From: bill@bilver.uucp (Bill Vermillion)
Subject: Re: Extended Warranties
Organization: W. J. Vermillion - Winter Park, FL
Distribution: usa
Date: Fri, 9 Oct 1992 03:17:05 GMT

In article <BvrHMo.341@fc.hp.com> rjn@FC.HP.COM writes:
>Becoming an FAQ...

>My first test on extended warranties (EW) for consumer products is:

>  * Is it less than 4% of purchase price per year?  Use the "future value"
>    of the payment(s), at a reasonable interest rate, to compute the
>    percentage.   ....

> * What does the retailer have to do to "register" your EW?  How can you
>   confirm that this step actually happens?

>Generally, based on typical EW prices, if you were to invest the contract-
>equivalent amount of money on each product purchase, you would shortly have
>about ten times what you need to replace a product by the time the first one
>fails.

Bob - just one comment.  I buy extended warranty on high-end products
only - because one store - a large chain - sends you their warranty
after you get the device.  I have seen the paperwork delayed by a
couple of months - but hang onto the receipt.

In fairly large type - at the start of the warranty section it states,
in approximately these terms "This warranty covers lightning damage".

In this area that means a lot.  Most warranties exclude lightning
damage - so I look as this as more of lightning insurance more than
anything else.   Lightning is about the only thing that will damage a
power amp.


>Consumer EWs are primarily a way for retailers and their salespeople to
>generate extra profits and commissions, respectively.  They rely on the the
>following:

(reasons deleted - wjv)

If you doubt Bob on this - the maximizing of extra profits and
commission - tell them you don't want it.   Often you will find they
will drop the retail price.  Some drops make the EW a good buy.  And in
one instance, I had a store drop the price of the equipment by the
amount of the EW.  That was on a used item - non-audio - that only had
a 30 day warranty.   They dropped the used price by the amount of a
full-year warranty.   Had an LD player  LD-W1 (lists about $1700 - I
bought it on discount) where they dropped the price further so the 5
year warranty only cost $25 more.

EWs are a profit item - and I only buy them for peace of mind on high
ticket items.

>As in most things, beware of anecdotal evidence.  You will hear from a few
>vocal people who "got their money's worth" on an EW.  You are far less
>likely to hear others admit that:

This really has nothing to do with EWs, but the best deal I ever got
was on a Sony N77ES Amp.  List at $1200.  I got a floor model in a
scratch'n'dent sale for $699. These only carry 30 day warranty.  I
bought full warranty for not too much.

Failed when I got it home.  Took it in for repair.  It seemed to take
longer than it should - and I had a salesman check it for me.   He
called a couple of days later and said it was ready.

I had brought in an amp - with no box.  I picked up a factory sealed
NEW amp.   Turns out my amp was stolen after it was repaired and being
shipped to the other store across town.  Sort of made for the times I
didn't get a good deal :-)

-- 
Bill Vermillion - bill@bilver.oau.org  bill.vermillion@oau.org
                - bill@bilver.uucp 
                - ..!{peora|ge-dab|tous|tarpit}!bilver!bill

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