All right, I’ll admit it; I’m a real cynic. I always think there’s a hidden agenda. Furthermore, I still think there may be a scam hiding in every offer made by a retail business. So, when I purchase an electronic gadget and get offered the extended warranty, my suspicion is automatically aroused.
Are extended warranties manifest money grabbing scam or are they worth it?
According to consumerreports.org, you should skip the service plan on purchases like electronics and appliances. They also mention that products rarely break within the warranty period. Also, they the fact that some repairs may already be covered by the manufacturer’s basic warranty on the product.
If these plans are such a scam, why are major retailers, with precious reputations to protect, offering them on such a regular basis? I did some additional research and found these scenarios where having bought the extended warranty will save you time, effort, and money.
Repairs Outside The Manufacturer’s Warranty
Most manufacturers’ warranties are pretty sparse to begin with and some products are more likely to need repairs than others. You should familiarize yourself with the manufacturer’s warranty to decide whether the extended warranty will be worth it. Once you know what’s covered or not, you can make some common sense assessments about what else may or may not break on your product while you own it.
You can also ask your friends, who have bought similar items, what repairs theirs have needed since they’ve bought them. Find out what the most common complaints are about certain products or certain brands and then compare those to the manufacturer’s warranty.
When Products Are Cheaply Made
Further to educating yourself about the manufacturer’s coverage, you should also take a look inside your product, when feasible, to see how it’s made. For example, if I had taken a closer look at my dishwasher when I bought it, I would have noticed that the issue with the brackets. The brackets that are holding up the top rack are made of all-plastic parts that get a lot of wear and tear. If I would have thought the purchase through, I would have noticed the flimsiness of the plastic parts. I would have saved money had bought the extended warranty on my dishwasher. I have replaced those parts twice in the last three years and anticipate replacing them many more times during the life of the appliance.
When Products May Outlast The Warranty Period
As in my dishwasher example, some products you can expect to own for many, many years. Other things, like electronics, where their technology gets obsolete fast, you probably wouldn’t even own them long enough to see the entire extended warranty period through. Make sure you take the reasonable expectation of how long you’ll own the product into account when assessing the worth of a service plan on it.
When Repairs Or Parts Are Expensive
Things like batteries, specialized parts, and especially labor can be very expensive. When you’re considering an extended plan on a product, take a moment to educate yourself on how expensive it is to fix in the first place. You may have to replace a second part 10 times to get your money out of a service plan. However, one part of a foreign car could make the whole thing pay for itself.
When Products Rate Low For Reliability
Check out the consumer reports studies done on the brand you’re looking at buying. Certain brands are known for unreliability but may have other redeeming qualities. In that case, buying an extended warranty could be the way to go. You can rest easy, knowing that when the tricky part breaks, you’re covered, making the other benefits of the product worthwhile, despite its reputation for needing repairs.
When Buying A Used Product
Sometimes you can buy an extended warranty on a reconditioned or pre-owned product. Again, taking into account all the above criteria, it may not be a bad idea to have the extra coverage. This is especially for big-ticket items that may require expensive repairs or have more potential for breakages. Purchasing the extended coverage may buy you peace of mind.
The secret to making the right decision, when it comes to extended warranties, is to educate yourself on the product. Know what’s already covered by the manufacturer’s warranty and by your credit card’s guarantee, familiarize yourself with the moving parts of the product, ask your friends what they think of the product, and know how much it would otherwise cost you to repair it yourself. After you’ve done this initial amount of research, you can breathe easy, knowing you’re covered.