Many consumers wrestle with the decision to buy product warranties on new items. Even Walmart now offers extended warranties on most electronic items and video games. But are extended warranties really worth the added cost?
Our family has adopted a few guidelines concerning product warranties. First, we examine the manufacturer warranty. If the product manufacturer offers a solid warranty, we don’t bother with third-party coverage. Second, if the item is a high-dollar purchase and gets excessive use, we go for the warranty. Here’s an example.
How Extended Product Warranties Resulted in a New iPhone 4S for Free
After years of plugging away on a tired old Dell desktop, I was ready to upgrade to a laptop. One of my writing mentors convinced me to try a MacBook Pro. I purchased one from Best Buy and opted in for the three-year warranty Best Buy offered for a couple of hundred bucks. My mentor was right, I loved my the new laptop and it saw hours upon hours of heavy usage as it became my main work horse for my business without a moment of grief in the nearly three years I owned it.
Twenty days before my warranty was up, the MacBook failed to power up one morning. I called Best Buy and they said to bring it in for a Geek to evaluate. He ordered a new battery (for free, since it was included in the warranty) and told me he’d have to ship it out for repairs. Two weeks later, the call came in that my trustworthy MacBook Pro was too expensive to repair. I had worked it to death, and now Best Buy was going to replace it with a shiny new model since it was still under warranty coverage. I stood at the counter as a salesclerk refunded my entire original purchase price onto a Best Buy store credit card. Not only did I get back what I had paid for my computer three years ago, I got back the price of the extended warranty, and the sales tax. It was time to shop!
I picked out a smaller, more portable MacBook Pro with a smaller price tag than my original, picked up an acrylic protective case, a carrying bag, and a new three year warranty – with $350 still left on the card after checking out.
A couple of months later, my trusty Motorla Droid that served me well for four years decided to give up the CPU and die. Since I already use my MacBook Pro and iPad extensively for work, I decided that perhaps an iPhone 4S would be a good choice this time around. I purchased one from Best Buy using the remaining balance on my refund card, and purchased a LifeProof Case as well. I also opted in for the Best Buy coverage – declining the Verizon Wireless coverage I previously had on the Droid.
In the end, I came home with a shiny new computer, some nice accessories, a new iPhone 4S, and extended warranty coverage – funded by one original purchase with zero dollars paid out of my pocket this year.
Extended product warranties work out well for my family on high-dollar, high-usage items. We tend to pass on warranties for items that are likely to be outdated or replaced at a cheaper price in coming months – like the $60 DVD player bought last year, or the $50 digital watch bought for my son this Christmas. The manufacturers’ warranties are sufficient coverage to meet our needs on such items.
Rolling Over the Coverage
We also received a refund of several hundred dollars from an extended warranty when our car was totaled earlier this year. We purchased the 100,000-mile extended repair warranty for the car when we purchased it new, and the dealer refunded the balance of the unused portion of the warranty, which paid for over half of the purchase price of a warranty to cover our new car under the same type of policy.
For our family, extended warranties on big-ticket items have paid off exceedingly well. Do you have any extended warranty experiences – good or bad – you’d like to share? Your experiences could help others make an informed choice about purchasing an extended warranty.