Technobuddy

By Randy

March 21, 2007 9:09 AM | Link to this

I bought an extended warranty for my new HDTV - even though I do understand that there’s disagreement about the value of an extended warranty, the downside (a huge repair bill on an expensive item) seemed to outweigh the chance (maybe a good one) that I would never use the warranty.

By Statistical Jimmy

March 21, 2007 9:22 AM | Link to this

Extended warranties are, at best, about as good a deal as scratch off tickets. From my understanding and some short researching, it seems the profit margins for those warranties are between 40 to 80%, versus about 10% for the product itself. Several sources repeated 70% as the typical profit. Yup, kind of like a scratch off ticket—anytime someone wins, they’re sure glad they bought one, but most of the time, you just wasted a buck or two. My advice would be to put the extra cash the warranty would cost into an emergency breakdown fund. For the price of the warranty on several items, you’d have enough cash to repair or replace at least one of them. And certainly if the warranty is 30% of the price, either you’re getting ripped off bigtime, or the product is a lemon. Save your money.

By Informed Consumer

March 21, 2007 9:49 AM | Link to this

I’m an electronics engineer and I used to work for a large consumer electronics retailer. By far (in the Atlanta area), the most common problem is due to power surges. Every time your refrigerator kicks on — poof — a power spike. Same with the central A/C.

This happens day after day after day, hour after hour. That hurts any sensitive electronics which plug right into the wall. It’s like a tiny little hammer, chipping away at your TV or computer hour after hour, day after day.

A nearby lightning strike can send a power spike through your phone line and cable TV cable and right to your new HDTV or computer.

The bottom line? Forget those surge protectors and get a UPS for your sensitive electronics (HDTV, Computer, etc) and plug them into that. A UPS costs roughly as much as a high-end power strip “surge protector” but is much better.

This will protect your electronics and is usually less expensive than an extended warranty (sometimes called a PSP).

By Spartan

March 21, 2007 9:54 AM | Link to this

Analyzing item by item is exactly what does NOT work. Sure, if you just look at the HDTV, the warranty company is still going to make a huge profit margin. However, the proper way to look at it is basic self-insurance. Simply reject ALL extended warranties for ALL purchases, and use the money saved for the one item that may break down (out of its original warranty term) down the road. This is easy, and there is no need to go through an analysis every time you buy something and think this may be the “one” that is going to break and not be covered by the original warranty. No brainer.

By Spartan

March 21, 2007 9:55 AM | Link to this

Analyzing item by item is exactly what does NOT work. Sure, if you just look at the HDTV, the warranty company is still going to make a huge profit margin. However, the proper way to look at it is basic self-insurance. Simply reject ALL extended warranties for ALL purchases, and use the money saved for the one item that may break down (out of its original warranty term) down the road. This is easy, and there is no need to go through an analysis every time you buy something and think this may be the “one” that is going to break and not be covered by the original warranty. No brainer.

By HAROLD

March 21, 2007 10:16 AM | Link to this

TECHNOBUDDY IS RIGHT!

MEDICAL INSURANCE AND AUTO INSURANCE ARE THE SAME THING TOO!

HAROLD WILL DROP BOTH TODAY AND SAVE TONS OF MONEY!

THANKS TECHNOBUDDY!

By Cletus Snow

March 21, 2007 12:59 PM | Link to this

I’ll have to agree with Andy, only on a very high dollar piece of equipment that could be expensive to repair or replace.

By Patrick

March 21, 2007 1:02 PM | Link to this

Harold: I sure hope you’re joking. Go ahead and drop your auto insurance. Don’t come crying to anybody here when you get hauled off to jail, and your car gets towed if you get caught. FYI: Your registration will be suspended the second the local tag office finds out you’ve dropped your insurance. It costs a boatload of money to re-register, after getting new insurance. Not to mention the hefty fine that can be imposed on you if a cop pulls you over for a minor violation (headlight burned out) or at a license checkpoint.

I used to listen to Clark Howard, and I can still hear him saying how extended warranties are a joke. When I worked at K-Mart, we were to get some kind of bonus for selling them. I never did. I knew then they were a joke. To me, an extended warranty says “We don’t trust our product to last as long as you want it to. We’re admitting that it’s cheaply made, has cheap parts, and we ripped you off price-wise. We want to rip you off more by selling you a phony insurance policy.”

By Eric

March 21, 2007 1:39 PM | Link to this

The only thing I will buy a warranty on period is a car and a laptop. Laptops are easy to break, spilled coke or a drop can toast the things. I would rather have it than not to have it.

By Al

March 21, 2007 1:56 PM | Link to this

I bought a warranty on the home theater projector I bought recently. If it stops working within the next two years(including if the bulb burns out, which I’m almost certain it will) it will get fixed free(new bulb). The warranty costs less than the bulb replacement, so I’m automatically money ahead, assuming I watch enough TV over the next 2 years.