Buy anything at an electronics or appliance store in today’s world and I can guarantee that at some point during the checkout process you’ll hear these words – “Would you like to purchase an extended warranty?” Confronted with the need to make a quick decision (there are people waiting behind you!) and the thought of your new toy breaking, many of us are inclined to take the deal, but are these extra warranties really worth it?
The short answer is a resounding “NO.” The long answer is, “Well, they might be for specific products under specific circumstances,” but we’ll get to that in a second. First, let’s look at the definite cons of extended warranties.
…YOU’RE PROBABLY NOT COVERED FOR GENERAL WEAR AND TEAR OR ACCIDENTS…
The first problem with protection plans and extended warranties is that they rarely get used. Last year, Consumer Reports’ Tony Giorgianni spoke about a Consumer Report survey on this very subject. “Our reader survey shows that products don’t break down that much during the service contract period,” he said, “And even if they do, it doesn’t cost that much more to repair them than it does for the contract itself.”
If there’s something obviously wrong with your product, you’ll know before the manufacturer’s warranty is up. If your TV has dead pixels, your fridge won’t make ice, or your dryer isn’t drying, you’ll know within a day or so of purchase. If you make it past the timeframe that the manufacturer’s warranty covers, chances are your product will work for at least a year or two after that.
The second problem is a simple matter of progress. By the time you need that three-year extended warranty on your digital camera, there’s a good chance you’ll be able to buy a better camera at a fraction of the price you paid for the original. On top of that, you’re probably not covered for general wear and tear or accidents like water spills or drops, which become more of a factor as time passes.
So when are warranties worth it? The general consensus is that extended warranties that WILL cover accidental damage are often a good investment for laptops, especially if you plan on traveling with them often. The same thinking can probably be applied to some of the more expensive tablets as well.
The key is to do your research. Does the extra warranty kick in after the manufacturer’s warranty, or will you have wasted double-coverage time? Does the warranty cover accidental drops? What about liquid damage? How long will replacement take? If the answers to these questions aren’t to your liking, it’s a safe bet that skipping the extra warranty is the way to go.
A final thought on the subject: As the saying goes, “The house always wins.” Companies aren’t usually in the business of losing money, and extended warranties are no different. The simple fact is that these companies are making far, far more money on warranties than they’re paying out, and the fact that they’re pushed so heavily should be more of a sign than anything else.