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May 12, 2007

Whats a Warranty Worth?

A product warranty can be a great feature to protect you from defects and failures in a newly purchased product, but how much is the warranty actually worth? First, consider what is likely to go wrong with the product, when that is likely to happen and will that actually be covered by the warranty. For example a new vehicle is likely covered by a very lengthy power train warranty. However, you are far more likely to find defects in non-power train components which are covered by a much shorter warranty period and exclude many items. Secondly, consider how you have to make a claim under the warranty. Do you have to ship the product long distances, give it to a service center for long periods or pay a deductible? If this item is something you require day to day, then being without it is a huge hassle. If the item is large or heavy, for example a TV, its unlikely to be worthwhile to make a warranty claim if you don't have a local service depot to and have to ship it. Thirdly, consider who is backing up the warranty. If its a fly by night company, they may not be around in a few years time when you need to make a warranty claim. If its a third party company that provides warranties, they might be heavily biased into providing the worst service possible to boost profits. Finally, take advantage of purchase security and extended warranty coverage many credit cards provide when products are purchased on them. For example, the card I use regularly, has 90 days coverage for items that are lost, stolen or damaged and extends the manufacturers warranty by doubling the warranty period (to a maximum of a 1 year extension)

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