3 Things to Know About Extended Warranties
You've probably been in the position of buying a personal electronics device when a salesperson attempts to sell you an extended warranty. It's estimated that when you walk into a store to buy an electronics item, you're going to be pitched on an extended warranty at the cash register more than fifty percent of the time. When it comes to buying more expensive electronics, you can expect to get pitched at even more often.
Is the cost of an extended warranty worth the purchase price? Many people are justly worried about getting ripped off and paying for something they don't really need. Here's everything you know about extended warranties to make an informed decision on whether or not to purchase them.
Is an Extended Warranty Worth It?
You never know when you first buy a product when it's finally going to break. The average useful lifetime of a particular product is not available from the manufacturers or the warranty companies. They have that information, but they choose instead not to release it to the public.
Some people stay away from extended warranties of any kind because they are so slanted towards the sellers and not the consumers. For a typical extended warranty, less than 20 percent of the money consumers collectively pay into those warranties is ever paid pack out to them. The rest of that is going to profit and towards overhead. Part of that overhead might include a commission if the salesperson is given an incentive to push the extended warranty, which handsomely rewards the person selling it more than the person buying it.
If you're at all confused about whether you should buy an extended warranty for a product, you should talk to other people who've bought the same product before you go and buy an extended warranty for it. If the product has known issues that are covered by a warranty, the extended warranty might be well worth the money.
What an Extended Warranty Covers
Before you buy a warranty, you should know exactly what extended warranties cover. It's becoming increasingly common to see warranties filled with limitations. It's an unfortunate fact that many who actually end up using an extended warranty end up dissatisfied because of the extended warranty's limitations.
A good rule of thumb when buying electronics is to buy everything using your credit card. Many credit card companies will cover your costs in instances such as if your electronics item breaks or is stolen. If you do purchase an extended warranty, some credit card companies will automatically double its length at no cost to you. You can call your various credit card companies and ask what consumer purchase protections they offer.
Don't forget that you should first use your retailer's return policy before resorting to the hassle of trying to get money back from your extended warranty. This allows you to return products and get your money right away. It will be one less thing to think about rather than waiting on a less reliable payout from the warranty.
Aren't Extended Warranties Good for Electronics?
Technology companies are willing to sell you extended warranties for their products as they cover at least some of the damage that might occur to the hardware that you purchased. It is a calculated cost for all of those electronics devices whether their extended warranties are worth the money. A consumer electronics device might not be worth the extended warranty for any potential damage if you’d just throw the thing out and buy another one regardless. Most people aren’t willing to wait around long anymore in the cases when a consumer electronics device like a phone goes bad.
If an item is easily replaceable and relatively cheap, it’s probably not worth buying an extended warranty. But every single computer you’ve had go probably had some mysterious problem (whether power supply, memory or a faulty hard drive) that required repairs that would have cost more than the extended warranty. It’s recommended to buy extended warranties from computer makers, like AppleCare (for Apple) or ThinkPlus (for Lenovo).
Read Your Extended Warranty's Fine Print
A warranty wouldn't be complete without the fine print. It pays to read the fine print to see what your options are to get your item replaced. It's even advisable for you to go from store to store and compare extended warranty coverages so that you check who has a better extended warranty given the price. Realizing that there are restrictions on extended warranties, you should know what you're getting into when you buy one. Frequent extended warranty restrictions include:
- It doesn't cover product failure after a reasonable time.
- It doesn't cover accidental damage.
- It doesn't cover products worth more than a certain dollar amount. This amount varies and is subject to local and state laws.
- It might not offer an item loaner during repair, which can be a hassle.
Your warranty will not cover items if they deem that you didn't store or operate them properly. Where you choose to store electronics items (perhaps in a humid place or someplace dank like your garage) may make your extended warranty invalid.
There are plusses and minuses for buying an extended warranty. If you choose to purchase one, make sure a good company services the warranty. As long as it's not too expensive, the extended warranty cost might be worth the extra peace of mind you get in return.