Are Extended Warranties a Good Idea on Electronics?
When buying electronics, you often will be offered an extended warranty for an additional price. A sales representative likely will try to convince you of the benefits and peace of mind that supposedly come with the warranty, which will cover your device in case of damage for a certain amount of time. But before you buy an extended warranty, consider the following.
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Manufacturer's Warranties
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An extended warranty is different from the manufacturer's warranty. For example, if you buy a Sony PlayStation from Best Buy, you automatically receive the manufacturer's warranty from Sony for the equipment, free of charge. If the item breaks down within the manufacturer's warranty period, which will be disclosed in the product's documentation, you would take it to a Sony dealer or mail it to a Sony service center to have it repaired or replaced. In many cases, the manufacturer's warranty eliminates the need for an extended warranty. The sales representative should be able to tell you how long an item is covered by the manufacturer's warranty.
Implied Warranties
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The manufacturer's warranty and the extended warranty are express warranties. An implied warranty is the understanding that the item you buy will work as expected for a certain amount of time, given reasonable usage. Laws in some states say that an item is covered by an implied warranty indefinitely, while other states specify an amount of time, depending on the product. In other words, you may not even need a guarantee or warranty, depending on where you live. Be sure to study your state's laws to understand implied warranty.
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Extended Warranties
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The benefits of an extended warranty vary depending on the retailer. The sales representative likely will tell you the details. In most cases, the extended warranty automatically takes effect after the end of the manufacturer's express warranty. At that point, if the item breaks down or becomes damaged, you can bring it into the store where you bought it, or some other service center stipulated by the warranty agreement. Be sure that the extended warranty covers parts and labor and any other extra fees for repair. An extended warranty may be convenient if you do not wish to mail your item to the manufacturer. But depending on the level of protection your receive from the implied and manufacturer's warranties, it may not be necessary.
Service Contracts
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A service contract is essentially the same as a warranty. In essence, a warranty you must buy is a legal contract between you and the retailer. What a service contract covers depends on the terms. Be sure to read the contract carefully to see what is covered. You may not be covered for negligence or wear or tear. But in some cases, you may be able to get your item fixed with no questions asked.
Considerations
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One last thing to consider is the price of the product. In some cases, it is more viable to replace the item if it breaks than to pay for a warranty. For example, a $30 warranty on a $60 CD player is not particularly beneficial. Assuming that the CD player becomes defective in three years, it may be better to buy a newer -- and by that time, more inexpensive -- model than to have your old one fixed. Also, your credit card company already may extend the warranty on the items you buy with your card. Check the card's terms and conditions.
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