Define Warranty Insurance

Life has no guarantees and neither do many goods and services. It is for this reason that many manufacturers offer warranties on a variety of products.

  1. Identification

    • A warranty is an assurance that if a product or service breaks down or fails to meet the consumer's expectation, it can be redeemed for a replacement or repair. Warranties often have a set time period before they elapse.

    Benefits

    • Warranties are an added benefit that is a selling tool for the product or service. They also serve as additional revenue for the manufacturer.

    Considerations

    • Consumers must consider the overall cost of the product and whether it is beneficial to buy a warranty. They must also consider how long they wish the product to last.

    Types

    • There are warranties for electronic products like radios and computers. Warranties also exist for automobiles for a certain time period and mileage.

    Effects

    • Warranties give consumers a standard channel for recourse when they are unhappy with a product or service they have received. It also shows good faith on the part of the manufacturer.

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