OT: All about warranties

[ARPRINCE]

Here's a good link about extended warranties and stuff.

I for one seldom gets 'em (except for my DLP TV when I got it). When ever you buy some electronic stuff or what have you, geezeeee, those sales personnel give you a bleak outlook on what you are purchasing making it look necessary that you really need EWs.

Excerpt below....

By the industry's own calculations, Strasfeld is right. Warranty Week,

an industry publication, last year estimated that of the $15 billion in

premiums charged consumers in 2004, $7.5 billion went straight into the

pockets of the stores that sell warranties as their cut.

[Jeff Matthews]

The excerpt is very true. I did not read the article, but I wonder if it also tells you that you have many warranty companies who fail to do proper actuarial accounting.

What happens is that the worst of the mortality rates do not show until the product gets older. So, while they are experiencing low mortality rates as start-up companies having warranted new products with little use on them, they low-ball warranty premiums to ramp up sales.

Then, what happens is they experience a greater mortality loss based on the growing age of the products that are warranted. Then, they realize they did not collect enough premium (remember, a huge part of the premium is paid to the retailer as a commission and is not used to actually adjust claims). Then, they go out of business.

[wuzzzer]

When I bought my computer from Best Buy the salesperson spent no less than 20 minutes trying to get me to buy an extended warranty for the computer. I'm really surprised I didn't just walk out and buy elsewhere.

Funny thing is, once he finally realized I wasn't going to buy the warranty, he then hauled out the printer that came bundled with the computer and explained why I needed to get the extended warranty on that...this time I didn't say a thing. I just stared at him with a look of disbelief. He got the message.

I helped a lady I work with buy a DVD-R camcorder on eBay and this company required you to call them to confirm shipping, payment, etc. Well it turns out they use this as an ideal opportunity to try and push an extended warranty, battery charger, other stuff that they probably marked up 1000%. I had looked at this seller's feedback and several people on there mentioned the high pressure tactics they used to do this. I warned her about it. Didn't help...$300 later she had bought the extended warranty, battery charger and a service plan that gave her one free cleaning every year for 3 years. I couldn't believe it. Funny thing was that she had to break it to her brother that he needed to spend an additional $150 on the camera since they went in on it together.

[Guest " "]

Here's a good link about extended warranties and stuff.

I for one seldom gets 'em (except for my DLP TV when I got it).  When ever you buy some electronic stuff or what have you, geezeeee, those sales personnel give you a bleak outlook on what you are purchasing making it look necessary that you really need EWs.

Excerpt below....

By the industry's own calculations, Strasfeld is right. Warranty Week,

an industry publication, last year estimated that of the $15 billion in

premiums charged consumers in 2004, $7.5 billion went straight into the

pockets of the stores that sell warranties as their cut.

Same could be said about car insurance. I pay insurance on 5 cars, been drivng for 30 years, never filed an insurance claim.

Consumer warranties is an intresting subject. Used to sell them. Until recently, never bought them. What changed. Bought all my kids new Mac's, I insisted on the warranty as well as the additional cost of permium support. Adds about 20% to the purchase price. All 3 of my kids have used their warrenties for one reason or another. They pick up the phone, call a Mac genius, make and appointment (usally less than 24 hrs), bring in their computers, and watch the issue get resolved while they wait. Best of all, issues are resolved with out my involvement.

[colterphoto1]

Insurance is nothing more than legalized gambling imho. If you can afford to pay for whatever catrophobic event it is, do not purchase insurance or warranty. If you cannot afford to do without the item should something terrible occur, you might want to consider it.

I'm shocked that sales people would spend as much or more time convincing purchasors that the item in their hands will become faulty soon and therefore they need more warranty. If that's all a seller thinks of his goods, I will go elsewhere.

I NEVER purchase extended warranties.

Insurance companies are like the house in Vegas, the odds are always in their favor. Look at any major American city. Who owns the biggest buildings? Insurance companies.

Michael

[oldtimer]

Excellent point Michael. The only insurance most people need is term life, housing, and mandated car insurance.

[colterphoto1]

Excellent point Michael. The only insurance most people need is term life, housing, and mandated car insurance.

yup, that's all I'd get, maybe add health or long-term care to that mix.

in most states the mandated car insurance isn't really enough though.

I prefer to protect my assets with a large umbrella policy that covers my business and liability.

And I don't have life, because I have no dependents and enough cash to buy a pine box.

[oldtimer]

You have it pretty sound. I tried to not get too technical with additional details.

[Jay481985]

everything has a "life expectancy" usally 3-5 years for most comsumer items.

[Jay481985]

Same could be said about car insurance. I pay insurance on 5 cars, been drivng for 30 years, never filed an insurance claim.

Consumer warranties is an intresting subject. Used to sell them. Until recently, never bought them. What changed. Bought all my kids new Mac's, I insisted on the warranty as well as the additional cost of permium support. Adds about 20% to the purchase price. All 3 of my kids have used their warrenties for one reason or another. They pick up the phone, call a Mac genius, make and appointment (usally less than 24 hrs), bring in their computers, and watch the issue get resolved while they wait. Best of all, issues are resolved with out my involvement.

Heh they got you [] I worked at one of the retail stores.... we have the same policy as mentioned above with bestbuy and their sales pitch. Its not our faults, the manager pushes it and the manger pushes it cause corporate. I had one customer who I had the notion she was not going to buy it. A manager I disliked went, what is your problem? Then she personally went and harassed the customer, the customer went something along the lines that atleast the other person didn't push it, what is your problem?

Also I hate the apple support. Why, cause they find people who do not know how to fix them to answer the phones and if its a hard question, they call our store or the store that it was purchased at and bother us (even though we are not supposed to answer) and hence you got the Mac Genuis (Mac Genuis are instore and are not supposed to be bothered by phone calls, its not that they are a holes but if you have work and then have to answer phones the system breaks down, that is what tech support is to answer questions but they lack training) But glad everything worked fine speakerfritz