Buying Insurance and/or Warranty for products.

Is it worth it?

[sun818]

Some businesses online and ofline offer insurance and/or warranties on your purchases. The electronics stores and major auction sites offer extended warranty. Even Paypal offers "Buyer Protection".

Is this just another revenue stream? Or do buyers really benefit from this type of service?

[DrCool]

I have never bought one of these but I can tell you they are a huge profit center for the store. I used to work at a retailer who pushed these extended warranties on all kind of office machines and electronics. They had us push these things to the point of being obnoxious because there is more money to be made selling the extended warranty than is selling the fax machine or copier the warranty covers.

[pendanticist]

I used to purchase extended warranties on everything - if available. At no time did I have cause to get warrented repairs under that extension.

So, given the options: Revenue stream.

More times than not, if the product is going to fail it will do so within the original warranties time frame.

Pendanticist.

[mivox]

If it's an item that's liable to be carried around, moved a lot, or used by folks who may not necessarily know what they're doing, I'd say yes.

OTOH, in all my years of buying electronics, anything that broke did it within the original warranty period...

[Dpeper]

I always buy extended warranties on my Cell phones from Best Buy Ive goten a new phone every 8 months for about 3 years now with no cost to me, Its really wierd how my phone magically breaks every 8 months. But the warrnanty runs out soon so Ill have to buy my next one :( but Ill def. be getting the warranty again.

-Donny

[pmac]

Massive margin boost for the retailer. Salesmen I used to work with didn't call it extending the warranty, they called it "extending the bend" :o

[Syren_Song]

When my husband was getting ready to buy a new laptop, his brother told him to get the one with the best warranty. He got an NEC Versa 2600 that went in for work 4 times over a three years period. I'd say he got his money's-worth from the warranty on that purchase.

It really depends on what the item is, who the manufacturer is, and how much you think the item might get abused and whether it can take the punishment you're intending on throwing at it. ;)

[jsinger]

I hate shopping at Best Buy due do their high pressure hyping of extended warranty plans. They tell you the product is fabulous, then they warn it will fall apart in 366 days. So damn funny.

Never buy insurance for a loss you can handle yourself easily. Yeah, I wouldn't want my house to burn down, but I'll self insure that new $100 VCR.

Like being "king," it is GOOD (usually VERY good) to be in the insurance business.

---

One of the dumbest deals is credit card insurance. For about a buck a month it will pay off your card if you die. First most people who die (of natural causes) aren't out shopping till the end...they're in a nursing home or hospital.

Think of how much work it is for the CC companies to collect your final bill (often tiny) from your estate. My guess is they won't even file a claim if the amount is fairly small. These CC companies have found a way to save a whole chunk of collection effort AND make a huge profit doing so!

[sun818]

Interesting comments. Sounds like warranties may be beneficial for portable items like cell phones or laptops. It is also useful if you are especially rough or clumsy with your electronic gear. I would never buy one of those flip phones because I would break it in two somehow... ;)

Okay, can someone explain the difference between a "guarantee" and a "warranty"? Are guarantees only for services, and warranties only for products?

[jsinger]

"Okay, can someone explain the difference between a "guarantee" and a "warranty"?

In the U.S, they're the same thing

[pmac]

> difference between a "guarantee" and a "warranty"? <

Warranty- We warranty this cell phone to be free of defects for a period of five years.

Guarantee- We guarantee that in five years, that this will still be a cell phone.

Seriously though, you are more likely to see a product that uses a pro-rated formula for service or repair referred to as a warranty, and an item that is fully covered for the term, referred to as a guarantee.