need to be informed. Stores, especially in recent months, will tell you nearly anything to scare you into buying an extended warranty.
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CTSLICK - ROCK ON
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12-01-2006, 09:00 PM
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Intellectual
Join Date: Aug 2007
Posts: 238
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I found the APP worth it for my iPod; one year and 2 days, the hard drive dies, click, click, click...took it to the Apple Store yesterday, 2 hours later, out the door with a new iPod. I think they break down like old Timex watches, once it hits that 1 year date, poof.
As for most anything else, I don't find them worth it, they either depreciate too quickly, or parts are cheaper to replace outright.
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12-01-2006, 09:25 PM
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Thinker
Join Date: Oct 2005
Posts: 351
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i bought my ppc from a big box store.... the item was on sale for $299.99
i insisted they give me an extended warranty with the included price....thank god they did... (would have bought the item anyways, without warranty) already used the warranty to get the screen/guts changed and also battery changed for free. 3 year warranty was added at $49.99, but the price of the unit was dropped to $250. i would reccemend people bargain on the extended warranty. they like to sell it, does not really mean u should have to pay for it. On paper for them it looks like they made $49.99 all profit...but they dont even care about making money on the item it self.
it all really depends on what u buy and how long u plan to use it. remember even if u dont have warranty, things can be fixed/repaired.
on average a good name brand item has a shelf life of 2-5 years. so for most items the extended warranty has to be decided that are u ready to pay for the first repair in advance to fix it. U are paying for a service, but in a insurance style.
e.g. u buy car insurance... u get it an accident, the company pays for the repairs.
only difference is that u have a choice to buy this insurance. car insurance is compulsory.
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12-01-2006, 11:01 PM
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Pontificator
Join Date: Dec 2005
Posts: 1,183
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I've long followed the advice that if it's a mature product - CRT tv, washing machine, video recorder - there's no need for the extended warranty. By the time the product is likely to break, you could buy a newer, better one more cheaply than reparing the old one.
Cutting edge devices, on the other hand, should inspire consideration for the extended warranty, but consider how you use them.
I use my laptop for 8 to 16 hours daily. I buy a high-end machine and I need it to be working fine so I can earn a living. So I purchase the best next-day on-site warranty I can afford (usually 3 years because I know the useful lifespan is around that).
For a phone - which is usually cutting edge too - I don't care. Sure I use it daily, but I'm not going to lose money or productivity if it breaks, as I have email and other communications that I use more than the phone. If it breaks I'll buy a newer better one off eBay. Same for PDA.
So it depends on the device and the amount and type of use I put it to.
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12-02-2006, 12:51 AM
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Pontificator
Join Date: Aug 2006
Posts: 1,202
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I generally avoid these, but there are instances that I diverge from the usual plan. Big ticket items that are prone to break and expensive to repair, such as the 65" rear projection TV I bought 4 years ago. It was close to $3000.00 then and the 3 year extended warranty was only $300. I didn't hesitate, but only used the included annual adjustment and haven't had to use it.
Almost without fail for laptops. I have gone through 4 hard drives on various Dell laptops over the last 3 years. I think they have a design flaw with the HD right under the wrist rest below the keyboard. The plastic case is not strong enough to protect the drive IMO.
However, for almost everything else, no way. I get a kick out of Best Buy..."Would you like to spend $10.00 on an extended warranty for that $29.99 joystick? Come on.... I'm not going to spend 1/3rd the price of a non-necessary item just to be able to replace in the unlikely event it breaks within 2 years.
CompUSA and Best Buy used to be really good about providing upgraded devices if your PDA died while under extended warranty, or even if it just needed repair. However, they obviously were both burned by this policy and now they typically send the device to a repair depot. You're out the device for a couple of weeks while they fix it. Not worth spending the $$ on the warranty IMO. Oh, and they don't really carry a large selections of PDA's anymore anyway.
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12-02-2006, 05:05 PM
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Sage
Join Date: Aug 2006
Posts: 779
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In the past, I've had extremely good luck with PPC warranties from Best Buy and CompUSA. None of my PPCs have completely died, but towards the end of the warranty period they all developed at least some problems (and that's without cheating or causing the problems myself) to enable me to get a free trade-up.
When I bought my current PPC (iPAQ 4700) from CompUSA they had changed the warranty from bring-in to send-in. It's less convenient, and I think you might get back a refurbished unit, rather than being able to choose a new one, although I'm not sure about that. My 4700 still works, but I can no longer use my spare battery because removing the battery now causes a hard reset. I could have sent it in for warranty replacement before my two years was up, but I thought a refurbished one might have problems, and there is no new model that has all the same features.
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12-02-2006, 05:32 PM
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Pupil
Join Date: Sep 2006
Posts: 24
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Laptops - usually. Although by the time the 1 year warranty is gone technology has progressed where I want a newer one anyway. Although AppleCare has added benefits and seems worth the deal if you want to keep the unit through the 3 year period.
PDAs - as long as they cover things like cracked screens... since you never know when a fall will do them in.
ipods - oh yes.
Big ticket things like stoves and such... not for me.
However a friend got a huge bonus for having kept up her parents Sears warranty on a pretty basic stove that ended up needing repair. Since the warranty replacement cost was based on the fact the original was 20 some odd years old she got a replacement cost allowance based on the adjusted for inflation price _and_ extra because the warranty was treated as an insurance policy and had reached maturity and was so old. Over $ 1,000 USD to spend on the new stove. She now has a _very_ nice stove - with an extended warranty. :wink:
The funny Best Buy experience I had - they were clearing out Proctor Silex microwaves for $24.99 USD. As she rings it up the cashier asks me if I'd like the extended warranty. I was going to say no, but instead I laughed and said that I guess I should... and started to walk away. She asked me where I was going. I mentioned the fact that at $25 I could get a second one for the same price and just uncrate it when the first one went bad.
 She didn't think it was that funny.
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