When you purchase new electronics or appliances, chances are the salesperson will encourage you to buy an extended warranty to go with it.
But consumers have other options for protecting their investment besides purchasing an extended warranty:
- Homeowner’s insurance may cover some purchases. If you’re buying an expensive piece of equipment, you might be able to add it to your homeowner’s policy for less than the cost of an extended warranty.
- If you’re paying with a credit card, check to see if the creditor offers additional protection. Many card companies will double the manufacturer’s warranty if you use their card, but you have to read the fine print and compare what you get and what you must do to redeem the warranty. Some cards require specific documentation before honoring warranties, so hang onto your receipts and manufacturer’s warranty information.
- Some manufacturers have longer and better factory warranties than others, so check out the terms first. You might decide to go with Product B over Product A because Product B has a 12 month parts and labor warranty, compared to 90 days for Product A.
- Different retailers offer different plans; some even offer free extended warranties. You might pay $100 for an extended warranty at one store and find a similar plan at another store for $50. Also, don’t feel pressured to make a decision at the time of purchase. Most extended warranties can be purchased any time before the manufacturer’s coverage ends, giving you a chance to try the item out and determine how well it works and the potential for a defect. If you send in the original warranty card, many manufacturers will contact you about extending the coverage before it expires.
- Read the fine print. Do you have to send the product off for repair or will it be fixed in your home? If you have to take the item to a repair center, is there an authorized center in your area? One Angie’s List member in Cleveland found out he would have to drive an hour to Akron to have his item repaired under the extended warranty. Also, ask your salesperson what happens to the warranty if the store goes out of business.
- Your manufacturer’s warranty is free, so avoid paying for extended warranties that start from the date of purchase instead of at the end of the factory coverage. Of the poll respondents who used their warranty, nearly 75 percent said they needed service within the first two years. Also, most extended warranties do not cover accidental damage, so if you’re worried about breaking your laptop screen, additional protection might not matter. Consider your homeowner’s policy for coverage of accidental damage.
- Do your homework and ask yourself some questions before you buy, like; how has this product type performed in the past? Do you have the financial means to repair or replace the item if it breaks? Would you be more likely to purchase a new unit if this one breaks or would you pay to have it repaired? Can you wait for the repair to be made or is this an item you can’t live without? How quickly will the technology change and will you be ready to upgrade by the time this one wears out?