Are Extended Warranties Necessary?

Thu Jul 13, 2006 6:20AM EDT

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Reader wants to know: "I have a question about computer extended warranty. Yesterday I just purchased a HP Slimline Pentium M with one year limited warranty from HP. In general, do people buy the extended warranty from the store they buy from? The extended warranty (which is 3 years) cost more than 1/3 of the purchase price. Please advise. Thank you."

Personally, I had a horrible experience with a recent purchase that has taught me to buy the extended warranty on items that I expect to have around at least three to five years from the time of purchase.

A few years ago, we bought an LCoS Projection TV. We spent weeks doing the research and visited an electronics store almost everyday to compare picture quality before plunking down a few thousand dollars. We loved our television, and were happy with our purchase until dust circles started to appear at the bottom of the screen seven months later. We got it fixed while it was under warranty. Everything was fine until five months later, the same thing happened again. This time the dust circles multiplied faster than before. Long story short, the extended warranty allowed us to get a replacement TV.

On the other hand, a friend of ours liked our LCoS so much, he got one at the same time we did. He had the same problem with the dust circles. Problem is, he never got the extended warranty.

Consumer Reports found that extended warranties cost less than the average repair. Their data shows that electronic products are unlikely to need repairs within the first three years, yet a laptop and desktop PC had the highest odds of needing a repair within the first three years followed by treadmills/elliptical trainers, and plasma televisions. When it came to laptops, they recommend that "consumers consider buying an extended warranty from the manufacturer, not the retailer. The manufacturer’s extended warranty also allows for continued access to tech support."

My recommendation is to get an extended warranty on technology that is still fairly new. The LCOS TV mentioned above is a good example, as well as the new MacBook Pro notebooks. These laptops have been having a few problems of their own. You should also check online to find out if there are any recurring problems with the item you're about to purchase or have already purchased to get an idea of the type of problems you could encounter. If you pay with a credit card, find out if you are eligible for extended warranty from the manufacturer. Visa's has a program called Warranty Manager Service, while Mastercard and American Express have more information online. PC World has a more extensive look at extended warranties and offers these extended warranty pointers.

But what do Yahoo! consumers think? Share your experience and advice on extended warranties in the section below.

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Comments on Are Extended Warranties Necessary?

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  • 1 Posted by bharchar on Thu Sep 3, 2009 3:06PM EDT Report Abuse

    I agree on the new HD TV warranties, I am in the tech field and I see all sorts of troubles. I too have a friend who has trouble with his LCD TV. The pixels burned out leaving little red dots all over his screen. Yes he has an extended warranty..but Make sure you check to see how many pixels have to go before it can be replaced... his is 10 pixels..right now he is at 8 and it is really annoying to watch a bright sequence and see little red dots...especially after shelling out 3-4 grand. I personally do not get PC/Laptop warranties because I can fix most problems myself..Computers are getting easier to repair...so they tend to last a while longer with a little TLC. parts are not to bad anyway...so most repairs can be done under $50. The biggest one for problems is printers and scanners... if you only saw how they are "tossed" around at the big box stores while off-loading a truck... that would make you buy the $25 warranty right there!

  • 2 Posted by intelligent_guy008 on Thu Sep 3, 2009 4:24PM EDT Report Abuse

    Like any other commerically written blog/advise, this advise is tipped in favor of manufacturers. Internet is full of user forums, where you can find information about performance of any product. Instead of buying extended warranties and paying with arm and leg, its better to search user forums and review websites and get idea of general quality of the product. In my opinion this answer is NOT honest and is doing favor to those selling extended warranties...

  • 3 Posted by craig_and_dog on Thu Sep 3, 2009 3:30PM EDT Report Abuse

    If the manufacturers did not make money on the extended warrenties, they would not offer them. Mechanical devices seem to be the most prone to failure, folowed by new technology, but unless the replacement cost is prohibative over three years, I say forget it. Products are obsoleted so quickly, that the one year warranty is usually about 1/2 the life of most products.

  • 4 Posted by danolen_99 on Thu Sep 3, 2009 3:35PM EDT Report Abuse

    My background in technologies goes back to 1971 as an Avionics Repairman in the Army. All tube gear. I then went to work for Atari while they were still shipping "Pong". No, not the home version. Others included, Intel, Televideo, Seagate, Basic Tymesharing Inc., SUN Microsystems, Dawn VME Products, SKY computers and several 1099 clients doing custom projects. Now that I've qualified, (I retired at 45), terms are being thrown around with numerous definitions, i.e., "obsolete". If your only doing word processing, an Intel 8086 at 25 mhz will do you just fine. But, if your doing vector processing with 32 bit floating point operands benchmarked at 20 MFLOPS / sec. that runs "statically" at the same speed as the first Cray Supercomputer, you'll need an Intel 80386 to do 2048 point benchmark testing. Now lets get to the question, do you need an extended warranty? If your using a PC for personal reasons, no. Just backup your system at regular intervals. If your running a business, yes! And still backup your data across the entire network. Workstations will run for five years usually before problems arise, provided preventive maintenance is performed which includes an enterprise wide antivirus program and anti-malware s/w. Dirt and heat are two of your biggest enemies and always run with the "BIG Boys" for products and services. Also, if you live in the southwest watchout for static discharging this time of year, (very dry to rainy environments). In 1978, AT&T Bell Labs published a list of items most likely to fail. This list started with power hungry item, (Power supplies, rectifiers, monitors,memory chips) to bus transceivers and electromechanical devices, i.e., disk drives, printers, fax machines, etc. You need to discern what percentage of your system is high risk vs. low risk. Also, as mentioned earlier, don't jump on the newest gizmo out there. Microsoft has the largest unpaid workforce in the world by supplying Beta versions of its deliverables and letting other debug there problems. The same is true of the automotive industry. All new technologies are road tested in Cadillacs and Lincolns. Why, the buyer isn't cash strapped to raise much of a stink about the problem and magazine publications award "Best Of Class" awards to whoever is spending the most on advertising. Very few engineers will buy the first edition of anything if it's for there own personal use. There is such a thing as a "Life Cycle" test that needs to be performed and that takes time and usage. Finally, there is no easy answer to your question. Can you afford $70/hr labor rates plus parts that are heavily margined? (Parts on new technologies are rare, because thay use them in the final product first). Is the extended warranty being offered by the manufacturer or by a third party that collects a percentage? What is the turn around time for repairs and who pays for shipping? Local service or long distance?Buy 2 older systems that work with your s/w and OS and keep them on hold.

  • 5 Posted by chetan_kaushal on Thu Sep 3, 2009 3:22PM EDT Report Abuse

    i worked for dell for 2 years and for computer retail store for one year in sales dept...& as a sales person what i know is extended warrenties are waste of money. if you have extra money to spend buy it.otherwise its not worth it.In most of the cases ,the problems with the computer is virus/spyware in general software issues and non of the warrenties(manufacture or extended warrenties covers it).so why buy it.I am using my celeron computer from last 4 years and i never had any hardware problem...!the only thing i do to take care of my computer is turn it off when i am not using it.thats the key for me...i have around 20 friends who do the same think and there computer is running like honda cars run.

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