Extended Warranties: Yes or No?

Wed Dec 12, 2007 9:49PM EST

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So you're shopping last minute and decide to be extra generous and buy the big-screen HDTV, or maybe the DSLR camera I've wanted for a long time...oops, sorry. That's not meant for you.

In the excitement of the moment, the store clerk begins to rattle off the extended warranty options he recommends for purchases like yours. Of course he does; that's how the store makes money on electronics that keep falling in price. Should you bite?

The short answer: no. Consumer advocates have long said most warranties are not worth the peace of mind they supposedly bring. You're buying an insurance policy to cover repair costs should the item break after the manufacturer's warranty ends. But Consumer Reports and PC World say tests of hundreds of products indicate more are reliable and fairly durable every year. And if they should need repair, the cost is often on par with what you've paid for the warranty, according to Consumer Reports.

You're better off spending the time researching which brands and models have performed best in consumer tests than spending extra dollars in a gamble that the one you choose will have problems.

When plasma and LCD HDTVs were new and the prices were sky high, Consumer Reports recommended opting for extended warranties because the technology was untested and the TVs cost so much. But the prices have dropped, and Consumer Reports' latest reader survey finds that in the last three years, HDTV owners report few problems with their TV sets.

So CR now recommends saying no to TV warranties. (The magazine makes one exception, advising consideration of extended warranties on rear-projection TVs, which are three times more likely to need repairs than other TVs.)

Meanwhile, J.D. Power & Associates' 2007 Major Home Appliance Survey of white goods such as dishwashers, ovens, and washers/dryers finds most so reliable that no warranties are recommended on those purchases either. In the first two years of ownership, one-tenth of owners report problems with their appliances. And most of those problems can be fixed by reading the manual or seeking help on the web.

This holiday season, your best bet may be to do what CR Senior Editor Tod Marks recommends: Put the money you would have spent on an added warranty in the bank so that you'll have it in case you need to repair your latest electronics purchase.

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  • 46 Posted by chonkeng_toh on Thu Sep 3, 2009 3:23PM EDT Report Abuse

    you never know what's going to happen to your device, the service department always quote you a very high price for the repair even for a small little part.

  • 47 Posted by rpwright_00 on Thu Sep 3, 2009 8:53PM EDT Report Abuse

    I used to work in retail and was "asked" by management to push ESPs (extended service plans). I never pushed them only offered them to consumers. Now that I have gotten that out of the way, go by cost. The extended service should cost no more then 10 percent of the cost of the item and if it does skip it no matter what. Also go by how long to took you to save up for your item, ex. a cordless phone for $20 bucks, skip the ESP, but a new HD TV that took almost a year to save for after convincing the wife you "really need one" you might want to consider it. I always hated being asked to purchase the plan, but I did on a rear projection HD TV I purchased for well over a grand and the ESP was only $60 bucks, about 5% of the cost(less then tax!). Low and behold shortly after the manufactures warranty expired, it broke! The ESP covered not only the repair but also the pickup and delivery of my TV from home. Bottom line: how often to you replace what you are buying, and how much does it cost to repair?

  • 48 Posted by dslwright on Thu Sep 3, 2009 3:49PM EDT Report Abuse

    I bought and extended warranty for my front load washing machine and dryer. It as well worth the $150 because after having it for 2 years and some months, the sensor on the washer that turns the drum went bad and was covered by my extended warranty. I also bought an extended warranty on a computer I bought several, several years (before DSL, cable modems were available) and all you could use was dial up to get on the internet...well, I had three severe lightning storms and it fried my computer each time and because of the extended warranty, I got a new computer each time! So, I basically upgraded to a better machine each time. In my case, the warranties were well worth it!

  • 49 Posted by ninosdjando on Thu Sep 3, 2009 7:39PM EDT Report Abuse

    I've been through three iPods in 4 years. Yeah, I'd definitely go with the warranty on those. This article also didn't bring up the fact that Consumer Reports also strongly recommends extended warranties on laptops; something I've also repaired multiple times (the screen alone cost something like $500!). Plus they are offering accidental damage insurance for the accident-prone. I guess it's not so much the product failing that they warranty as it is the owner's negligence that they back up.

  • 50 Posted by danakscully64 on Thu Sep 3, 2009 3:34PM EDT Report Abuse

    I highly recommend purchasing a warranty for computers. I bought my Toshiba at Best Buy and had to turn it in to be fixed about 3 times. The warranty was $250. On the last repair, the "joints" where the screen folds up broke and I was told it would cost them too much to fix it, so I got a brand new computer (I just had to purchase another warranty). I got a new laptop that was the same price I bought my original one for, but since 2 years had passed, I got a lot of extras since every year more features are introduced and prices go down. I hated the fact that I had to buy another warranty for the replacement laptop, but so far, it's almost already paid for itself.

  • 51 Posted by egomero15 on Thu Sep 3, 2009 3:52PM EDT Report Abuse

    We have bought warranties for both our Canon Elph's from OfficeMax and were basically able to get a whole new camera after 2 years of getting the new one for only $50 extra. It was like trading in the new +$50 and getting a brand spankin' new one. We will continue to buy the extended warranty b/c this seems like an awesome deal to me.

  • 52 Posted by cheeky_brit_13 on Thu Sep 3, 2009 3:22PM EDT Report Abuse

    I work in retail and I definitely recommend getting Service Plans on items. Especially printers, laptops, Digital SLR Cameras. If there are accidental plans, don't turn those down. It would be insane to buy a laptop and not to have at least a 2 year accidental warranty on it. With Digital SLR camera's most have accidental, and will clean your lenses. And, I never hear enough about printers going to crap. So I would agree with the last comment. Take some time and think to yourself....

  • 53 Posted by johnnyboy0u812 on Thu Sep 3, 2009 4:39PM EDT Report Abuse

    Here is a tip...most HDTV's you will get a one year warranty. Buy it on your credit card. Most credit cards offer an extra year warranty. You get an extra year which costs you nothing :D

  • 54 Posted by jmr5104 on Thu Sep 3, 2009 4:37PM EDT Report Abuse

    I used to work for one of the major electronics retailers and used to see several upset customers EVERY DAY because their laptop/tv/ipod died and the manufacturer warranty doesn't cover wear and tear. I ALWAYS buy the extended service plan on portable items and TVs. Washer/dryer/cordless phone/stereo probably not. BTW, even if your product still works, you can get a tune up/upgrade before the service plan expires. No money wasted and keep it working good as new.

  • 55 Posted by globewyre on Thu Sep 3, 2009 4:10PM EDT Report Abuse

    If you want a warrenty. Shop around for one. Some warrenties let you buy a warrenty 90 days before the manufactures one expires. You do not have to buy it from the place you bought the electronic item. Compare prices with warrenties if you want one. Also check your credit cards for coverage.

  • 56 Posted by alfredogarciajr2004 on Thu Sep 3, 2009 2:50PM EDT Report Abuse

    I think they are well worth the cost. I had bought a Canon EOS Digital Rebel XT camera and when it broke on me, my warranty came in real handy. The camera broke right after teh manufactuer's warranty had expired. Was it worth the extra $150 added to the camera price...MOST CERTAINLY. The repair bill would have been in the hundreds!! I also just bought a Sony XBR5 52" HD LCD and you bet I got an extended warranty!! So I think the warranties are a good investment.

  • 57 Posted by fit1aspen2001 on Thu Sep 3, 2009 4:00PM EDT Report Abuse

    All I have to say is look up "the law of Merchantability" in the US Codes before you purchase your next extended warranty. It is the law!!! You may never buy another warranty for anything. The Law!!

  • 58 Posted by loststar383 on Thu Sep 3, 2009 6:57PM EDT Report Abuse

    Remember to read the fine print too! Extended warranties carry on after the manufacturer's warranty and usually cover the same stuff, but a service plan covers more and usually starts the day you purchase it. I bought a notebook from Best Buy 2 years ago and got a service plan. A year and a half after I got it the battery stopped holding a charge. I went to Best buy and they gave me a number to call and they replaced my battery and power cord using that plan. The manufacturer would have charged me $300 for both, the service plan was only about $150. I recommend SERVICE PLANS on Notebooks!

  • 59 Posted by dnhgry on Thu Sep 3, 2009 3:45PM EDT Report Abuse

    Don't even bother getting a warranty if you get anything from Best Buy...you might as well set fire to your money. Best Buy is notorius for not honoring their warranties. They lost my start up discs, power supply, and never repaired my laptop, and their attitude was...oh well, too bad. They have lost a customer for life. Oh, by the way, if you work at Best Buy save your soul and get a job with a company that has morals...Best Buy is just plain evil.

  • 60 Posted by kms250 on Thu Sep 3, 2009 4:52PM EDT Report Abuse

    The extended warranty is only worth it if it's a high-priced item and it would cost more money than an average repair cost to fix it should it break. For example I just purchased a Hard Disk/DVD Video recorder. About $400. Did I buy the extended warranty? No, because it the repair is over $200, the recorder will be toast. Now if I bought a front loading washer-dryer combo for $1800 then perhaps a $200-300 investment in an extended warranty would make sense because the cost of the item is much greater and the risk of not being able to use the item if it should break is much greater even if it's ultra-reliable.

  • 61 Posted by aznarrac31 on Thu Sep 3, 2009 3:00PM EDT Report Abuse

    I THINK EXTENDED WARRANTIES OR PROTECTION PLANS ARE WORTH THE MONEY DO TO THE FACT THAT THEY COVER STUFF THE MANUFACTURER WONT COVER. THEY WILL ONLY COVER NORMAL WEAR AND TEAR NOT ACCIDENT'S. THEY WILL ALWAYS GIVE YOU THE RUN A ROUND AND YOU WIND UP PAYING FOR THE SHIPPING AND HANDLING AND ALL THESE OTHER FEES THAT THERE WARRANTY WON'T COVER. TRUST ME I HAVE HAD VERY BAD EXPERIENCE. I ALWAYS BUY THE EXTENDED WARRANTIES IT IS DEFINETLY WORTH THE EXTRA MONEY. I BUY THEM ALL THE TIME AT OFFICE DEPOT, BEST BUY AND RADIO SHACK.I NEVER LISTEN TO CONSUMER REPORT I ALWAYS FOLLOW MY OWN ADVICE. CAMARAS TV'S ,CHAIRS TRUST ME IF YOU HAVE KIDS BUY THEM.

  • 62 Posted by scottpentzer on Thu Sep 3, 2009 9:08PM EDT Report Abuse

    I worked at Circuit City and guess where we made the most $$$ extended warranty...... Now its just salary but don't tell me that thats not where the store makes their cash...

  • 63 Posted by bonanie on Thu Sep 3, 2009 3:11PM EDT Report Abuse

    I purchased a HP laptop close to a year ago. Last week the motherboard died and it is being sent for repairs. While I am lucky enough to have 18 days left on my manufacturer's warrenty they are now pushing the extended warranty. If the motherboard is going out at not even a year, I am thinking it may be a good idea to get the extended warrenty, who knows what will happen in the next 12 months.

  • 64 Posted by evangelion883 on Thu Sep 3, 2009 3:56PM EDT Report Abuse

    Do not agree with this at all. I bought a laptop at Sony Style and Paid $100 for the extended warrenty that covered things the regular warrenty didnt. So like 3 months later I spill gatorade on my laptop's keyboard and sure enough by tomorrow its starting to act crazy. So I take to the store and get it repaired. Turns out repair total was some $700! I'd have to pay 7 times what I paid for the extended warrenty had I not bought it...

  • 65 Posted by thats_a_hoot on Thu Sep 3, 2009 10:02PM EDT Report Abuse

    It's the old addage, darned if you do ,,, darned if you don't. Like playing the lottery, don't expect to win if you don't play,,, don't expect to win if you do. Like religion, you won't get to heaven if you don't pray to Jesus. It's your choice.

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