I agree with not buying extended warranties, but I would suggest into looking at a service plan. If you go to Sears, they offer a plan called a Master Protection Agreement. They basically take care of everything the warranty will cover plus more. Your typical 1 year manufacture warranty is only going to cover defects on your new merchandise. At Sears, the maintainence plan adds peace of mind with things such as an annual preventative maintainence check. Once a year, a service tech will go to your home and tune up your new TV or appliance basically to the day you bought it. Fix anything before it breaks, and even take care of cosmetic damage that may have happened. That means, pulling out dents, adding some touch up paint on that new 2000 dollar Kenmore HE 5t steam washer and dryer you just bought. The plans either go 3 or 5 years depending on what you want. This doesn't mean that the new product is going to break down in 3 to 5 years, it means that 3 to 5 years down the line, your product is going to be working the same as the day it came out of the box and got plugged into your outlet at home. So yes, don't buy extended warranties, but do look into service plans before you make your final decission. There is a difference.

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IWhy would I want to purchase a service plan policy from Sears if they won't delivery the new TV and set it up on the TV stand, that I would also purchase with it? This suggests the lack of quality that Sears has reached these days.

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You are dead wrong about Extended Service Contracts! First of all a Warranty is given with what you are buying (and is built into the cost) and an Extended Service Contract is purchased over and above the product. And the reason that most OEM's only offer a 3/36,000 comprehensive warranty is because the rate of repairs increases drastically after that time period. Do you not remember the days of 7/70,000? And even in this time of economic crisis they are not changing the warranty coverage; rather they are lowering interest to 0%, because it is obviously more cost effective for them, not the comsumer! I have worked in the Automotive industry for over 20 years, and have yet to have a customer that needed a repair ever complain about non-coverage. There are fly by night companies out there that offer inexpensive contracts and don't actually cover what they say they will; however Factory Contracts are just as good (sometimes better) as what comes with a new car. So, do a little more research and get your facts straight before you start telling people to not cover the second largest investment they'll probably ever make!

Contr

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With regards to the comment on Sears extended warranties/service agreement, I have had several of them and could never get them honored properly. In each case they made activation difficult or some other caveat that made it not worth pursuing.

I finally ended up getting new products WITHOUT the extension because for durable goods it (usually) outlasts the extension anyway.

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Lisa,
I think your point needs refinement. For one thing, the article refers to extended warranties for non durable goods (i pods, cameras, TVs etc) which have a limited cost and limited lifespan by design. The only place where he mentions cars is regards to rustproofing and he give a justification as to why that is a bad idea (redundant, voiding the existing warranty).

Secondly, those extended car warranties are not all that great. They have lots of hidden "gotchas" like excluding parts of the car that would normally wear out anyway from extended coverage including parts that would be expensive to repair otherwise. The section on exclusions is longer that the actual warranty(!).

Finally, unless you have a good relationship with a particular dealer, they will kick you to the back of the line when it becomes time to collect on your warranty. It is no secret that "authorized" dealership service centers have the highest hourly labor rates and unless you have been using them all along they resent you coming to them to collect on the warranty.

I had an experience where a warrantied item failed, I went to the original dealership to get it fixed and was told " ...you have not come to me all along, go get the warranty work done where you get you car serviced at..." even though they were obligated to fix the item.

Granted, this last point is my personal experience but I wonder how many other car warranty holders have had a similar experience (obviously enough for some states to enact "lemon laws").

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The cell phone insurance to me is a must > I have a Biz account with 15 lines . it is not just for the phone if it breaks. mine covers lost, stolen, ran over, droped in toilet, water damaged, or just plan left where i dont knowwhere it is. I have had this account for 5 years and with all my employees it has more than paid for it self.

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I disagree with much of this article. Cell phone insurance is wise when you have teens with a more expensive phone. My Teen has a $300.00 V or some fancy phone. She lost it twice and dropped it in the bathtub once in a YEAR. I have more than benefitted from the insurance.
My older daughter started college 200 miles away. Dell offered an extended 3 year warranty ( Which covers spills etc) and phone technical help for $100.00. In addition this coverage supplies ON CAMPUS support , She does not have to wander around Maryland looking for a repair. Great Deal in my opinion..

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Evidently the guy who is recommending what you should buy or not buy has not had the experience of working with electronics. I have dealt first hand with helping customers who did not purchase the "extended warranty". Many of these times the cost to repair are actually more than if you had bought the plan in the first place. The comment about if anything is going to happen it will happen in the first year, that is totally wrong as well. I have dealt with customers who had problems within 1 year and as many as 2-4 years later.

As far as manufactures goes, I have seen them all...Sony, Samsung. Toshiba, HP, Gateway, etc... When you are dealing with electronics, you don't know what will happen or when. IIf you go to Best Buy they have several plans to protect you based on what kind of coverage you are looking for. Everything from standard coverage to "accidental damage" on cameras and computers, to "premium plans" on TV's that will include protection against plasma "burn in", burnt pixels on LCD's, a loaner TV should your TV have to be sent to service, a 14 day part guarantee, and a calibration on your television so you are actually watching your TV the way it should (not some disc that supposedly calibrates it for you...don't even get me started on that issue).

Did you also know that many of your manufactures will also offer an "extended warranty". Why is that? Because even they can not guarantee their product will never have problems. If so, they would offer a lifetime warranty...correct?

What consumers do not understand as well, is when you are dealing with the manufacturer you are usually dealing over the phone with someone vs in person at the store and most of the manufacturers will only cover normal wear and tear. What is "normal wear and tear"? Better read their fine print.

Some people will never buy because the Appliance, TV, or computer they have has lasted them 20 years and they don't believe in them. Or some people will say "my home owners insurance will pay for that". Better make sure you know what you are talking about. And TV's, computers, and Appliances are built a lot differently today than they were 20-30 years ago. How many friges, stoves, and washer and dryers had electronic displays and settings 20+ yrs ago compared to what they have now

I do agree with some things in the article. Especially with the rental car. I did check with my own insurance and I know I am covered any time I get a rental. But with regard to the "fuel option"., that depends on what you will be doing and how much driving. I recently rented a car for 5 days. I payed for the fuel option and it worked perfectly. The fuel was 23 cents cheaper than any gas station I found and by the end of the 5 days, I was between 1/4 of a tank and empty. Plus I didn't have to go find someplace on my way back to the airport that morning to fuel up.

All I say is keep an open mind and think about it and see if warranty or option is right for you. Are you ready to pay for that $200-$400 repair should something happen, or go buy that new electronic item if yours can not be fixed?

I guess that author should also tell people not to pay for car insurance or health insurance either huh? Hey, you have never been in a car accident or never been sick, so why pay for it? On some of those "warranties" you are paying for what is the monthly cost on that? Yes maybe you are paying $200-$550 up front, but over a 3-4 year period you are looking at about $11-$15 a month. How many of you are paying for health or car insurance for less than that?

I had to laugh at my sister-in law recently who had a freak accident and broke her laptop that she had only owned for about a year. I knew where she bought it from and asked if she got the "accidental damage" coverage on her laptop. She said "no" because she does not believe in them. So instead, she spent $300 to get her screen repaired and was without her computer for a couple of weeks. I had to laugh and tell her "I told you so" because had she got the accidental damage coverage like I had urged her to, she would not have had to pay any money out of pocket. I asked her if she had to do it over again would she had purchased it and she still said "no". Some people don't believe and never will and in today's economy, I'm sure all of you have lots of extra money laying around incase you have to go pay for that repair or replace your item.

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These people have some good points but two in particular that I don't agree with; the cell phone and car warranty. Especially due to a few personal experiences. First the cell phone insurance...it's a damn good idea! Out of all the things, our phones have more gagets and gismos than anything and we use and abuse them daily. I had my phone fall in the toilet and they replaced it with a new one in two days. All I payed was $50 instead of $300!!! Two months later the phone they shipped to me had a faulty screen...and guess what?... they covered it also at no additional charge. Once again another new phone in two days. So I have gotten my moneys worth already. Second, I bought a new car, Acura, and bought the extended warranty. I have about 51,000 miles on my car and my navigation unit went bad. If I did not get that warranty I would have been stuck with a $2600 repair bill! Not to mention I'm only less than 1000 miles out of original factory warranty. So I'm sure I will need to use this again in the next 49,000 miles. And I don't mind because I will not have to worry about any out of pocket expenses! So to the people reading these advice colums, it's good to be forwarned that you potentially might not need to use warranties, but when you do, who's the one that will have to pay the bill and suffer through the inconvience...the people that told you not to get a warranty or you?

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This article has some very glaring errors about two things I'm pretty experienced with. I am a manager in a leading electronics retailer, and I can tell you with absolute certainty that the writers of this article did not do their research on wireless phone insurance or extended service plans.

Wireless insurance programs are expensive, however the largest difference between them and a service plan offered by a retailler and the standard warranty coverage is that they cover accidental damage, such as physical abuse, water damage and even loss or theft. As of the time of this article all three major wireless providers in America charge a $5/month fee with a $50 fee when you need to replace the phone. AT&T covers almost phone for one year automatically, the other providers might as well. The key difference here is that if you have water damage or physical damage (the leading two causes of phone failure) the first year coverage is voided, however if you have your insurance you can replace the phone for $50. The authors of the article mentioned that you might have gotten the phone for free or considerably less than $50. However what most consumers fail to realize is that most wireless phones cost over 2-3 hundred dollars retail. Meaning if you needed to replace something common like a Motorola RAZR when they were brand new, it would have cost you over $300 cash to buy it "outright". When you agree to a contract with the wireless provider they dramatically discount this merchandise, this is because the cost of the unit is rolled into the subscription costs of the service. So when you think about paying $60 a year and $50 per replacement for something that is worth 2-3 hundred dollars for a standard phone, and 4-6 hundred dollars for a pda/smartphone, you start to see the value.

In regards to service plans offered by retailers (service plan being a key distinction from extended warranty), you really have to read the fine print. I don't recomend a service agreement on something like a digital storage device, flash drive etc. But I more than reccomend it on products like an IPod. With good reason! If you have a product serviced by the OEM (original equipment manufacturer) warranty, very often you pay the cost of shipping it to and from the manufacturer, and it often can take weeks at a time. My previous example of an IPod costs approx $125 after shipping and service fees to have the battery replaced by Apple, most retailler's service plans cover it for less than a third of that cost.

In conclusion, don't always believe what you read. Some authors are fond of making gross over generalizations such as this to catch eyes, and they are really doing the readers a major dissservice. Ultimetly, do your research and find out if the cost of a service agreement or an insurance option will be worth it in the end.

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The article was well written and contained good advice. While you will also hear horror stories regarding perils of not purchasing extended warranties, they are exceptions, rather than the rule.

The vast majority of electronics sold, with or without extended warranties or service contracts, do not experience problems. Think about it, if that were not the case, those companies would not be in business.

Yes, a small percentage of folks will realize a savings, however most folks will learn that the "peace of mind" the salesman pitched was nothing more than a direct contribution straight to the company bottom line, plus a fat commission for the salesperson.

As with any purchase, Caveat Emptor!

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I purchased the service agreement on my projection tv and paid less for it than I would have for the new bulb that needed to be installed and still have time on the contract! I also purchased a protection plan for my daughters zune for $30 and have used it to totally replace the zune! I am a believer!!

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I agree that it's a very good idea to get the Apple extended warranty. Last year the power supply went out on my older iMac and when the Apple store was not able to fix it, they replaced my computer with a brand new Intel version. I not only got a new computer but also the latest software, the ability to run Windows on a Mac, more RAM, a faster hard drive and more space for no extra charge. I also got money back from my first extended warranty I paid on the older iMac for time not used (within the full 3 years). Even if one's computer doesn't need replacing, the fact that Apple can be called at anytime and kept on the phone for long periods of time for troubleshooting help, to get questions answered and to basically get a free education regarding one's computer from real friendly people is worth the fee for the 3-year warranty. This warranty also covers the need to bring one's computer into a store for servicing and any parts needed, including a new keyboard and mouse. I will gladly pay that small fee for every Apple computer I ever own. It's really worth it!

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Re: extended warranties, there are several independent variables to keep in mind, and you should think about them and make a decision BEFORE you go into the store. Two are cost and use. The more a product costs, the more likely that you will benefit from an extended warraanty. The more use the product will get the more likely that you will benefit from an extended warranty. For example, if you are a couple with no children living in the city and you buy a clothes washer, you don't need an extended warranty. If you are a couple with three young children living in a suburb, you should should consider buying an extended warranty on the washer. Also, what is you comfort level? You might be the type of person who is more comfortable with extended coverage and is willing to pay for that reassurance. There's nothing wrong with that even if it is not a good economic decision. Is it easier to pay for the warranty now, probably on credit, than take the chance of a hit on your budget later with a big repair bill? What is the normal life of the product, the replacement cost, the average frequency of repairs? Be an informed consumer and you won't get taken advantage of. If you get surprised by the warranty question at the check out counter or when signing the sales invoice, you put yourself on that situation.

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I can tell you the IPOD coverage was well worth the price for me. I'm a health care provider in the Army and bought my first IPOD right before I deployed to Iraq. I don't know how many times I dropped that thing in the sand, but it finally broke, thankfully after my deployment ended (and it was one year after I purchased it, meaning the manufactuor's warranty had expired). I got a new one in less than a week because I had purchased Circuit City's protection plan (it cost $80 dollars and I spent over $350 on my IPOD..it was the 40Gig one that could play movies and in my opinion worth to take to Iraq where TV was limited). I eventually upgrade to the 80Gig IPOD that cost close to $450 and paid the extra $80 and gave the new I had just replaced to my daughter. Wouldn't you know it, within 6 months I had a problem with the new one and had to return it, but I got the replacement for free. No shipping costs or anything...all I had to go was go to Circuit City's Web site, enter my sales reciept code, and print the shipping label. In my experience, it was well worth it to buy the protection plan. I recommend for all the deployed troops to get it, because the environment in Iraq and Afghanistan is hard on mobile media devices. Just something to think about.

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I disagree regarding rental car insurance, I ALWAYS get it. Learned my lesson when I parked a rental car in a lot in Virginia; while I was away the next to me caught on fire and severely damaged the rental. After that, Visa told me they only cover 'secondary' expenses and the majority of the claim went through my insurance..which did cover it BUT then my rates went up! Plus all the hassle of dealing with the rental company, the fire marshall, faxes, emails, phone calls, etc etc.

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