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Do You Really Need That Warranty?
by
Pamela Kramer
Redbook, December 2005
You're about to pay
good money for a new DVD player, and the salesperson
pushes you to spend even more on an extended
warranty. Sure, you want to get the most out of your
purchase, but you're also a bit skeptical. Here, how
to decide if you should pony up for this and other
commonly offered protection plans.
Electronics
Extended warranty (cost: $40-$200 and up)
This typically provides one to four years of
protection against defects. The policy may be in
addition to the manufacturer's warranty (which
usually lasts 90 days to one year), or both may run
concurrently. Some include, for instance, free
performance checks and coverage for problems due to
normal use.
Should you get it?
Probably not. "If an electronic product, such as a
digital camera, is going to fail, it'll probably
happen within the time period covered by the store's
return policy or the manufacturer's warranty," says
Tim Duffy, a consumer advocate in Covina, CA (timduffy.com).
"Most extended warranties are never used." One
exception: laptops, which are more prone to problems
than other electronic goods.
Appliances
Service contract (cost: $60-$300 and up)
A service contract lengthens the manufacturer's
warranty against product failure for one to four
years, or may run concurrently with it. Some
reimburse you for food spoilage if your fridge dies!
Should you get it?
Probably not. "The vast majority of appliance
problems occur either in the first few days or long
after the service contract is up," says Duffy. Also,
for an expensive appliance (such as a high-end
refrigerator), you may be able to negotiate with the
seller to have the extended service contract thrown
in for free.
Cell Phones
Replacement agreement (cost: $3-$5 a month)
With this policy, you'll get a new phone if yours is
lost, stolen, or damaged. There's usually a $35-$50
deductible, and you can be guaranteed overnight
replacement plus coverage for accessories.
Should you get it?
Maybe. "If you're always misplacing or dropping your
phone, buying coverage is probably a good idea,"
says Robyn Spizman, a consumer advocate in Atlanta.
On the other hand, if you buy a new phone with the
latest features every year or two, put the money
toward your next model instead.
Cars
Dealer extras, such as paint protection and window
tinting (cost: $100-$300 and up per item)
Dealers like to sell these options at the point of
purchase. You're already spending big bucks on a new
car, so what's a few hundred more? Another sneaky
tactic: installing extras before the cars go on the
sales lot and then adding that cost to the sticker
price.
Should you get it?
Probably not. "Most extras are wildly overpriced and
not worth what dealers charge," says Mike Hudson,
consumer advice editor at edmunds.com, an online
car-shopping guide. If an extra has been added to a
car on the lot that you want, insist that the dealer
remove it or not charge you for it. And if you do
want an extra, ask the dealer to sell it to you for
fair market value: Check prices first with auto
accessory shops, or have one of those shops install
it for you later. Says Hudson: "You can save 50
percent or more off of the dealer's price for these
features."
Furniture
Fabric protection (cost: $50-$150 per item)
This safeguard--which forms a barrier against dirt
and spills--is sprayed on your furniture at the
store's warehouse. Some plans come with a two- to
five-year stain warranty that guarantees repair or
replacement if a stain can't be removed.
Should you get it?
Probably not. Most manufacturers automatically treat
their upholstery before it leaves the factory (ask
the seller to be sure), so it's redundant to put it
on again, explains Kimberly Causey, author of The
Furniture Factory Outlet Guide. And most stain
warranties have exclusions such as chocolate, pet
stains, and red wine, so they're too restrictive.
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