What to consider while buying Extended Warranties?

Extended warranties have a repute as being costly and consumers usually wonder whether it makes sense to buy them.

Buying an extended warranty is like purchasing an additional insurance for your devices. If the device breaks down or something goes wrong beyond the primary manufacturer warranty period, you are covered. Some warranties even include accidental damage coverage. So if an mp3 player is damaged by accident and breaks, the item will be fixed or replaced. For very costly items, it may make sense for a customer to pay a small percentage of the whole purchase price for an extended warranty and be protected for an added number of years in case something goes wrong. In addition to prospective savings from claiming under an extended plan, reduced stress from knowing you are protected has some benefit. Some refurbished items may be bundled with warranties that are for very short time periods (perhaps as little as 90 days), and thus it may make sense to pay for an extended warranty to protect a time period of up to an additional two or three years.

Each person needs to examine the following when considering purchasing an extended warranty:

  • Analyse your financial situation (can you have enough money to have a TV breakdown once the original warranty expires)
  • Cost of the item being bought
  • Time period of the original manufacturer warranty
  • Expected useful life of the product (don’t purchase a five year extended warranty if you presume to use an item for two years)
  • Ability to sleep well with or without warranty protection (piece of mind knowing you are covered)
  • The company who is offering the extended warranty coverage and who will be providing servicing if something goes wrong (not the seller of it)
  • Charge to repair the item if it breaks down (electronics can be expensive to repair and unless you are an engineer, it is unlikely you can make the fix yourself)
  • Likelihood of the item to break; if the item is a totally new electronic gadget by a company, there is perhaps a higher chance of a breakdown at some point

Extended warranties offered by manufacturers, retailers and some online providers can be very costly. The best advice when buying extended warranty coverage is to shop around.

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