Poll: Extended warranties, necessity or shakedown?

As former tech retail geeks in another life, we know better than anyone the kind of pressure salespeople at the big box retailers put on adding extended (often 3rd party) warranties on gadget purchases. Oh sure, it preys on uninformed customers' fears that their expensive new toys will break down a exactly 91 days after purchase and they'll be left in the lurch -- but sometimes those warranties can actually come in handy. That is, if you can convince the warranty people to pony up, which is just a step below the frustration of dealing with most HMOs. So, what's your take on extended warranties?

Poll: Extended warranties, necessity or shakedown?

Yep, I'll continue buying 'em even though I've never really had any out of warranty problems.It's worth it -- I've had problems in the past, and they've helped out.Honestly, it really depends on the kind of device and the kind of warranty. Caveat emptor.No way, I've gotten a warranty in the past and wound up burned.Hell no dude, they're all scams!Does it really matter? I just want these fools to stop pushing them at the store!Why bother? I'm buying the new version every six weeks anyway.You know what? I'm sick of gadgets failing out of warranty. Maybe it's time to look into this thing.Vote

[Jeffrey @ Dec 6th 2007 3:13PM]

It depends what I'm buying, If i'm spending 2500 on a laptop, I'm gonna get the extended warranty, but if its 80 bucks on a stationary radio, why would I waste 30 bucks on a warranty. I'm better off just buying anew one.

[Andrew @ Dec 6th 2007 3:41PM]

Meh, price isn't always the determining factor. Used to work at a Brick and mortar storE whoSe name musT remain anon, BUt luckY you I offered hints.

Some items are known to have a short life cycle, and with the 3rd party replacement plan, you're guaranteed a similar item years later. For example, the iPod nano's battery was known to go dead within 2 years. Pay a few extra bucks for the plan, 2-3 years later you can get a brand new iPod nano with more storage capacity, smaller size, newer software.

On the other hand, buying one for a laptop is just silly. You're probably going to buy a new laptop within 4 years, and it's very rare that a laptop's hardware will go bad. If it does, it's probably your fault, and you're responsible for damages. That's one of those big ticket items they make you feel the plan is appropriate for when it really isn't.

[Steven @ Dec 6th 2007 4:16PM]

I have not purchased many high-end electronics, and so have not been confronted with this decision, but purchasing an extended 3rd party warranty seems to be a lot like gambling. You bet the product you just dropped mucho dinero for breaks (seemingly betting against yourself), 3rd party bets it doesn't. Clearly, they are making money on this idea; lest they go bankrupt/stop offering extended warranty, so I would be hesitant regardless of price. A little homework in reviews, consumer reports, etc will probably give you good indication of long term performance of product.

[Ed @ Dec 6th 2007 4:17PM]

Subtle.

[Nushio (NDF - Blue) @ Dec 6th 2007 4:24PM]

I bought a 1200 USD laptop from dell about a year ago. They're asking me around 400 bucks for an extended, 3 year warranty. Thats 1/3 of a [new] laptop I could be getting...

So for me, its a hell naw!

[Grey Acumen @ Dec 6th 2007 4:45PM]

I've got to totally disagree with Andrew here. I had a laptop around $2500 and it ended up wearing out the pin that the ac cord plugs into. In order to fix this, the entire motherboard had to be replaced and this happened some 3 times, not counting the battery replacement that I got. The $400 warranty covered me for the 3 years i had it, which had something up around $3000+ worth of repairs.
Since it was still under the warranty after the 3rd repair, it got junked out for a comparable laptop. Admitedly, this one is only about $1100 or so now, but it's got a lot of bonus features that my old laptop didn't have, plus pretty much better storage memory and just about anything else I can think of. I didn't have to pay a thing, and on top of that, they even threw in a USB hardrive shell that I was able to put my old laptop hardrive on so that I didn't lose any data and still use as an 60GB external drive.
Some people might be boasting about their amazing $300GB external drives and such, but my laptop works just fine. Maybe you consider $1000 a year for a new laptop to be standard expenses, but not everyone feels that to be necessary.

For a second case, my sister got an MP3 player as a gift for christmas, it had an extended warranty. It has been replaced roughly 3 times under the same warranty. It started out as a 128M battery powered MP3 player. It now has been upgraded to a 2GB w/ rechargable battery, and I've even gotten money BACK each time through.

[SteveMB @ Dec 6th 2007 4:52PM]

Andrew, have you ever owned a Clevo laptop?

[Alex Padilla @ Dec 6th 2007 4:52PM]

@ Andrew

+10 for creativity and cleverness

and anyway, I'm probably going to buy AppleCare for my MacBook, because I have this feeling that something bad will happen to my computer and I'm going to wish I spent the money on it.

ominous feelings are not to be ignored.

[Wwhat @ Dec 6th 2007 5:33PM]

If an item is a few thousand bucks then I expect it to come with a decent warranty of itself, you should need any extended warranty.
And if the item doesn't you should not buy it IMHO.

[Lea Hernandez @ Dec 6th 2007 6:30PM]

We got totally dicked (and not in a good way) by Compoosa. What you're not told about your extended warranty is that it only starts when the manufacturer's ends. That means you get to pay for a year of warranty the store you bought it from doesn't actually give you.

No more warranties for me on laptops. Replacement plan on stuff like headsets, iPods, and the like, yes. You get a replacement. Repair plan, not just no, but hell no. Total rip-off.

If an extended warranty kicked in when the manufacturer's was OVER, I'd buy. As it is, no just no but hell no.

[Tavis Veighey @ Dec 6th 2007 8:56PM]

@ Andrew
2 years go I purchaed a nice Laptop for $1,100. 3 months ago the LAN card failed. 2 months ago the DVD Burner stopped burning. 1 month ago the hinge for the screen broke.
3 weeks ago I purchased a new gaming laptop for $2,000... If I had purchased the warranty 2 years ago, I would have only paid $900 for my new laptop.

If it is a cheap laptop, than it is not worth it... But if you are getting a higher end laptop, than it can be worth it.

[Linoth @ Dec 6th 2007 10:43PM]

@Andrew
I'm terribly sorry, but I absolutely babied my laptop. It rarely left my desk, but it did see regular use in being turned on.
Backlights have developed a flicker for over a year that may be related to the problem I just repaired.
Mysterious cracks show up around the screen-casing. For a laptop that moves perhaps five times a week, and is still inside the house the entire time, this is most puzzling.
Video cable developed some sort of line break and had to be completely replaced in order for certain shades of color (i.e. 255/255/255 white) to not show up as magenta.
Battery no longer charges reliably and has dropped from a 90 minute life-time to a 30-40 minute lifetime.

Laptops DO NOT, PERIOD, have a life expectancy on par with a desktop computer. They just do not survive as well, and the majority of the time the first piece of hardware to give you trouble is the screen ($200 in my case) or the battery ($90). Granted, this was a $650 laptop when new, it disappeared from anyone's notice within the store (we literally had 3 of the HP model and 2 of the Compaq sitting in the back for 5+ months) and ended up on slash-them-til-they're-gone clearance. Picked it up for just shy of $300, so it wasn't really financially reasonable to put a replacement plan on it. If you need the laptop to last, reliably, for three years then I'd suggest getting the plan and making sure that your screen is covered. At the very least, it will pay for your screen ahead of time so you don't have to.

In regards to the article, though, yes, the replacement plans can be deceptive and need to be put out in clear english. The once I was selling at an Office supply store with a Decent spread in the southern US were very... vague. They either replaced your product straight across or gave you a gift card for the value of the merchandise. Of course, the management there couldn't be bothered to look this up and explain it clearly, so we were misrepresenting the plans to all customers. I can see it on some failure prone equipment, such as low-tier printers in the butter zone, but we were required to offer it on calculators over $5 and on electric pencil sharpeners. That's... ridiculous.

[R031E5 @ Dec 6th 2007 3:14PM]

Well, considering that without my AppleCare warranty I'd had spend aprox 1200 worth in MacBook Pro batteries, yes it IS worth it!

[Truegod @ Dec 6th 2007 3:28PM]

I always pick up an AppleCare warranty for my Apple gadgets. 10 replacement iPods (not exaggerating), 3 dead iMacs, and 3 broken iBooks... It's saved me a lot of money.

[BigPana @ Dec 6th 2007 3:32PM]

@Truegod
Hachi machi, what the heck are you doing to all your gadgets? :D

[Dubb @ Dec 6th 2007 3:50PM]

Way to pay attention to the article. It's about third party warranties. AppleCare being an Apple warranty plan is a first party warranty. Not really on topic.

[jus10 @ Dec 6th 2007 3:53PM]

Well my Macbook will be coming up on a year but I have no intentions of buying Applecare. At $250, the price would be over a quarter of the $850 I paid for the thing (refurbs are your friends).

I tend to buy refurbished items (as they've been taken apart, put back together and checked instead of flying off of an assembly line) and if something breaks, replace the part. If the whole thing is possessed by an evil electronic demon, junk it and start anew.

[Strack @ Dec 6th 2007 3:57PM]

@Truegod

16 failed products, and you're still Apple stuff? One company doesn't get more than a couple of shots with me. If the products don't hold up under my use, I'll find better ones.

[BigPana @ Dec 6th 2007 4:04PM]

@Dubb
It says "often 3rd party" not ONLY 3rd party

[Pavan @ Dec 13th 2007 12:31AM]

I loved when Sears tried to pitch me a 3 year extended warranty on my new Dyson... the thing comes with a 5 year bumper to handle warranty, and the 3 year extended one starts on the day you buy it!

As much as I hate Bose and Monster Cables...they charge a premium price, but they stand behind their products with a very good warranty... Why is Apple charging a premium yet having such a high failure rate?

[Hotwings @ Dec 6th 2007 3:15PM]

OMG, I'm the first person to vote and comment on this post! Anyway, yeah, I say it depends what kind of gadget it is, although, even though I rarely ever need assistance for my product from a warranty, it has happened and I suggest getting warranties for your important purchases.

[Mike @ Dec 6th 2007 3:17PM]

Fail

[Mike @ Dec 6th 2007 3:16PM]

Sometimes they are necessary like for the Xbox 360 and other high end items.

[MRCUR @ Dec 6th 2007 4:11PM]

The 360 is one of two things that I have bought extended warranties for. Best Buy PRP FTW! (I have Apple Care on my iPhone as well.)

[BigPana @ Dec 6th 2007 3:17PM]

When I buy a laptop(sometime next year) I was thinking if I should get the 3 year warrany, since I'm sure there are much smarter people out there, what do you guys suggest? Is a warranty good on a laptop that will cosr around 2500?

[Anthony @ Dec 6th 2007 3:22PM]

Only one thing has to go wrong in 3 years for it to be worth it if you consider return shipping, labor/parts costs, time, effort, etc.

When we had a widescreen projection tv we used the service to have it calibrated each year. Figured: Why not. Plus when we moved it was helpful as the 10 hrs in a big rig proved detrimental to the image. When we upgraded to an LCD it was worth it from day one as the damned thing came broke & Best Buy wanted us to first use the Samsung warranty. No thank you. They came & replaced/rehung it the same day.

[matt @ Dec 6th 2007 4:11PM]

Hey, I've sold a few laptops in my time. Here's what I tell every customer.

If you are like me, you buy a high quality laptop with a good warranty. I like the ThinkPad myself (or an Apple). I get the 4 year warranty with accident protection from Lenovo for about $100. Worth every penny.

If you are like some intelligent family members of mine, you buy a refurb consumer model laptop, with the understanding that the money saved will be reinvested in 2-3 years on a new system. (Sometimes they are fortunate and get 5+ years.) Plan on a replacement with the latest bells and whistles in 2 years.

So, I could spend $1500 for a laptop that lasts 4-5 years and have a solid aging system, or I could buy a refurb every two years at $600 and pay about $1800 with a fairly new system by the fifth year.

It's all about risk tolerance and personal preference. I view it as a long term investment. Others see it as a commodity to be bought low and discarded. Neither choice is wrong.

[Hotwings @ Dec 6th 2007 3:17PM]

well actually I'm the third person, just so I don't look like an idiot, but for some reason, when I voted, it looked like I was the only one. Plus it said 0 comments at the time. Weird.

[raerae @ Dec 6th 2007 3:19PM]

He looks awefull happy...whats under the gown dude...then again. keep it to yourself

[Hotwings @ Dec 6th 2007 3:18PM]

Although I rarely ever find my self needing assistance for a product from a warranty, it has happened before, and I do reccomend going for the warranty on your important purchases.

[Carl Vitullo @ Dec 6th 2007 3:19PM]

"Extended warranties, necessity or shakedown?" "yes"
mmmmm.... good grammar....

[imacmatt09 @ Dec 6th 2007 3:22PM]

This was totally stolen from cnet...

[Ryan Block @ Dec 6th 2007 5:29PM]

Huh? Never saw it, I don't read CNET.

[BigPana @ Dec 6th 2007 10:14PM]

What only CNET is allowed to talk about extended warranties?

[finnith @ Dec 6th 2007 10:28PM]

What happened to the blackout on CNET? I, for one, have not gone on any CNET site since Gerstmann was fired (except GameFAQS).

[Arsenic0 @ Dec 6th 2007 3:24PM]

I am with several others, it depends what i am buying.

Anything sub 300-400 dollars unless its something that i forsee myself potentially breaking...

But when i bought my DLP TV for 2500 you better be damn sure i dropped an extra 250 on an extended warranty. It covers the cost of a bulb which is gaurenteed to go out in the extended warranty period, and costs about as much as the extended warranty..so it seemed idiotic not to.

[vdogg89 @ Dec 6th 2007 6:12PM]

hey engadget, you need to stop putting 30 choices. it will help your results be more refined

[blueadept1 @ Dec 6th 2007 3:31PM]

Here in British Columbia, Canada, we have an automatically included implied warranty that is rarely voided by the retailer (ie. not voided by Best Buy). If you're in that province, read up on Section 19, I believe, of the Sale of Goods Act.

[Jezreel @ Dec 6th 2007 3:26PM]

Remember that most credit card companies will double the warranty period on purchases. Put that into consideration before you buy the extended warranty.

[nidx @ Dec 7th 2007 1:29AM]

From what I understand the credit card warranties require quotes of cost from 3 repair places (and accurate quotes can cost ~$50 each for computers)

[NHAnimator @ Dec 6th 2007 3:30PM]

I was always taught that if an electronic item was going to fail, it would probably be in the first two months. If it survived that, then you were probably in pretty good shape. That philosophy has worked for me pretty well. I pass on the extended warranties.

[Tommy @ Dec 6th 2007 3:35PM]

Being a former Best Buy employee, I know that extended warranties are pushed so much because they make Best Buy a lot of money. If Best Buy is making money on those kind of plans, then on average, the consumer is losing money if they buy the plan. Of course that means if only 2% of people have problems and you're in that 2% you're SOL.

Personally, like most people, I consider the warranty available for any given purchase, and if the cost of the item is high enough or the plan is cheap enough then I might buy it for an little extra insurance.

And why would any body buy an extended plan on something sold at Walmart. Buy it wherever you like, and when it breaks go buy a new one at walmart and take the old one back there. Walmart will take ANYTHING back. I've known people who buy stuff and put bricks in the box and take it back, and the walmart staff is to inept to notice...

[NHAnimator @ Dec 6th 2007 3:48PM]

"I've known people who..."

Not that YOU'VE ever done that, right? ;)

[wjousts @ Dec 6th 2007 3:54PM]

I've known people who buy stuff and put bricks in the box and take it back, and the walmart staff is to inept to notice...

That's nothing to be proud of. Those people are called thieves.

[DJBro @ Dec 6th 2007 4:06PM]

Speaking of Best Buy, the 4 year projector warranty for 200 bucks is totally worth it. It gets you a free replacement lamp, and if anything happens to the projector you can get a new one. The free replacement lamp alone is worth 250-350, so thats a darn good deal if you ask me. If your lamp dies within the 4 year period, you get a new one. I mean, Ive had mine for like 8 months my lamp is on hour 1500... i have a good year left id say. But who knows? My InFocus projector lamp died within 800 hours. They die for random reasons sometimes once you get them up past 100 hours. Its good to have the extra security, especially for such high priced items.

[Shad0wguy @ Dec 6th 2007 3:37PM]

It all depends on the price ratio. I worked at Circuit City and never saw the point of spending $200 for a warranty on a $500 desktop.

On the other side, I bought a Creative Zen MicroPhoto for $200. Warranty was another $35, ok. 1.5 years later it crapped. I get a giftcard for the $200 plus tax to replace it.

It all depends on if you think it is worth it. I rarely buy warranties because I take care of my stuff. If they fail out of warranty then I can only blame myself.

[Apreche @ Dec 6th 2007 3:38PM]

The extended warranty is always a ripoff. Even when you buy something like a laptop, it comes with a manufacturer's warranty which is good enough. You also have the retailer's return policy to take advantage of. If you do your research, and you take care of your belongings, then you won't have broken stuff. No broken stuff means no need to waste money on scams.

[Anthony @ Dec 6th 2007 11:59PM]

I work for one of the larger retailers in the US, one that happens to have the largest service organization in America. Along with many years in retail (along with many years in IT)
I can honestly say that depending on the item you are purchasing and who owns the warranty they can go from a complete waste of money ie: some of the office supply companies who contract to warrantech and/or ge home services. Others who own the service plan themselves like Sears, who keeps everything in house, can be a great advantage to the consumer. Most of the warranties out there are just that, an extended warranty. Some offer yearly/biyearly service on the item, many times in-home. If you look at the cost of this service in home, example a tv, its almost $190 dollars for that service that the plan would cover for free. Consider that the average service call for a $1500-$2500 item is $440, $440 that could be out of pocket, warranty can look like a great deal. Also if the consumer reads the terms of the plan they almost always can get a full refund of the price of the plan with in the items original warranty period, with out any penalties. That means you might be out of pocket $350 for a 3 year plan for say a $1800-$2000 dollar tv, but with almost all retailers offering 0% financing for xxx months your not really spending anything out of pocket, taking the full advantage of that service and still getting a full refund or a pro-rated refund if your out side of the oem's warranty period. I spend 50% of my day with the 30% of the population that skips the warranty, just to tell them there outside of the manufactures warranty and out side of the stores return policy (in most consumer electronics stores that time is anywhere from 14 days (staples, office depot etc) to 30 days sears, lowes, home depot, costco (for electronics)).

[Cheinonen @ Dec 6th 2007 3:40PM]

The only extended warranty I got was at Good Guys for a stereo, since it was the floor model I got them to throw it in at no cost. This paid off the next year when it died and the model was no longer being made, so I got the full value in store credit and bought a brand new receiver. The extended warranty for my DLP made little sense, though, since with how horribly expensive it was, I could have put that away to start saving for a new TV to replace it since the set would depreciate so much.

[Rob Vardell @ Dec 6th 2007 3:42PM]

I have a rule of thumb...if the warranty is 10% of the purchase value or less, I buy it.

Case in point, I bought my daughter an xBox 360 for Christmas. It was $279, the warranty was $17.80 for two years, that makes sense to me.