Monday, 31 August 2015

Rule #129: Extended warranties

 Nothing like proclaiming to the world that you make a sub-standard product. The next time a salesman asks you "would you like to purchase the extended warranty for only $300.00?", reply to him.. "why are you trying to sell me a product that's so crappy it's guaranteed to break and the manufacturer is so aware of that, they are charging me to fix it before it even breaks?" Then knock something over and walk out.
I'm going to give you some advice. GOOD advice for once. If you've not listened to a single thing I've said over the last 8 months, heed this: Don't buy extended warranties. Here's the rationale: If you buy warranties they will eventually add up to thousands of dollars. And you may never need them. So refuse them all and if you ever do need to repair something that you didn't get the warranty for, you can write it off against the savings of unpurchased warranties.

Here are five key points to consider before purchasing an extended warranty for your items:

1. The Manufacturer's Warranty should be Sufficient. If not... Bad manufacturer.

2. Consumer Products Depreciate in Value

3. The Necessity of Repairs Is Rare
Repair rates for a variety of small electronics and home appliances range from 5 to 37 percent, which generally indicates that you're unlikely to need a repair. Considering this, it often makes more sense to save the money on an extended warranty and put it toward a repair instead, on the off-chance you'll need one.

4. Warranties Are Not Cost-Effective
They are actually extremely expensive.


5. Credit Cards Can Offer Better Protection
At least that's what my hot trophy girlfriend says.
 


In the new world, manufacturers will stand by their products and repair them for free.
AND SO IT SHALL BE WRITTEN!

4 comments:

  1. Well...I am glad to know that you do listen to me! I had a salesman trying to sell me the extended warranty on my 42" flat screen TV and his sales pitch to me was "I have seen tons of these tv's coming back for repairs". Pfft...nice sales pitch! I turned it around and said "If you had this amazing Platinum MasterCard...you wouldn't need to buy the exrta warranty"! He was very impressed and ended up getting his own MasterCard...that part is not really true but the rest of it is!

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    1. I dig your improvisation skills. But no advertising masterCards on my site. Especially if they have $125 fees, mrs. Anonymous!

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  2. I went to Bestbuy the other day to pick up a laptop as a Christmas present. First thing the sales guy says is "We don't receive any commissions working here, so I am just here to make sure you get what you want at the lowest price possible" Anyways after perusing for a few minutes I picked one to purchase. Well for the next 20 minutes he proceeded to explain the 4 different extended warranty plans they offer. After 2 minutes I tried to interject that I was not interested but I swear he didn't stop to even breathe as he rambled off his spiel. The laptop was about $650 after tax and he is trying to sell me a 3 year extended warranty that costs over $900!!! The warranty costs more then the dam laptop!!!

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    Replies
    1. You have to be straight up with these people. Shut them down as soon as they start and don't give them a chance to start their crap again.

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Agree? Disagree? Lay it on me!