Extended warranty - Should I?

[gsslug]

I'm coming up on about a year since I purchased my Mits HD rear projection TV. I have not had any problems with it. I was wondering whether or not I should purchase one of the extended warranties offered from various companies or just take my chances. My last HD Mits failed suddenly about 5 years after purchase which is outside the time period of many extended warranties. From what I have read the lamp will need replacing but I figure I can do that myself.

Any thoughts?

[natlight]

Generaly as a rule I don't buy extended warrenties. They seem like a waste if you buy good equiptment.

Think about how many eletronics you have bought over the years and how many times you would have used an extended warrenty. Chances are that you would have paid a lot more for the warrenties than you would have with the one or two repairs you had done. Besides most good manufacturers will offer good repair options after the warrenty expires. I once spilled water on my bose lifestyle sub sortly after the warrenty expired. They refurbed it for me for $150.

If you buy good stuff it should last you a while and if your equiptment has any major issues you would see them before the 2-3 year warrenty expires.

[Sonnie]

I've got the 5 year extended warranty on both my 61" and 65" DLP LED displays. I had one on my old Toshiba and never used it, but got 50% back as a credit and used that on the 61" warranty.

I am a sucker for extended warranties, but cannot tell you the last time I used one.

[tenzip]

Extended warranty sales is basically almost pure profit for the seller. Most never get used, or even if the device breaks years down the line, the buyer might forget they got the extended warranty, or can't find the paperwork. Gravy.

My cousin works for an office supply chain store, he nearly got fired because a customer bought ~$10k worth of equipment, and my cousin didn't go past the point the customer said "No, I don't want any extended warranties." His manager took the sale away from my cousin, and actually had to give the customer a discount to keep his business. The customer was annoyed and almost left when the manager tried repeatedly to sell extended warranties.

[tonyvdb]

General rule is if your electronic device doesn't break down within the first year then you shouldn't have any problems after that so IMHOP they are a waste of money.

[eugovector]

Isn't anyone going to ask how much the extended warranty is?

[thsmith]

Here is what ConsumerReports has to say for rear projection HDTVs 2 years ago. I assume your mits is a DLP.

Rear-projection tvs: Maybe


Our data on rear-projection sets bought new in 2005 or 2006 show that about 10 percent needed repair, three times the rate of picture-tube and flat-panel TVs. A common problem: bulb failure, sometimes premature. The median cost paid by survey respondents to repair their one- or two-year-old rear-projection sets out of warranty was about $400.


Rear-projection microdisplays, which have largely replaced CRT-based models, use a special bulb to create the light necessary to project an image onto the rear of the screen. The bulbs have a life expectancy of 5,000 to 6,000 hours. You’ll hit that point in about four years if you watch the set for four hours a day, two years if your TV is on for eight or more hours a day. Most TVs covered in our survey were one or two years old, and many of those that needed a new bulb during that time were watched for no more than four hours a day. The math suggests those bulbs failed prematurely.


When a bulb burns out, you won’t see any picture, so you have to buy a replacement, which costs about $200 to $400. If a bulb fails during the standard warranty period, you’ll probably be mailed the bulb and directed to the manual for installation tips.


Replacement is fairly simple, much like replacing the bulb in a car’s headlight; generally, you need only a screwdriver. About one-third of respondents who needed a new lamp replaced it themselves. But if you’re hesitant to open up the back of your set, seek help from family, friends, or the pros.


Most extended warranties cover bulbs, along with in-home service for bulb replacement and most other problems. Warranties typically cover one bulb replacement during the contract, in addition to what the standard warranty covers. Sears has no limit on parts or labor during their three- or five-year contracts, but their plans cost more than most. Most extended warranties run concurrently with standard coverage, so a “three-year” policy actually offers only two more years of coverage.


CR’s take. Consider a warranty for a microdisplay set. Although our survey data suggest the vast majority are likely to be trouble-free in their early years, an extended warranty might make sense if:


A bulb is likely to be needed within the period of an extended warranty. Estimate how long it will take you to reach 5,000 hours, the claimed life of many bulbs. If the time lies within the period covered by an extended warranty, it might be worth buying a service plan, assuming the price is right. A service plan will also protect you against the possibility of premature bulb failure after the standard warranty expires.
The cost is reasonable. We suggest paying no more than the cost of one bulb or 15 percent of the TV’s price, whichever is less. If you can’t determine the cost of a replacement bulb (a possibility with a new TV), assume it’s $200 to $400. See whether you can bargain for a lower price on the warranty. Extended warranties have very high profit margins, so the price may be negotiable.

[thxgoon]

Nobody wants to be the one who recommended against the warranty when your tv breaks and you need it fixed . But as rule, I don't buy them. The warranties are a tremendous profit maker for all who are involved in the process, so statistically you save money by not purchasing a warranty.

On a side not to what Chris said.... I used to sell electronics, and I was constantly in danger of losing my job because I did not sell enough warranties. I would explain the plan and pricing, but if the customer asked me my honest opinion, I would give it to them and if they said no I would stop. This had me on probation with the company several times. This and pressure to sell a certain popular brand of cables that did absolutely nothing, are two big reasons that I don't miss working in the field.

[Sonnie]

Maybe we need to start selling extended warranties here at the Shack, except sell them heavily discounted to help out those who feel more comfortable owning one.

[tenzip]

Sonnie wrote:

. . . those who feel more comfortable owning one.

I think that's the main idea. If it gives you a sense of comfort, and you can spare the coin, buy it. I would suggest negotiating on the price, if at all possible. Some places, like where they wear blue shirts, might just have a fixed price scale, depending on the cost of the item, with no flexibility, but privately owned stores might be able to bend a little.

I'll just live out in the cold, I guess.

[thxgoon]

tenzip wrote:

I would suggest negotiating on the price, if at all possible.

Yes, and finding a place with a policy where you get money or store credit back if you never need it is a great selling point IMO.

[tonyvdb]

Sonnie wrote:

Maybe we need to start selling extended warranties here at the Shack, except sell them heavily discounted to help out those who feel more comfortable owning one.

Is that a real possibility Sonnie? However that probably would not be valid up here in Canada but it sounds like a good idea.

[Sonnie]

Absolutely it is a possibility. I am not sure about Canada either, but I suspect I can find out. I have actually spoken with Bankers Warranty Group for the possibilities of offering their warranty to Shack members as a discounted price. Sales would be handled electronically. We have to jump through a few hoops and ante up a tad, but it is very much a possibility that it may one day come about.

Here is a link to their website:

http://www.bankerswarrantygroup.com/

As you can see, they have been in business for 25 years. They handle the warranties for companies such as Sears, JC Penny's, and they also handle the American Express double warranty program.

I have spoken with their customer service and claims department just to get a feel for how they handle customers. Thus far I am impressed. Customer service was prompt and I only held about a minute for claims. The claim lady I spoke with was very polite and she did not know I was interested in selling their product until the end of our conversation. I was basically picking her for info initially.

One thing I like about this warranty is it can be purchased up to 60 days prior to your original manufacturers warranty expiration date, although it is inclusive of the manufacturers warranty.

Of course the warranty can be purchased through us regardless of where the product in purchased from.

Plasma, LCD, Projection and RPTV products are covered the same as the manufacturers warranty. If it's onsite, then the BWG warranty is onsite. If not, the customer can upgrade to an onsite warranty. All of their plans except the smallest will mirror the manufacturers warranty.

They offer the following plans:

• "Gold" Extended Warranty (For Plasma, LCD, Projection and RPTV products from $0 - $29,999.00) 2, 3, 4 or 5 years.
  
• "Platinum" Onsite Upgrade Warranty (For Plasma, LCD, Projection and RPTV products from $0 - $29,999.00) 2, 3, 4 or 5 years.
  
• Home Theater Extended Warranty Program (1 television, audio, speakers, and satellite limited to 1 room from $0 - $99,999.99) 3 or 5 year.
  
• Consumer Electronics Extended Warranty Program (Video, Audio, Misc Electronics from $400 - $4999.99) 3 or 5 year.
  
• Small Electronics Replacement Plan ($0 - $399.99) 1 or 2 year. *Mail in only!

I do not have the latest prices, but they compared reasonably well and we should be able to give a nice discount.

[lcaillo]

tenzip wrote:

Extended warranty sales is basically almost pure profit for the seller. Most never get used, or even if the device breaks years down the line, the buyer might forget they got the extended warranty, or can't find the paperwork. Gravy.

My cousin works for an office supply chain store, he nearly got fired because a customer bought ~$10k worth of equipment, and my cousin didn't go past the point the customer said "No, I don't want any extended warranties." His manager took the sale away from my cousin, and actually had to give the customer a discount to keep his business. The customer was annoyed and almost left when the manager tried repeatedly to sell extended warranties.

Most retailers make about 50% profit on the EW. With no inventory cost, this makes them a very lucrative item to sell, since in this environment of highly competitive pricing, they often make more on the warranty than on the product itself. There are online vendors for the warranties that are often deeply discounted.

We have a sub-Forum in service and support dedicated to extended warranties. It gets little attention. I suspect that most here understand that they are simply insurance, and are a matter of limiting risk for expensive failures that often go unused.

[lcaillo]

gsslug wrote:

I'm coming up on about a year since I purchased my Mits HD rear projection TV. I have not had any problems with it. I was wondering whether or not I should purchase one of the extended warranties offered from various companies or just take my chances. My last HD Mits failed suddenly about 5 years after purchase which is outside the time period of many extended warranties. From what I have read the lamp will need replacing but I figure I can do that myself.

Any thoughts?

Mitsubishi is an interesting case to discuss this. They have had their share of catastrophic failures on the early DLP sets. They have also offerred accomodations on the cost of repair and/or replaced lots of the sets, even after 4-5 years. They extended warranties on the later sets when they discovered that they had problems with sensors and light engines. There are thousands of consumers who bought extended warranties that never would have needed them. Some may have gotten some benefit from them at the very end of the warranty. There is no guarantee that Mits will be so accomodating to its customers when your set is 4-5 years old, but they have done lots of OOW repairs at reduced or no cost, or replaced sets for decades when it is clear that they have systematic failures.

Other vendors are far less accomodating to their customers.

[Klawd]

Extended warranties in Quebec (don't know if it applies to all of Canada) are a big no no. We have something called "legal warranty" where whatever you buy has to last its "reasonable lifetime". So basically, if you buy a fridge and fridges usually last 10 years, whether the warranty is 10 years or not and you fridge dies after 8 years, you can fight it out and get a free replacement.

It's a big hassle, but that's how it works. It's most likely one of the big reasons why stuff is generally more expensive North of the border