Warranties: Insurance for your Wallet (Part 1)

It can seem rather strange when you think about it. You are about to make a sizeable purchase on something on a new item. It might be a car. It might be a new t.v. or other electronic item. If you are like me, the first idea you have is to get something that is of good quality - something that will last. So, you may do your research and pick a brand that you can trust.

Research is something that should always be done for any type of electronic or big purchase in my opinion. Your money is valuable and so you should strive to make sure that you get something that is reasonably priced and of high quality. The purchase is likely to cost you a sizeable chunk of change — more money than you could replace in a month or two if something went poorly and the item became damaged or broke or was stolen. This is why you want to choose the item carefully.

Aren’t Warranties a Waste of Money?

If you think the way I do, you might think that buying a warranty is a waste of money:

• the item you bought is a good-quality item
• it was made by a solid company
• Plus, doesn’t the item come with a manufacturer’s warranty anyway?

Although all of these points are probably true, as I’ve discovered recently, depending on the item, the manufacturer’s warranty may not cover the problem you find. It may not cover the cost of the labor for the repair, just the cost of the parts. Or, if you decide to go cheap, the company may not be in business anymore or may be difficult to contact.

Registering Your Product

Another common problem with manufacturer’s warranties is that they often are dependant on the person buying the item to send in a registration card. Personally, I never send these in. The last thing you want to do when you get a cool new toy is read all of the fine print.

Real Life Examples

Over the past year, three electronic items that we’ve purchased at home have been in need of repairs:

LCD T.V.
Laptop
Car

For the TV, we found that there was a bulb and a ballister that broke inside and that both of these needed to be replaced. Total cost: 300

For the laptop, the screen started to separate, the battery wore out, and the Power Supply began to fail. The screen issues were not the big issue; the deal-braker was the lack of power to the laptop. There was just no way to keep it running. Total cost: 800 dollars. (In general, it is more expensive to purchase parts and repairs on laptops for screens than it is to just purchase a new machine.)

For the car, the brakes wore out, there were other miscellaneous repairs totaling close to 500 dollars.

These are three examples of expensive repairs that may not be so out of the ordinary for you. You might have your own, but the fact is, we are living in an expensive, electronic world.

So, the question remains: When do you decide to buy a warranty?

In my next post, I will cite specific reasons when/why I believe you should consider warranties for large purchases. And we’ll see if you can determine which of these item costs were actually were covered by a warranty or not.