Extended warranties - Are they worth it?
By Matt Burns 
posted Aug 7th 2006 10:43AM
posted Aug 7th 2006 10:43AM
These days, if you go out to buy anything from a weed-whacker to a car, you are going to hear an extended warranty pitch. Cheese (salesmen lingo for service plans) makes everyone a lot of money. Back in the old days of Circuit City when the salesman were on commission, these service plans paid 15% commission (I used to be one) so if you sold $500 in cheese, then you walked away with 75 bucks in just warranty, let alone any accessories you sold with it. Digital Home Canada has a great write-up on how exactly they work and who they pay. They are recommending not to buy 'em, but we here at HDBeat are saying don't throw the idea right out the window by looking at the plan and seeing if it works with how you are using the product. For example, if you are buying a DLP that has a lamp life of 4000 - 5000 hours and the set is on for 12 hours a day (12 hours a day x 365 days = 4380 hours in a year), then it might make sense if the cost of the warranty is anywhere near the cost of a lamp. But if that DLP is only on for the occasional movie or sports game, then it probably doesn't make sense. All we are saying is understand how the TV technology works before you decline that salesman. Keep in mind you usually have a few weeks to come back and buy this service plan, so take some literature and read up about it.What do you think about extended warranties? Did you buy one for your HDTV?
NOTE: There has been a lot of discussion in the comments about how some retailers do not cover the lamp, but Best Buy's and Circuit City's service plans does cover the bulb.
I almost never buy a warranty. The two exceptions I have made were only launch day of the Playstation 2, which I used 6 months later and got a new one, so it turned out to be worth it. And the second was on my newly purchased Maxent 42" Plasma TV. There was a price mistake online from where I bought the item, so the instore retailer matched the price mistake and I only paid $159.99 instead of $299.00. I figured its an off brand TV, eventhough it uses LG parts, I am getting a good price on the warranty, and who knows what the longetivity is on this brand... So 90% of the time dont buy, unless its a brand new technology, Playstation 3, or its a pricey peice of equipment thats reliabilty may be questionable.
I bought one for my Hitachi 43" rear-projection HDTV monitor. I did use the extended warrenty after the factory one expired for a power supply issue.
I think it depends on both the product and the cost of the plan. On my last HDTV purchase the cost of the plan was not that bad, and it covers IN HOME service for 4 years. Totally worth the cost of the plan in my opinion. It's like a cheap insurance policy.
I opted for a $100 3 year plan on my rear projection HDTV in 2002. Why? They'd come out once a year and disable the thing, clean it inside and out and then refocus the lens/projectors. I figure that was easily worth $33 a year.
Of course, now that LCDs are cheap and plentiful there's no reason to get a rear proj tv or DLP. and LCDs will run for a long, long time.
I bought a refurbished Phillips CRT off an online dealer that uses the same stock as the Phillips outlet site. Of course I bought the 3 yr warranty (there are some really bad sets in that batch and I knew it was a gamble). I did however walk away with perfect HDTV and 3 yr warranty for less than $450. Gamble paid off, and the warranty is there just in case.
Has something changed in the last year or so on extended warranty coverage? The last time I checked consumables (bulbs, batteries, etc.) were not covered.
Already know its worth it.
Bought a 26" Samsung CRT from Sears in 2002, and bought their warranty. I decided on a new Samsung set to get the built-in HD tuner and HDMI port from Best Buy in 2004. So I was about to sell my old Samsung to a buddy when I got a weird hourglass effect where the picture pulled away from the sides. Luckily, the Sears techs fixed it no problem. And it made it a whole lot easier to sell to him, because I told him he could just take it to Sears anytime in the next 2 years and they'd fix it.
Ironically, I was not planning on buying the 4 year service contract with Best Buy, but after that experience, I realized it was definitely worth it!
I got one on my closeout RCA F38310 television but that was because I was going into it knowing the issues the television had. Had the power supply repaired once under the extended warranty and it was money well spent.
When I purchased my Sony 3LCD 42A10 TV in November, I didn't opt for the service plan simply because I don't think the bulb will burn out in the time it is warrentied and also I am pretty sure BB and CC do not cover bulb replacements even with the service plan. There is a lot of discussion about this on the avsforum.
Over time, it is always cheaper to just pay to replace or repair the items that break yourself. If this wasn't the case, they wouldn't be selling these warranties and paying out huge commissions on them. Think about it - add $150ish on every thing you buy from stereo/tv equipment, washer, dryer, etc... You'd be better to put that in an interest bearing account and have your own insurance policy.
Save your money, or better yet, spend that extra amount on a better quality brand that won't break, or one with more features!!!
When the sales rep bugs you repeatedly about the extended warranty, just tell them you're buying it for your boss and that he never buys those things... Or do what I do, tell them you're so rich that you'll just replace it when it breaks. Or be honest and say that you're a techno-junkie that reads HDBeat every 30 minutes and you'll trade up and sell this crap on e-bay way before it every goes bad. You know its true.
-h
The cost of my "EW" is simply the tax I pay buying from my local CostCo or costco.com rather than buying from an online vendor tax-free. For those that don't know: CostCo has an indefinite 100% return (not exchange; cash, not store credit) policy on anything besides PCs/laptops (those are 6 months only). Granted, there's the yearly membership fee too, but that's already covered by the cash savings I get buying food there instead of at the local grocer.
Of course, with people continually abusing this policy and simply returning their TVs/projectors for cash when they want to upgrade to the "latest tech", who knows how long this policy will remain. Nice thing is that a change in policy would only affect new merchandise. Just need to check the policy each time before buying anything new, I suppose.
I bought the extended warranty with my Mitsubishi DLP WD52525 TV. A year and a half later I'm at the end of the $250 bulb's life, and Best Buy will replace it for free.
Back in the day, (1995) Best Buy used to sell $19 and $29 4-year warranties and TVs and other electronics. What are they nowadays, $59-99???