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Hardware

Do You Buy Extended Warranties? 200

Posted by Cliff from the should-you-spend-the-extra-cash dept.
Stackdump asks: "I am a college student (senior seeking CS BS). I work partime at Best Buy selling computers (arg!). To be truthful I don't really sell computers; I sell what we call 'performance service plans' or PSP's for short. This is the somewhat gimmicky name given to Best Buy's extended warranties. To be fair they do actually provide some service in the store, swapping HDs, CDROMs, and so forth, but most of the hardcore repairs are done elsewhere or by the manufacturer. Prices range from $99 on the cheapest tower to $249 on laptops over $1000. Terms of service are pretty simple everything is covered against power surge, dust contamination, whatever... BUT abuse is not covered: so slam a pencil in your laptop and say byebye, but fry your computer because you don't have a surge protector and you can get a new one. As this is the central pre-occupation of my work day I ask the Slashdot community this: do you feel these warranties are really worth the money?"
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Do You Buy Extended Warranties? More

Do You Buy Extended Warranties?

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  • Warrenties... (Score:5, Insightful)

    by routerwhore ( 552333 ) on Monday March 24, 2003 @10:22PM (#5588182) Homepage
    No, they aren't worth it. They are a tremendous profit margin for Best Buy, which is why you even get a commission (which you failed to mention) for selling them. The high pressure sales tactics some people employ to push these things thoroughly sours my shopping experience in what should be the equivelant of my toy store. They are much like rebates, they are great for the vendor because people usually don't collect on the value they purchased. It's all a statistical formula at the end of the day. It does appeal to a specific market segment and demand, or else no one would buy them.

    • Re:Warrenties... (Score:5, Interesting)

      by handsomepete ( 561396 ) on Monday March 24, 2003 @10:36PM (#5588283) Journal
      After working a full 10 days at Best Buy in the same position (and quitting in disgust at how it was to work there), I can proudly say that we did not, in fact, get any sort of commission for those asinine service plans. Actually, it seemed my employment was dependent on selling them, but there were no obvious positive insentives for me to sell them whatsoever. I don't know if the policy has changed, but we were required to say something like, "I'll be honest with you since I don't get commission from these sales."

      I would also like to take this opportunity to say that my 'boss' there, Justin who was 4 years younger than me and knew next to nothing about computers except that '3dfx rocks, dude', was a dick. Hi Justin!

      • Re:Warrenties... (Score:2, Insightful)

        by spike2131 ( 468840 )
        I don't know if the policy has changed, but we were required to say something like, "I'll be honest with you since I don't get commission from these sales."

        Why is it salesmen always use the line "I'll be honest with you..."?

        You know, if you are about to get my business, you dam well better be honest with me. A line like this only throws up a big, blinking red flag that maybe all along you've been feeding me a whole line of bull.

    • Re:Warrenties... (Score:5, Insightful)

      by illusion_2K ( 187951 ) <slashdot@nosPAm.dissolve.ca> on Monday March 24, 2003 @11:06PM (#5588462) Homepage

      Normally I'd agree with you wholeheartedly, and I never purchase them myself on things like TV's, diskmen, etc... However, the one exception that I think is notible here is on laptops. On the first laptop that I purchased for myself (about four years ago), I was able to have it replaced for an albeit kinda crappy newer laptop, but when the motherboard died on my older one I was very happy to know that I wasn't 'up the creek.' Especially since I bought the laptop for university.

      This summer I think I'll upgrade to a 12 inch TiBook and will likely purchase AppleCare along with it. From what I hear, it's a worthwhile investment.

      • Just buy a Toshiba, 3 year standard warranty, covers everything but abuse. By the time that waranty runs out you'll probably want a new one anyways.
      • AppleCare does not cover abuse. I droped my ibook and called them up to see if applecare would cover it. nope.

        AppleCare only covers manufacture defects.
    • I agree with you, with one exception : cell phones.

      Cell phones are flimsy, cheap plastic fragile toys that are hideously complex and impossible for just about anybody here to repair on their own at home - for all practical purposes they are magic. Expensive magic, if you try to buy one without a year plan with a service provider.

      Yes they have a warranty, but you have to mail it to the factory and wait weeks for the repair or replacement - but on a $200 phone (really more like $400 or $500 but you get a p
      • Hehe, you can normally get the phone repaired for free or a loaner while yours is at the factory. My dad is a salesman with 2 different phones with 2 different companies (one is unlimited local the other has huge minutes of long distance, he lives in his car and his average consumption is probably 5,000 minutes a month) and one weekend he dropped both of them into seperate rivers! One he fixed on his own by drying it in a preheated oven (preheat to 200, turn off and place phone for 30 minutes) the other he

  • Never buy an extended warranty (Score:4, Insightful)

    by mbstone ( 457308 ) on Monday March 24, 2003 @10:28PM (#5588227)
    They are a scam. Salespeople are under incredible pressure to sell them -- try telling the salesperson you don't want one! They will beg and plead with you and ask you "why" -- they have to put down a reason. Say, "I just don't want one." They will go nuts. The so-called "extended warranty" is way overpriced and full of loopholes and exclusions. They are a major profit center for the big consumer electronics chains of this world. Most products already come with manufacturers' warranties -- the product will either fail within the original mfr's warranty period or it will outlast the "extended" period. And if someone dumb, like your grandma, buys an "extended warranty," good luck finding the sales receipt or other information -- most of us aren't that well organized.
    • My wife and I ended up walking out of Circuit City a couple of years ago over this extended warranty for a new Sony digital video camera we were trying to purchase. I explained to the salesman I didn't want it, then his boss, then the store manager. I finally asked if it was more important they sell the camera without a warranty or not sell anything at all. None of them had an answer, so we walked and I ordered the same model from Crutchfield that night. They lost a very expensive sale of a camera becau
      • Incredible as it sounds, the manager probably didn't want you to buy the product unless you got the extended warranty. Some of the big retail chains had extreme "incentive" programs that pressured the sales people to sell at least X% of their products with extended warranties.

        So begins the law of unintended consequences. If the employee can't increase the numerator (number of warranties sold) they figure they need to reduce the denominator (total sales) to make their percentage!

        I say "had" because by this
        • I bought a Sony PC from Circuit City a few years ago, and the salesguy would absolutely not let me have it without the warranty. After about five minutes of arguing about it, he finally told me to call back next week and say that I'd found it somewhere else at a lower price (say the amount of the warranty...), and he'd give me a refund for the difference.

          There was no way in hell I'd find a better price (it was a discontinued line, and the Sony tech support ppl wouldn't believe me when I said I'd gotten i

      • You don't have to tell the truth to get those guys off your back. I bought a laptop for my wife at Best Buy. The guy insisted that I needed the warranty. I told him I didn't and when he asked why I told him that I was very very wealthy, and I was buying this laptop to throw it out of my car window on the freeway, because that's what I do on Monday afternoon.

      • The salesman told us that DV cameras were very delicate and needed to be professionally cleaned twice a year at a cost of nearly $100/year just for cleaning.

        When I bought a CD player for my car at Best Buy, the salesman and the person who installed it both insisted that I get the warranty since CD players required the laser to be re-aligned once a year. When I bought a microwave from Sears, the salesman pushing the warranty pointed to the plastic ring under the turntable and told me that it would cost $7
      • do you feel you tought them a lesson by walking out? do you think they wered upset that they lost the sale? or do you think that they laughed at you later on?

        the truth is, in the warranty selling position they'd rather not sell anything, then sell something without a warranty.

        at my store which is not best buy, if you bring an electronic item back on the 15th day, one past the return policy, with no warranty on it, you just wasted a trip. if its under warrant (at our store there is no in store service) we
      • I find this hard to believe. In what way were they forcing you to buy the extended warranty? Did they handcuff you? Hold your credit card? What?
    • 99% of the time I would agree, especially with in store warantees like best buy. But I got my dell
      laptop almost 3 years ago now.. paid over 2200$ for it. Well 3 years later it is still going strong because I bought the extended warantee for 250$. It was worth every penny.. dell covers everything.. even if you run it over with your car. They have replaced every single piece of plastic on it twice over, replaced the screen twice, keyboard/mouse twice, and motherboard once. I will definitly buy that warantee a
      • Overall, they have to collect more than they pay out. If it was a good deal, they wouldn't be selling it, because they'd lose money. Also, the store has to get a good markup on it or they wouldn't push it so hard, so in addition to being a bad deal at wholesale, at retail it must be even worse. You're looking at like 10% in voluntary fees.

        They can be hard to collect on. I've had difficulties getting things repaired. In fact, I was told that I was lucky that the (boss's IBM laptop) machine was still under t
      • Heh, if you have had to replace every piece of exterior trim, 2 screens, and a mobo, perhaps you should buy another Dell Warranty but stay clear of actual Dells. ;-)

        Only kidding, love Dells myself. We get the next day on-site here at work for our laptops just so we never have one knackered for very long, but at the consumer level I doubt they are worth it.
    • It's a bit different at Future Shop. Extended warranty for a cell phone is $30.00 for 2 years. You can lose the paperwork - they have a copy on computer, along w. your phone's id, etc. Just give them your name.

      And the friends I've had who've had problems just walk in, give them the old device (dvd player/vcr/palmtop/whatever) and walk out with a new one.

      They gave me a $50 in-store rebate, on top of the carrier's $100 rebate, so I actually ended up paying less than nothing for the warranty.

  • You probably don't need one for your TV or stereo system (even though you get free speaker tweaking or whatever). These things are cheap enough and don't move around enough to face actual dangers. Also, if there's going to be a problem, it will be usually right away when those problems crop up, well under the normal 30-day guarantee most shops provide.

    But for other things like laptops, cameras, and other things that move around all the time to environments that differ in humidity, pressure, electrical st
  • However, I did buy the PSP for a Palm M105. After about 8 months though the battery cover clasp broke and they sent me a "gift certificate" for the cost of the Palm when I originally purchased it. WooHoo!!

    I used that to purchase a Sharp Zaurus on clearance. I didn't buy a PSP for that though because by that time I hadn't had a real job for over a year and a half and was broke :(

    -Brent

  • Do the Math (Score:5, Insightful)

    by bill_mcgonigle ( 4333 ) on Monday March 24, 2003 @10:36PM (#5588281) Homepage Journal
    Best Buy wouldn't sell these if they didn't make money on them. If they're making money on them they pay out less than they collect. Therefore, over the term of the warranty, you're less likely to receive the money you paid for the warranty back in terms of repair cost than not.

    So if it's not a good economic proposition to buy a warranty (insurance), why does anybody do it? Well, on a house or a car, you can't afford to cover the cost of a loss, or a lawsuit (auto liability). If your house burns down, you can't afford to just buy a new house, but if you really could it wouldn't make sense to pay homeowners' insurance because the odds that your house will ever burn down are really low.

    With a computer, or a TV you can usually afford to cover the cost of a loss, so, the odds are in your favor to not buy the warranty.

    That said, Staples offers a nice warranty - any problems whatsoever and you get a Staples cash card for the original purchase price of the item, no questions asked (I even read the fine print). So, on my $89 Palm I paid $10 for the warranty, since it might malfunction by time I need to upgrade. ;)
    • The one time I bought an extended warrantee, it was at Staples. Never even bothered to activated it. Turns out that within the manufacturer's warrantee, you have to go through the manufacturer... their warrantee only kicks in after that expires.

      This particular item was a palm keyboard. I figured that the PDA would be obsolete within the life of the extended warrantee, so I could get a new one that would work with the newer model. I had a history of them breaking before, so... I figured I would use it.
  • This is the stupidest Ask Slashdot I've seen in a while (excluding those posted by timothy).
  • Whenever I get one of these pitches, I generally respond with, "If you think it needs that kind of warranty, maybe I shouldn't buy it to begin with. You think maybe I should just put it back?"

  • Hell No (Score:5, Interesting)

    by Ratbert42 ( 452340 ) on Monday March 24, 2003 @10:39PM (#5588301)
    I almost bought one on a digital camcorder, particularly because the saleskid said it would be covered if it got dropped, got wet, etc. But when I read the policy before checking out, almost everything he said was wrong. Almost nothing was covered. Now I never buy them.
  • You're saying a warranty on a $1k laptop costs about $250. Ignoring risk aversion, the warranty price would be fair if you had a 25% probability of completely breaking your laptop (1k*0.25=250), or 50%probability of $500 damage (0.5K*.5=250), and so on..

    Factor in some risk aversion and you can somewhat lower those probabilities, but it seems to me that your assessment of the probabilities of breaking your stuff would have to be pretty high in order for the warranty to be worth its money. Or, your risk aver

    • You're saying a warranty on a $1k laptop costs about $250. Ignoring risk aversion, the warranty price would be fair if you had a 25% probability of completely breaking your laptop (1k*0.25=250), or 50%probability of $500 damage (0.5K*.5=250), and so on..

      Factor in some risk aversion and you can somewhat lower those probabilities, but it seems to me that your assessment of the probabilities of breaking your stuff would have to be pretty high in order for the warranty to be worth its money. Or, your risk av

    • I'm doing sums a little like this for an extended warranty (one year goes to three) on my iBook at the moment and am beginning to think it's worth it. Three reasons:

      1, The battery *will* shit it within the three year period therefore the warranty comes with a free new battery.
      2, I have to straight line depreciate it over three years anyway, it somehow seems sensible to have cover over that period.
      3, I broke the K key off after I had it for two weeks. Was fixed the next day. This was a major relief.

      Dave
  • It really depends upon the product you're buying...

    Recently, I brought a printer and scanner. The CompUSA salesman convinced me to buy a warranty on the printer, and I must say that I do believe that it was a smart choice, as it was only $25 - $10 rebate with the purchase of ink (which I was going to do anyway). You see, devices such as printers are more prone to failure than others, and a carry-in replacment plan is definitely a plus (and a steal at $15).

    However, for more expensive devices such as comp
    • Confession: I'm much smarter than I was at the time of this story, but the principle's the same.

      Back in 1994, I worked for 6 weeks at Computer City, a chain of stores owned by Tandy, the same folks who own Radio Shack. I worked there for a number of reasons, one of which was to learn a bit more about computers. (And I actually did: seeing everything that Computer City had, made me realize at the time that I knew a lot less about computers than I thought I did; the store taught me nothing except how to clo
      • I thought the early Mac's did use a scsi interface to their printer. Maybe wrong, but I seem to remember something along those lines.

  • Extended Warrenty is is good w/ employee discount (Score:3, Interesting)

    by Thauma ( 35771 ) on Monday March 24, 2003 @10:44PM (#5588330)
    As a past employee now free of the beast [bestbuysux.org]. I find that the extended warranties I bought while working there are great! Of course factor in that you get the product at 5% over cost and the PSP or PRP plan is discounted 90%.

    I have had my cell phone "break" about 5 times now over 2 years to get a full replacement each time.

    Also these things will cover your laptop battery for years. Consider the cost of a replacement battery (for most laptops this is the same as the cost of the PSP) its an insanely great deal.

    Over all, I figure I have cost BestBuy about twice as much as they ever paid me :) Would I buy anything from them with one of these deals without the discount? Hell No!

  • Paying $30 for 3 years of protection on a $100 appliance probably doesn't meet the cost/benefit ratio for most people. At the end of the 3 years, you'd probably would have bought a new version of the $100 item.

    Paying $300 for 3 years of protection on a $3,000 device could make sense, depending on the device.
    Some devices don't hit the obsolecence curve as rapidly as PC's...

    I think the extended warranties just recover the profits lost by businesses to smaller profit margins. For customers that want to hav

  • Get it (Score:2, Interesting)

    by liquidice5 ( 570814 )
    I have gotten the warranty on almost everything i have bought @ circuit City, and it has been worth it every time.

    My desktop computer - Warranty cost = $149
    Replaced HD - (got a bigger one for free)
    Replaced CD drive (got a faster one)
    Replaced Monitor (got a better one)

    My Laptop - $199
    Replaced HD (dropped it)
    Replaced DVD
    Replaced Monitor Port on back (got bunged up)
    still got time left
    and the video card is gonna fry soon so... (contact me if u have any exp for why my compaq 1700XL 265 screen would turn white
    • > contact me if u have any exp for why my compaq
      > 1700XL 265 screen would turn white and not go back
      > till it cools off

      Over-zealous backlight? It may seriously be something with the screen or it's controller, not the video card. You should have it fixed regardless of the cause :)
  • For replacement (i.e. destruction or loss) I've yet see an extended warranty that decent homeowner's/renter's insurance wouldn't equal or beat. Sure, insurance plans have deductibles while the extended warranties generally do not, but think of the extended warranty premium as your deductible.

    For repair these can be useful for extending the warranty term beyond the original manufacturer's limit, but even then some insurance will help you. Frankly, in our little consumer orgy of an economic system, most

  • Of Course Theyr'e Not Worth It (To The Customer) (Score:3, Interesting)

    by TheWanderingHermit ( 513872 ) on Monday March 24, 2003 @11:07PM (#5588470)
    First, let me preface this with a disclaimer: A large part of my family's stock portfolio is in Best Buy, so I'm biased toward the store.

    Having said that, of course they're not worth it, and simple math should show you that. If it were worth it for the customer, a product of this type would not make a profit for the store and they wouldn't be pusing them so hard.

    If I spend $100 on an extended warranty (whatever it's called), and get $100 in parts for it, the store doesn't make money. They make a profit because the products are generally reliable and only a tiny fraction of these extended warranties. It's the same as insurance -- you pay huge bucks for insurance and if you ever file a claim, they either drop you or up your premium to help pay for what they've spent. In theory, you're paying them to take care of you if you ever need it. As long as you're paying in and not taking out, they make money.

    As long as most customers that buy extended warranties don't file claims, the store makes a huge profit. You can bet that if a particular product were unstable and not reliable and everyone who bought an extended warranty on it filed a claim, they'd stop offering the e.w. on that product because it would no longer be profitable.

    On the other hand, if you're Joe User and have a life (instead of spending it all mucking w/ 'puters), there is the benefit of not having to worry about replacing parts.

  • I bought one (Score:4, Interesting)

    by Nutcase ( 86887 ) on Monday March 24, 2003 @11:17PM (#5588518) Homepage Journal
    I purchased one on a few things... sometimes, if you use them, they make sense.

    For example, I purchased a handspring visor prism and paid 80$ for a warranty. 1.5 years later, the battery ceased holding a charge. I took it back to my local best buy, and they took it back, and gave me credit for 450$ towards a new handheld. When i picked the sony clie 615c, they rang it up as 450$ instead of 350$, so that I would have the full amount of credit if it ever went bad. I havent had to use that yet, but wouldnt hesitate if i had a problem. It was a completely painless experience.

    In fact, it prompted me to spend the money on a plan for my digital camera, because it also covers the batteries and such. So in a year, when the 100$ battery stops charging fully, i can just swap for a new one... all because of a $30 up front plan.

    In some cases it doesnt make sense. But in the case of smaller things where some essential component cant be cheaply replaced (i.e. batteries in pdas, digitizers, lenses, etc) it makes a ton of sense... and if you ever need it, they essentially throw in an upgrade for free.

    Not a bad deal really.
    • I second that. PDA's are certainly worth buying a protection plan, especially when Palm's warranty isn't that long. I bought a palm m500 unit at Best Buy and the sales guy pretty much told me that getting an extended warranty for the palm is probably the only item he personally recommends to people (the plan was $60, unit was $300). Sure enough, the digitizer fried on it about a year later. Being the m500 was now discontinued, they gave me a Palm m515 as a replacement (with a $20 replacement fee). Heh,
  • On expensive portable items, if you plan to use them a lot. I've already ruined one keyboard on my laptop, and was happy to not pay $300 (or so) to have it fixed. Same thing with my phone. My Motorola V-BOX [slashdot.org] POS finally busted a few months ago and they were happy to replace it with a Nokia 8390 [slashdot.org]. And then the power button on that busted, so I got a third phone (which I had to unlock manually because Rogers [rogers.com] are stupid).

    I doubt I'd get coverage like that without a warranty.

    Anything else is probably a wast

  • Obvious Simpsons quote: (Score:5, Funny)

    by toastyman ( 23954 ) <toasty@dragondata.com> on Monday March 24, 2003 @11:30PM (#5588572) Homepage
    After removing a crayon wedged in his brain, Homer finds himself a genius. A miserable genius. He goes to Moe(moonlighting as a surgeon) to replace the crayon.

    Moe: So what do you want here, uh, appendectomy, lipo, or ...
    the sampler. That's very popular.
    Homer: [holds up a blue crayon] I want you to stick this crayon
    into my brain.
    Moe: No problem -- the ol' Crayola oblongata.
    Moe: All right, tell me when I hit the sweet spot.
    Homer: Deeper, you pusillanimous pilsner pusher!
    Moe: All right, all right. [with a small hammer and chisel,
    taps the crayon further up Homer's nose]
    Homer: De-fense! [woof-woof] De-fense! [woof-woof]
    Moe: Eh, that's pretty dumb. But, uh ... [taps once more]
    Homer: Extended warranty? How can I lose?
    Moe: Perfect.

    -- Simpsons episode "HOMR" BABF22
  • My first foray into the IT field was a tech support job at GE's sister corp, National TechTeam. My 'project' was COMPUTER SUPPORT PLUS, basically Circuit CIty's extended warranty support.

    Because we don't like replacing 5 year old technology (mainly because that 300MB hdd that came with your HP doesn't exist anymore, so we would have to upgrade you to the smallest thing we could find (at the time 4GB) when you called us it wasn't as much of a tech call as it was an "insurance claim".

    Just as the insurance a
  • For certain items including Laptops and PDAs, this is not only recommended but necessary; provided, the screen is covered.

    I purchased a Visor and broke the screen only hours after purchasing it. The extended warrenty saved my *$$.

  • I worked at Best Buy for 1 year... (Score:3, Informative)

    by moonboy ( 2512 ) on Monday March 24, 2003 @11:37PM (#5588602)
    I worked at Best Buy for 1 year and we did not make commission on PSP's (this was in 1998-99). We were in fact pressured to sell them. It certainly was a way for Best Buy to increase revenues. Except for a few instances I remember, people were generally happy with the warranty service. Sometimes it might take longer to get the item fixed than the customer might like, but in general, I think they (PSP's) are okay. I'm not sure what they cost now, but I remember that a hard drive replacement would pay for the warranty. Of course this is when the largest drive out was about 10 GB and they cost about $250. I seem to remember that we did not have many people bring items back for repair, except for Packard Hell's. OH the HORROR!!

  • Extended warranties on laptops (Score:3, Interesting)

    by yamla ( 136560 ) <chris@@@hypocrite...org> on Monday March 24, 2003 @11:54PM (#5588681)
    I don't buy extended warranties as a rule. On my $500 (Canadian) purchase of a Radeon 9700, the extended warranty would have been something like $60 and it ALREADY COMES WITH A MANUFACTURER'S WARRANTY good for three years.

    However, one product I will buy extended warranties on is laptops. However, the price mentioned here is terrible. Dell will sell me a Complete warranty for three years for about $350 Canadian and that DOES cover abuse. Paying more than that (you list $250 U.S.) and not getting covered if I drop my laptop, that's just a scam. I mean, laptops simply don't break often enough to justify that kind of price unless it also covers abuse.

    No, I feel actually quite insulted, generally, when offered an extended warranty. Particularly after seeing the complete incompetance of the technicians at Future Shop (the only place here in Canada that routinely offers to sell me the warranties).
  • I'm a fan of the Toshi warrenties. They're reasonably well prices, give you 3 years of warrenty. It'll cover you for the life of the product, it's just not worth the risk
  • <homersimpson>
    Rust-proof undercoating! How can I lose!
    </homersimpson>
  • Extended warranty, how can I lose!?
  • If you have a tendency to blow out speakers sometimes or if you really punish your gamepads/joysticks/whatever by playing too vigorously, or if your mobile regimen is really demanding on your pda or laptop, buying some protection may be worth it. But that's only if it's almost a no-questions-asked warranty. CompUSA's "replacement plan" has been really good to me on parts I use and abuse, even for relatively inexpensive items.

    In most circumstances, though, it operates on the general principle of "risk manag
  • I bought one from a certain big name store, and, after the power rectification circuits on my machine failed after a good 1.5 years of use & abuse, the opted to give me a new machine, rather than buy replacement components. They're a good deal, especially after you've spend $2500+ on a machine.

    Same thing for my car. I bought an extended warranty for my car and, so far, have had approximately $3000 in parts / work done (2400 was the transmission, mind you). Definitely worth it.

  • Depends on the policy and the place and the item. (Score:3, Interesting)

    by Inoshiro ( 71693 ) on Tuesday March 25, 2003 @02:20AM (#5589280) Homepage
    Electronics Boutique offers extended service agreements on everything. It's basically insurance, since they cover everything except theft.

    But you need to ask yourself what's worth the insurance, and what's not. Is it worth another 50$ to have your PS2 replaced with no questions asked for 2 years? How about little GBA game holders? (A pack is 5$, the ESA is 3$).

    On some items it really makes sense, on others it doesn't. I'm glad I paid the extra 100$ on my TV, because I get it fixed for free. I bought an ESA on my Xbox, and am happily on #5 (2 motherboard failures, 2 bad DVD rom drives). The failure rates on the first gen consoles from Sony and Microsoft are scary.
    • I personally like IBM's (ThinkPad) on-site service (warranty). If your laptop's monitor gets fried, a guy from IBM comes to your office and fix it for you right there. Hard drive, keyboard, same thing.

      But whether the price you pay for ($1000.00+?) works for you really depends on your circumstances. If you live in a country side (I don't know, Texas?), it can take hours for tech guy to get your house; on the other hand, if you live in a city like SF, NY, they might be working a couple of blocks away from

  • I Buy Apple's (Score:3, Informative)

    by waldoj ( 8229 ) <<waldo> <at> <jaquith.org>> on Tuesday March 25, 2003 @02:36AM (#5589339) Homepage Journal
    I buy Apple's AppleCare Warranty [apple.com] whenever I buy a new Mac. (I bought a new iBook and a PowerMac just two weeks ago, both with extended warranties.) Like many manufacturers, Apple only provides a one-year warranty with their systems -- you've got to pay extra for a two-year extension for a total of three years. ($169 for an iMac, $249 for an iBook or PowerMac, $349 for a PowerBook.) It always seems expensive at the time, but 30 months after the purchase date, when the AC plug gets all wigggly, the video card becomes mysteriously fried, or the hard drive up and dies, it looks like a pretty good deal.

    -Waldo Jaquith
  • When I buy a computer from a retail outlet I'm buying the least expensive one there. It's just not worth it for a system that is less than $400.

  • Insurance vs linearity of money (Score:5, Insightful)

    by Cuthalion ( 65550 ) on Tuesday March 25, 2003 @05:51AM (#5589853) Homepage
    So insurance is a gamble, right? You bet some money that you're going to get hurt or your stuff will break or your house will burn down, and if you're right you get a big payout. But in traditional economic terms, the odds are against you, because the insurance company chose your premium specifically for that reason. But it can still be reasonable to buy insurance. Here's why:

    It all boils down to the fact that the utility of money is not linear. My (hypothetical) millionth dollar is worth less to me than my hundredth. That hundredth dollar is less important than my last dollar.

    So paying $10 to elimiate a 1/1500 risk of losing $10,000 doesn't make sense if you have a million bucks (since you can afford to play the odds and accumulate enough samples to make the expected averages show up), but if you have $8,000 it's a whole nother ball game; one 'loss' and you're fucked. The insurance providers have pockets deep enough to play the odds, and as a result it's profitable for them; if it weren't they would raise the premiums until it was. It's economical for them to cover risks you can't afford precisely because they have a fuckload more money than you do. So when you're talking about losing your last dollar, to them it's just another dollar and paying it out to you doesn't hurt them any more than any other dollar.

    So what does this mean? Insurance on small items, that you can afford to replace, such as (hopefully) consumer electronics, is probably not worth it. Situations where 'losing' would constitute a larger percentage of your net worth (cars, homes, personal medical fees, liability for hurting other persons) are where insuarance can be quite reasonable, despite what an erroneously linear risk v. reward calculation might suggest.

    Basically when considering insurance ask yourself "what happens if I need the insurance and don't have it?" If the answer is something like "I'm out $250" instead of "I'm fucked" you probably don't need the insurance / extended warranty. If it DOES make sense for you to buy the extended warranty on some consumer electronics, that probably means you're buying something you can't really afford, and you should reconsider the original purchase, not pay extra.
    • Exactly. You insure against catastrophic financial losses. Home. Primary wage earner. Car. Health. The small stuff, like appliances and contact lenses, you don't worry about. It's not worth the cost of insuring.

      I don't buy ESP's, and I've only considered it once. I was buying my wife a new digital camera for Christmas a few years ago - this was back when digital cams were new and expensive and cool. CompUSA offered me a 3 year extended warranty, and I thought "You know, in 2 1/2 years, this camer
  • When I picked up a laptop a few years back, I decided to get the 3 year, on site, next business day warranty they offered. Only cost an extra couple of hundred dollars on a beefy laptop and, given the thing is my work & my life, I can't afford it not working.

    Sure enough, within the first year, the keyboard started acting up. After swapping keyboards, motherboards and pretty much everything except the hard disk and CPU, they finally decided to replace my whole laptop.

    Best bit was, they never took back
  • I generally don't buy one with new equipment, but I almost always get one with open item equipment. I've purchased several things opened item at best buy (receiver, DVD player, Sony Wega TV). Each item was missing either a manual or a remote. You can usually negotiate a better price. In the case of the TV, it was missing the remote. I asked for a lower price since just about all the advanced features required the remote. They dropped it a further $150 (down $200 total now). I then said that they had

  • Your credit card may offer a better deal (Score:4, Insightful)

    by thogard ( 43403 ) on Tuesday March 25, 2003 @09:05AM (#5590282) Homepage
    Many credit cards will offer buyer protection for upto 5 years. Check out the details on your card since it may be a better than than the extended Warranties.
  • I know this is about to be modded as Flamebait, but if you look at every single thread so far on here, they all basically say:

    "I don't buy them because people make money off selling them."

    Well, fucking DUH. WHY DO PEOPLE SELL ANYTHING? TO MAKE FUCKING MONEY.

    I work for a retailer, that sells things with Service Plans. Virtually everything I buy, I buy the service plan for. Headphones, CD players, telephones (especially WIRELESS phones), you name it. The only things I don't buy service plans on a
  • there are obviously two types of people who are out there. those who think the warranties are worth while and those who dont. its going to break, the question is when.

    in the return policy == good to go

    in the manufacture warranty == pay shipping to and from, outside of 90 days pay labor

    outside of the warranty w/o extended warranty == throw it away

    i work for staples, and i used to make money on the warranties, 1$ on prp(product replacement plan) and 5% on the cost of a tsp(technical suport plan) however t
  • I would like to agree with many comments that have been posted here.

    I only buy them for laptops. I find that laptops often have a harder life than other devices (more bumps and vibrations) and hinges and such wear out. My plans for Apple, IBM and Dell laptops have more than paid for their costs.

    For just about anything else, it's usually not worth it.
  • Think about all the money you could have spent on extended warranties over the years if you fell for the sales pitches. For me, that could easily be thousands of dollars (including the ones they push for cars). A thousand or thousands of dollars is plenty to replace the odd thing that breaks.

    My point: don't buy extended warranties, because you are self-insured! The money saved over time more than covers anything that would actually need servicing or replacement.
  • 1) Ex-Radio Shack employee. Big time (relative to base pay) commission on service plans. The most popular was selling a 3-yr $20 plan for $20 (on sale from $40) headphones. Someone bought three headphones and one plan. She would come in once every few weeks or so and replace the headphone du jour her kids beat up.

    2) After having issues with a 36" TV just after the warranty ran out, I decided to buy a new set and *wanted* a service plan. In response to my questions, the droid at PC Richard (NY chain, l
  • To me, it all has to do with what the product cost vs. what they charge. Example: I bought a home theater receiver that was literally hot off the presses (it had been released less than a month before I bought it) with a retail price tag of $500. The receiver came with a 24 month warranty from the factory, and let's be honest, most solid state stuff is going to fail immediately or never. The 3-year warranty (which essentially extended the coverage from 2 to 3 years, and threw in the standard "power surge
  • I've never needed to replace something in one of my desktop machines (at home and at work) that would've been worth the price of a ~$200 warranty, but laptops are another story. Dell CompleteCare for laptops gives excellent service - next-day, on-site techs and it even covers abuse. $250 or so for the warranty is a lot better than paying parts and labor for a new LCD.
  • For me, that's what it boils down to. I paid like $5 on a $60 multimeter at Radio Shack for the extended warranty, because it's a "if it isn't working, bring it back and we'll replace it, no problem" warranty and the DMM has an unfused current (amp) measurement mode rated for 10A max. I figure that there's a good chance I'll manage to blow it up at some point by forgetting to switch the probes back to the voltage ports and voltage mode on the DMM at some point, so the $5 will probably be worth it...

    When
  • CBC market place (a consumer-affairs type TV program) had an interesting show on just this topic a while back. Their conclusion was that extended warranties are great if you're selling them, but are a waste of time and money for the actual consumer. You'd be much better off putting the money you'd spend on them in a high-interest savings account as your "fix-it/replace-it" fund.

    Here's the link [www.cbc.ca] to the web site. The page also has a link to the video, but alas, it's in Quicktime format.
  • I guess it all depends on your ethics. I know a guy that returns his home cordless phone to Ultimate Electronics every 11.5 months and purchases a new service plan for $10.

    I, who swore I would never buy a service agreement for the obvious reasons listed above, bought a $15 service plan on my Archos mp3 player because Comp USA has a satisfaction guarantee. If I decide that I'm unhappy then I can return it within the service agreement period. I think that I'll be unhappy right about the time the next gene
  • It's only worth it if the loss is financially unbearable. In all other cases, you are better off being your own insurer. The only item I consider worthy of an extended warantee is my laptop : I can't work without it and I know from experience that critical laptop parts _always_ fail at some point. Three year laptop warantees have always proven worth their cost so far. But for any other piece of home hardware I always do without it.

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