Earth to consumers: extended warranties are a bad deal
By Darren Murph 
posted November 15th 2006 4:46PM
posted November 15th 2006 4:46PM
It's no secret that you and your loved ones will probably drop some serious coin this holiday season (Black Friday in particular, we're sure), and while future repair costs may cross your mind, Consumer Reports recommends that you brush off that extended warranty those big box retailers will be shoving in your cart. Stores like Best Buy typically don't garner massive profits from just selling the snazzy new LCD or LCoS televisions, but "around 50 percent" of the extended warranty's pricetag goes straight to their pocket, and rarely do consumers need the coverage until after it's up. Studies have shown that most major breakdowns occur after the warranty period expires, and that in most cases, the repairs cost "about the same" anyway. Two potential exceptions were RPTVs and 
Yep.. I agree.. I never get the extended warranty that BestBuy offers me all-the-time.. Only time I have ever dropped the cash was for my 360.. I felt in this case it was a must, seeing M$ doesnt warranty them that long and with all the rash of problems..
Otherwise, from my POV (cable service tech), I would say that with TVs either your gunna have a problem right outa the box or in the first week or 2, or well after the warranty has expired (prob even you extended warranty)..
Most electronics are this way.. My Samsung SATA HDD died on my just about 1 month after the warrenty expired..
Again this is just coming from me, What Do I Know?
Hmm... Phour, your SATA drive died 1 month after the manufacturer's warranty expired, or your extended warranty? It sounds like you never buy extended warranties, so i'm guessin you're talking about your manufacturer's warranty expiring?
Well, if that's the case, wouldn't that mean that had you bought an extended warranty on your SATA drive, it WOULD have been a good idea for you, since you would have gotten it replaced/upgraded for free?
/boggle
While we're on the topic,
In some states (I believe California is one), you can return extended warranties at any time for a prorated refund. So if your fancy new purchase turns up missing, at least you get can that part of your money back.
But, now Sears require you to take the base level extended warranty to be able to return the item to the store, otherwise, the salesman told me you have to return the item directly to the manufacturer.
CORRETION!!!!!!
Bad info in article. Apple computers don't "only" include 90 days of phone support, they also include 1 year of parts and labor. That's why you can buy the extended Apple warranty called Apple Care up to one year after purchase, b/c you're still under warranty.
I agree after re-reading the article. The article was horribly put together! I found the article that the Consumer Agency wrote(very long) and this article was chopped and hacked from the original report like a SuperMarket News Magazine. Come on Engadget!
I see this sentiment brought up a lot. I've benefited from extended warranties in the past and would never pass it up when buying a major electronics device.
When my 360 burned out, a week after the factory warranty expired, it was my extended that kicked in and got me a new one. My sister didn't buy an extended for her digital camera and lost out as a result.
What's amazing to me is that I was able to turn my 360 in without any hassle. The clerk took my console, told me to grab another, and let me walk. It may not be true for all retailers but my local B&M was great.
I disagree with the blanket statement that they are bad.
iPod: Good. I bought a 4G 40GB model. It failed on me 3 times in 2 years. If I didn't have the warranty only the first failure would have been covered - at a cost of $29.95 at the apple store. Instead, I got it swapped out on site at the store instantly.
CRT TV: Bad.
Projection TV: Good. especially the new high dollar ones with backlights/projection lights. Those suckers burn out, and cost half the price of the TV. The warranties from Best Buy (at least) cover them.
Game Systems/Games Themselves: I view that as a waste of money
computers: Good from Applecare especially for an iMac ($149 or so) but more dangerous with the Laptop ($349). I bought one with my Mac Pro, as I appreciate the support when something gets scrambled as it can happen.
I bought a 3 year extended warranty for my iRiver HD320 when I bought it last April, purely because it covered accidental damage, and also because they would replace it with an equivalent spec'd player if mine was discontinued. Loe and behold...it had an accident a few weeks ago, one which assured it couldn't be repaired. Now I'm sat here with a shiny archos 404 with the remaining 2 years on the warranty. It'd be a shame if this one had an accident next year... :)
I disagree with the article.
Obviously, you've never owned a Sirius S50. I had many, many replacements in a year. Well worth the $49 cost from Circuit City.
Bought the warranty with my Stiletto as well. Been rock solid over the past 1.5 months, but I got the warranty juuust in case.
Based on my own experience, I'd recommend an extended warranty on anything 'portable' or 'handheld' that contains a hard drive.
All four HDD-based DAPs I've owned prior to my 5G iPod have suffered from manufacturing defects within the first year. The $30 extended warranty I got from Best Buy made exchanges simple.
540Ninja,
Surely punishing companies for providing dodgy products (by forcing them to repair or replace them) will push the market towards creating better products? I can't see why you think it would do the opposite.
One word...
COSTCO.
Apple products are so good that you should never need to buy AppleCare!
Not when you consider the Best Buy ADH Plan. (Accidental Damage from Handling) Its a special plan for notebooks covering everything but submersion in water. Spend an extra $300 now on that new laptop and when the 3rd year rolls around smash the crap out of it so its beyond repair and your system will have to be replaced with whatever is new on the shelves. $300 for a new laptop isn't that bad if you ask me.
I got a Ext. Warranty for my Xbox at Best Buy a few years back and I think it was like $25 or something around there. I got my controller replaced once, and got a brand new xbox another time and they gave me $20 dollars back since the price of the system had dropped. I also bought one for my Gateway tablet, it was $250 and I think Ive made up for the costs because Ive had to send it in for repair once and I have to send it in once again due to a broken hinge and I need a battery replacement.
Well, if extended warranties are a bad deal, and you dont buy it, and then all of a sudden a year, 2 years, or even 3 weeks after you bought your shiny new laptop, dont come crying to us when your buddy/dog/cat knocked over your drink and fried the entire thing, or it slipped out of your hands, shattered the screen and wont turn on anymore.
The manufacturer is just gonna say tough s***.
At least our warranties are nice, as they'll cover any thing that happens to your purchase (Best Buy)
Maaann...Why'd you have to go and post that?? I work for Best Buy. I'm pretty good at selling those Product Replacement Plans and Product Service Plans. And yeah, I buy them myself, too. the easiest ones to sell are the $3-5 PRPs on games, and the ones for cordless phones. Those batteries are always dying. Some items definitely need warranties.
I agree, costco is the only way to go. I had a rptv that had a bad power supply 6 months after i bought it and costco gave me credit for the entire purchase instantly, now i have a newer tv with all the bells and whistles...
On the topic of the Brits, i feel sorry for you... VAT sucks and i had a horrible experience on the M1 when i was stuck there for 6 hours transferring airports when a lorrie caught fire. The "emergency crews" were all standing around on holiday while traffic went 10 km in 6 hours. At least in the US we get the job done in a swift manner... lol anyways, had to get that off my chest...
I purchase Apple's Extended Warranty for all iPods that I purchase...I know that the battery will need to be replaced within the three year warranty period. I pay 50 bucks for the warranty now - instead of paying $75 or more later for the battery replacement.
There's a reason the COSTCO replacement plan rocks. I used to work there and I can vouch for the fact that they will take anything back at any time. This is because they strong-arm the crap out of their suppliers with their bulk buying power. If Sony tells them that they wont take back projectors with burnt bulbs 2 years after they were shipped, then COSTCO says they wont buy ANYTHING from Sony ever again. Guess what Sony says,...
COSTCO doesn't need to ask their suppliers to bend over, they just need to say how far.
I currently work for an electronics retailer and can vouch for the EW. It's hard to get people to go along with them on game consoles, but I have yet to find someone with buyer's remorse after purchasing the warranty. Especially on the XBox360.
I learned the hard way when my Dell DJ-20 died 2mos after the 1yr wty expired. Got the EW on Dell x30, had 4 replacements in 2yrs vs being screwed after that 1yr wty expired.
Got my DS replaced twice for pixels & hinge (upgraded to DS Lite), my Zen Sleek for hdd failure (upgraded to Zen Vision: M), and I bought the EW's for my other toys from Best Buy.
EW's are worth it, and it's peace-of-mind- that I like. :o)
ac: You don't have sales tax?
So if I don't buy the extended warranty and my new product is one of the rare ones that does break down after say 20 months, will Consumer Reports pick up the tab. That's Great.
Who didn't know that these things are all profit for the retailer. Trouble is if you are the one stuck with a $500 repair bill on a $450 video camera, that $30 warranty you passed up starts looking mighty attractive. What, I can't buy extended warranty after it broke down???
Still I suppose you can always 'drop' or 'lose' the faulty item.
"Yo word up fellas and filet. I work at CompUSA and I sell the extended warranties and I really think they are a wise idea for example Laptops with our warranty you also get a battery replacement so even if nothing goes wrong you still get a battery
also accidental screen damage. But aside from that I would defiantly recommended it on peripherals because I use it all the time and I tell you how to use it properly
Example: Video Card, When I first started i bought a cheap video card I bought "TAP" (our extended warranty) on it then next month I "TAP replaced" it for a new better one I did this at my leisure until now i have a 7950gt which i will be trading for a 8800 when I get paid. Keep in mind you do have to pay the difference
and buy the warranty again but its a good upgrade plan plus if they don't carry your card anymore (they usually carry it for 6 months) they give you in-store credit you just need to ask!
PS of course AppleCare is A good Idea Apple Takes Good Care Of Their Warranty Buyers
"
Was this even English?? One of the reasons I have never bought an extended warranty is because more often than not the punk trying to sell it to me speaks like this guy. I would be more inclined to buy one if the salesperson was not a gibberish speaking, lying scumbag looking to screw me.
I picked up a Canon SD 450 last year for my b-day from Best Buy, and bought the EW (at my wife's suggestion) with it. Well, almost a year to the day, the lens stopped working, and I brought it in to BB, they took it and told me to call in a week. I happened to be there picking up something else and checked on my camera, and the response I got was: "Your camera cannot be fixed, and they can't get replacement parts for it, so go pick out a new camera." So, I got a brand spanking new SD 630 as the replacement. So, the warranty has already paid for itself. (The camera set me back $349 originally, and the lens reapir w/o warranty would have cost me about $250)
While I agree most times the EW is crap (do you need it for a $60 360 game?), for big ticket or portable devices, the ratio of replacement cost to warranty price makes it worth it.
I think it's hilarious to hear all these people talk about their broken iPods. Just reading these comments you'd think it's the most shoddily-made product on the market. So much for the whole "Apple products just work" BS.
I never buy extended warranties for two reasons. First, companies wouldn't sell extended warranties if it didn't make them money. Second, the risk protection you're buying from an extended warranty is meaningless in the long run. You know that over the course of your life you will probably spend $15,000 or more on computers and other electronics. If a $400 xbox breaks on you, it's not the end of the world, and over the long run, you'll save hundreds and maybe thousands by not buying the extended warranty so losing one item won't kill you. (If it is going to kill you, then you have no business buying that thing in the first place.)
Extended warranties on cars are complete BS.
I read an article a few years ago on how manufacturers do spot test on their products to determine the mean time between failures and compared that with items that failed due to manufacturing defects. Since they cannot test every single item, they come up with algorithms to determine a period where the failure is truely due to a manufacturing defect and provide a warranty to cover that period. Anything that last beyond that should last for several years. And since most electronics nowadays are solid state, failures are very rare. I got tagged team by two Best Buy nitwhits about extended warranties when trying to persuade a friend not to buy one. In the end, they scurried away with their tails between their legs as I outlined the above to the dorks.
Ok, there's a LOT of completely false information on here, so here's the actual real information for those who want to be informed.
AppleCare. For Apple computers, they come with 90 days of phone support, and one year of parts and labor. The AppleCare extends phone support AND parts/labor to three years. It does not cover any accidental damage, nor is it a replacement plan.
For iPods, they come with 90 days of *one instance* for phone support. You can call one time within 90 days. There is also one year parts/labor. The AppleCare extends phone and p/l to two years, including 'battery replacement' if your battery does not retain over 50% of its charge. For that, though, you send your iPod in, and you get another one back that may or not have been your original unit.
A store-bought iPod replacement battery, with tools and instructions, is between 19-29 dollars. If you don't think you can handle doing it, then I'd recommend either AppleCare or a store warranty. If you're lucky enough to live near a Micro Center (like in Northern VA), they have their own replacement plans and AppleCare to choose from.
AppleCare also includes something most warranties do not - the phone support includes assistance with using the OS and all of the Apple applications. For a new user, it is instant access to help at a cheaper price than most training programs would be.
Using a replacement plan as a means to upgrade working/operational systems is part of what makes the retailers hike up prices and pass the increases on to everyone. I don't recommend abusing them, but I do think they make sense for items that get a lot of wear and tear like iPods, printers, cameras, etc.
And yes, many stores not only pay higher commissions on service plans, but they also push the sales people to sell them. We make $4 an hour before commissions, so there is a big incentive, and because of that, some will push the plans heavily. But if you find a good salesperson that you trust that is knowledgeable, get the plan they recommend. Especially from the woman in the Mac area :)
I'll second the extended warranty on game consoles
My 5 month old Xbox handed me the red circle of death today. Gee, thanks Micro$oft for the generous warranty! Now I'm out another $140
I just flat out hate this debate all together. I sold consumer electronics and most of the time the warranty could go either way for me. It comes down to a few things.
1. Logically make a decision on the price of your item, the warranty cost, and known repair costs.(ex. A DLP lamp)
2. The newer and higher the technology in the item the more likely it is to break and more expensive to repair. (ex. PS2, My first one went dead within 3 months of purchase)
3. What DOESN'T the warranty cover. You may be buying a warranty that doesn't even cover the item you are most concernd about. (ex. most warranties do not cover physical damage)
If you think about things like this the decision is easy. You will either quickly find out the warranty is not for you or it is. Do not ask a salesperson their opinion either...because they will tell you whatever is going to benefit them.
So I work for Best Buy, in geek squad. Don't flame me, I also work in the IT industry full time and go to save the people who bring their computers into Geek Squad by doing the repair the correct way. I will tell you that extended warranties can be worth it. The accidental damage coverage on a laptop is golden and if you don't get it on an iPod then you are retarded. It will break, they all do. The game consoles need it too, they always crap out as well. I have seen so many of them come in its unreal. As for a cheapo computer, i don't see the need. Spend the money on antivirus and anti spyware software, this is for the general public that does not know computers and needs their hand held with the software. I am sure there are some more items I would get it on but I can't think of them right now. Anything portable you can get accidental damage coverage on, get it.
It's always good to get an origanal manufatures warranty, not an off brand warranty company.
I got a laptop and had the 3 year warranty and trust me, I made use of it. The jack almost inevitably wears out or gets pushed in, and they end up having to replace the whole motherboard... running you up towards $600 each time. That's not counting the AC adapter and Battery being replaced. It's worth it, just not on everything. Laptops are guaranteed to want to get it for. I'm actually extending my warranty another 2 years on top of the 3 I've already gotten.
With the Xbox 360 I got Game Crazy's warranty and it was actually help full...but you were also forced to buy it. With my Sony television the light went out and the warranty was still good....but mostly warranty's and extended warranty's are just a waste.
I read something in the summer about insurance that tells you when to buy it. Basically, you should only buy insurance if you can't afford to replace the product if it breaks as a policy is priced in favour of the provider.
so if you can afford to replace the HDTV if it breaks, then don't buy insurance as the odds are you won't need it.