You can buy an extended warranty on almost anything today. (I just got one when I bought my elliptical because it guaranteed me a working machine for three years.) But are they worth it?
Consumer Reports isn't sure what to think. First of all, they say that an extended warranty usually isn't worth it. Their thoughts:
For years, Consumer Reports has cautioned against buying this costly coverage. Survey data from thousands of readers have shown that, generally, extended warranties cost not much less than the average repair. That’s if you need a repair at all. As you can see in Product repair rates, many electronics products are unlikely to need repairs within the first three years.
When it comes to plasma and liquid-crystal display (LCD) TVs, however, the decision is more difficult. Preliminary data from our user surveys show no unusual rate of repair for flat screen plasma and LCD TVs in the first year, but long-term reliability is still unknown.
Before you say yes to an extended warranty on any product, see whether your credit card provides similar coverage. Such plans, most often found on gold and platinum cards, typically lengthen the original manufacturer’s warranty by up to one year. If you use a MasterCard, look in the fine print for the words “extended warranty.” Visa calls its program Warranty Manager Service.
Consumer Reports then backs up their findings with a handy product repair rate table.
But the magazine hedges a bit in another piece that says sometimes extended warranties are good deals:
But sometimes an extended warranty may make sense. If you're buying a treadmill or an elliptical trainer with a standard warranty of less than a year on parts and labor, you should consider an extended warranty, which costs around $70 to more than $100 for two to three years of coverage. That's not bad, considering that a service call costs $75 to $100 before you pay for parts.
You might consider an extended warranty on a laptop computer. Laptops are expensive, fragile, and hard to repair. And the parts are made to fit within the manufacturer's unique case design. For that reason, you should buy the warranty from the manufacturer, not from the retailer. Also, with a manufacturer's warranty, you continue to enjoy access to free tech support.
For another take on the subject, here are some thoughts from MSN:
Whether an extended warranty is a wise purchase depends on estimates--or guesses--on your part. These tips can help you make up your mind:
- Read the terms before you buy
- Determine the coverage term
- Beware shipping charges
- Consider accidental damage coverage
- Know the cancellation terms
- Look for extras
- Investigate the product's reliability
- Weigh plan cost vs. product cost
- Shop around
- Check your credit card terms
It's really not clear one way or the other. We usually do NOT get the extended warranty unless there's a compelling reason to do so. In most cases, manufacturers make their products good enough and the products have a basic warranty from them.
Do any of you have any guidelines you'd like to share with the rest of us? What "rules" do you use to decide whether or not to buy the extended warranty?