Half of this is for coverage on new-car purchases. The problem is, customers aren't getting their money's worth. Retailers are exploiting these add-ons. They are taking advantage of the abstract concept and confusing details of warranties and of their customers' fear of the high technology in many new products. Some computer dealers offer extra warranties if the customer pays a 10 percent premium over the purchase price.
Many companies do offer legitimate warranties.
Protection is now available for investment in a child's college tuition. Many credit cards now offer free extended warranties and some type of protection when purchases are made with their card. They'll also double most manufacturers' warranties, adding up to one extra year of coverage, and include gifts under this protection. The popularity of these services underscores the importance that customers place on this protection and the market value and economic viability of these added expenses. A product or service guarantee is an extremely effective way to improve customer satisfaction.