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Often extended warranties cost more than they’re worth, are never needed and don’t follow through when they are.
Unless you’re a fan of throwing money down the drain, purchasing an extended warranty—also known as a service contract—for your newest consumer electronic device probably isn’t for you. Here’s why.
Replacement costs less.
Typically, the cost to replace your vacuum cleaner, camcorder or digital camera will cost less than it will to purchase an extended warranty for that item.
Repairs can cost the same or less.
Sometimes the cost of a repair is equal to or less than the cost of the extended warranty. And products don’t often break within the extended warranty timeframe, if they break down at all. Your best bet is to buy a brand that is well known for its reliability.
Most products come with a standard warranty.
Standard warranties for electronics typically cover parts for one year and labor for 90 days. Often, a year is plenty of coverage.
Making a claim through an extended warranty can be frustrating.
The warranty you hold may not cover everything you think it does, which could leave you holding the bag when it comes time to make a claim. And even when it does cover the needed repair, the company holding the warranty decides who does the repair work. This means you’re on their timeline, their policies and their workmanship—which can often be lacking.
Or, you could find that the company holding your warranty went out of business, possibly even years ago. Not only will you have to cover the repair costs, but you’re also out of the money you spent for the warranty to begin with.
Your extended warranty may overlap the standard warranty.
Your extended warranty begins the day you purchase it. If your electronic device comes with a standard warranty, then your extended warranty is doubling your coverage—so, essentially a two-year extended policy is really only providing one year of additional coverage.
Other warranty programs may be available to you.
Before you purchase an extended warranty, check with the credit card you’re using to make the purchase or the store you’re buying it from. Credit card companies often offer additional warranty protection and some stores, like Costco, extend the manufacturer’s warranty of some items at no cost to you.
Check out Service Contracts: Should You Buy One for more information on extended warranties.
