Most extended warranties are underutilized
You will probably be urged to purchase an extended warranty along with the electronic product you are buying, should you? Maybe, maybe not, says WTOP's Call for Action Director Shirley Rooker.
Are extended warranties a good deal for consumers?
Not usually. These days most products are quite reliable. According to a survey by Consumer Reports, the likelihood that a major appliance, such as a refrigerator or digital camera will need repair after three years is eight percent.
The biggest problem is that consumers who have extended warranties utilize them only about a third of the time. There are a number of reasons, for example, the store goes out of business and you purchased the warranty through the store. You may find the fine print exempts a lot of problems that might commonly occur, increasing the likelihood you won't use the warranty. Sometimes consumers simply forget they even have the extended warranty, other times they move and don't have access to a warranty service provider.
Are there times when an extended warranty might be a good idea?
There have been changes in the warranties offered by manufacturers. In the past we expected a warranty would last at least a year. Now you may find the product has a 90 day warranty. Before you purchase the produce make sure you know the length of the warranty. If you don't like the terms, you may want to consider another manufacturer or an extended warranty.
In some situations, an extended warranty may be helpful. For example, if you own a very large TV that is connected to an audio-video setup, you may want to have the repairs done in your home. In this case, you have to make certain the extended warranty will cover home service. It should be spelled out in the warranty document, don't believe a verbal promise.
Consumer Reports states that the product most likely to have a problem is a desktop or laptop personal computer with the repair rate exceeding 33 percent. However, refrigerators and television sets have repair rates at eight and seven percent respectively.
Before you make the purchase, check your credit card because many of them extend the manufacturers warrant as part of your service. If you do go with an extended warranty, check to see if there is a lemon clause that will replace the product after a number of unsuccessful repair attempts.
How do you compare extended warranties?
There are a number of factors to consider: Do you have to take the product into the repair shop or can you have the work done at home. Important point if you are dealing with a large item. In addition, where is the work done? Are there repair shops that are near you? What types of problems are covered? Are there specific repairs that are excluded? Check out the companies that are listed as being service providers. Start by using the internet and searching for complaints about them.
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