Extended Warranties: Sensible Insurance or Waste of Money?
Extended Warranties: Sensible Insurance or Waste of Money?
Main Cons
Main Pros
If You Buy: How to Get the Best Value
Extended Warranties Sensible Insurance or Waste of Money - To learn more about this author, visit Linda Jacobson's Website.
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Overview
- An extended warranty is a guarantee of a product under conditions of ordinary use, and covers a period after the standard, free warranty expires.
- Extended warranties are usually highly profitable for retailers and a waste of money for consumers.
Main Cons
- Extended warranties are expensive, at approximately 10% of the purchase price per year of cover.
- Repairs typically cost about the same as the warranty.
- Covered parts seldom break within the extended warranty window. Most faults occur within the first year, which is covered anyway.
- For most businesses, keeping a couple of spare laptops in the office will cover the business continuity side of laptop or desktop computer failures.
Main Pros
- If warranties offer a true business continuity advantage – not just replacement parts – at a fair price, and uptime is critical, then they are worth considering.
- If you can negotiate a great price, or the warranty really offers a good deal, go with it.
- Features to look for are on-site service, guaranteed response times and advance replacement.
- Laptops that travel a lot and certain PCs might be worth covering, but laptops are likely to need additional accident cover.
If You Buy: How to Get the Best Value
- Negotiate on price and shop around.
- Consider third-party warranties.
- Don’t pay more than 10% of the purchase price per year of warranty.
- Make sure the extended warranty doesn’t overlap with the 1-year manufacturer’s warranty, effectively providing a year less cover.
Extended Warranties Sensible Insurance or Waste of Money - To learn more about this author, visit Linda Jacobson's Website.
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