Don't Buy Warranties For Your Gizmos, Says Consumer Reports

The executive editor of Consumer Reports spoke to Newsday about warranties and service plans for consumer electronics, and how it’s pretty much always an unnecessary add-on that you should avoid. The stories that make it to the Consumerist are usually the exception; in reality, it’s rare that consumer devices break before you replace them anyhow.

When asked whether or not it’s important to buy a warranty simply for “peace of mind,” he replies:

To the peace-of-mind argument, you can buy insurance on all sorts of things. We would urge people, for true peace of mind, to make sure they’re insured for big things in life. It’s better to have life insurance before they insure appliances.

Because the profit margins are so high, sales people will continue to push warranties and service plans aggressively. If you’re a sucker for the hard sell, read this post for ways to protect yourself on the sales floor, or buy online: “We know in particular that people who buy online are less likely to buy extended warranties because they don’t have a salesperson in their face.”

“Q&A: Shopping for high tech” [Newsday]
(Photo: natecull)

Comments

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  1. eelmonger says:

    In general I agree, but for certain things with known high failure rates *cough*Xbox360*cough* it can be worth it.

  2. vaxman says:

    Your home internet router is an EXCELLENT example of a device that you should buy the warrenty, only the 2 year though. I’ve only seen 2 routers last longer, the rest all crap out and die. My last one died in 4 months, but I think repeated brownouts from our crappy energy provider was the cause. either way, for 2 years, i get a free router when ever it dies.

  3. Veeber says:

    I’ve had my current router for over 2 years now. I’m only getting one soon so that I can upgrade to N. I’ve never really had a problem otherwise.

  4. AnnC says:

    If your router is crapping out, perhaps the router is crappy and you should get a better router (also applies to game consoles).

    I believe Homer J. Simpson said it best:

    Extended warranty? How can I lose? (as a crayon was shoved into his brain via his nose)

  5. MrEvil says:

    The only product I think the extended warranty is worth it on is a Laptop computer. If you’re in college and a party animal, accidental damage coverage is also good to have. It doesn’t take much to break on a Laptop before you’ve reached the price of a new laptop. I personally won’t buy extended warranties on anything else. Desktop PCs though don’t cost alot to repair so fixing them is often worth it.

  6. clevershark says:

    I’ve never had trouble with internet routers. They have no moving parts, so unless one buggers up the firmware upgrade process it should either fail right away or run forever…

  7. DallasDMD says:

    I’m on my 3rd laptop since starting college, and its not because I wanted to upgrade; its because they keep breaking!

    I second @MrEvil‘s comment reccomending a warranty for your laptop. Even if you treat your laptop well, it still seems like that normal wear will cause them to die out within a couple years or less.

  8. DallasDMD says:

    @AnnC: The problem with consumer electronics is that the quality seems to be getting worse and worse. Since things are becoming so cheap (the reason why they suck to begin with) people just accept their devices as disposable and buy a new one when the time comes.

    I’ve had problems with SOHO routers/switches crapping out. Too much garbage out there.

  9. AnnC says:

    @DallasDMD: Many consumer grade routers will only last a couple years; there’s no moving parts but they do tend to overheat. They may work better if you provide lots of airflow. Or you can try the commercial grader routers. They may cost less than the consumer router with extended warranty.

  10. velvetjones says:

    I have listened to many Best Buy earnings conference calls and I can tell you that this always comes up because extended warranties are PURE PROFIT.

  11. Eilonwynn says:

    I’ve bought only two extended warranties in recent history – one was the completecare warranty offered by dell (had the entire machine replaced TWICE before the thing was up) and on my printer. it’s $10 to get an extended warranty on a $100 printer at staples, and i’ve had printers replaced 3 times on it – one when I was trying to print a crucial term paper. I prefer words like “no hassle” – the last time I walked in 10 minutes before closing, dumped the printer on the sales desk, and said “printer no worky, gimme new one now”, and the saleswoman laughed and started processing the refund wile I picked out a new one.

    I figure everything else is covered by my credit card’s extended warranty.

  12. @eelmonger: and yet people keep buying it… Something wrong there or are these people just not thinking straight?

  13. XTC46 says:

    I work for an electronics store. My rule is if its a REPLACEMENT plan I will get it, if its a repair, I wont. A replacement plan is great becasue at the end of the warranty, you can make up some “intermittent issue” and either get the unit replaced, or just get a credit and get a newer model.

  14. CurbRunner says:

    I heard a consumer reporter on the radio the other day who also said not to buy warranties for any electronic items with the exception of HDTV’s.
    He said HDTV’s have a very high failure rate that would justify buying the warranty.

  15. Zombietime says:

    I have a toshiba 40h80 high def rear projection and it’s lasted me 5+ years with no problems at all. Granted I don’t watch a lot of tv but it’s been a great set. Like someone said, you either get a good product that lasts or a bad one that craps out on you right away.

  16. JayDeEm says:

    I generally avoid the extended warranties as well. There can be exceptions though, like our digital camera. We have already had the camera replaced twice at no cost, which winds up being a free upgrade since they evolve so quickly.

  17. Parting says:

    Replacement plan are often worth for electronics like inkjet printers, who tend to die couple of month out of 1 year warranty. Or PDA (only if accidental breakage is covered ;). Cellphones, too, saves a lot of hassle.

    However I don’t believe in extended repair warranties.

  18. darkclawsofchaos says:

    … the closest thing to a warranty I ever bought was a membership card at costco for 40 something dollars, and pretty much everything is guaranteed and very minimal hassle, I even seen people return plasma TVs and Xbox 360s a year later, this is the best and only waranty I approve of, the rest is a waste of money

  19. yahonza says:

    Generally, I agree. But I got the plan for the iPod I bought a couple of years ago, and it was well worth it, as I have had it replaced (completely hassle free, BTW), at least five times.

  20. Phildawg says:

    You know, if products broke so frequently that is wasn’t highly profitable to sell extended warranties… the insurance companies wouldn’t offer them… lol.

    There a life cycle for a product called the ‘bathtub curve’. This is used to show when items began to fail consistently and when insurance companies and manufacturers should stop warranting said products. An item failing under even an extended warranty is quite rare, and if it does, you can be sure you are an ‘anomaly’ because if you were the norm, companies would be STUPID to warrant it.

  21. TWinter says:

    I always wonder about people who have so many things break – is it bad luck or are some people just harder on stuff.

    I bought a Samsung MP3 player that went dead about two hours out of the box, but other than that I can’t say I’ve had many problems with electronics. I’ve sometimes wound up wishing things would go ahead and die so that I would have a good excuse to upgrade.

  22. DallasDMD says:

    @Phildawg: They’re engineered to be more likely to break whenever the warranties run out. That seems to be the case I have noticed.

    You can pay more for extended warranties, but they cost a significant portion of the actual item’s cost. Sure, the warranters have a lot to lose if their products break. Its a calculated risk in their favor.

  23. The Stork says:

    @Phildawg: I wouldn’t go so far as to say it’s “quite rare.” (Nor would I say “OMG WARRANTY IS YES~!”) Working at both BBY and CC for five years I saw many instances of people covered by warranties that wouldn’t have otherwise been able to get help. This isn’t to say that you should always buy them, but it’s equally silly to dismiss them out of hand as well. Each warranty should be judged on its price vs the price of the product, the odds of the product failing, how you’ll use it, how important it is to you and your ability/cost to repair. I’d say most of the time the warranties, especially on cheaper stuff, are unnecessary, and I rarely buy them myself. But there are instances when they help.

  24. dasunst3r says:

    I actually have stopped buying extended warranties. Apparently, I’ve had some very good luck with my electronics as they last at least two years. I had a Dell Inspiron 6000, and besides the battery going dead on me once every year, it’s still living to see a second user (i.e. my little brother).

  25. agb says:

    fyi – from Consumer Reports:

    There are two caveats to our just-say-no advice. It’s worth considering an extended warranty if you’re buying a rear-projection microdisplay TV. Repair costs can be high, and these sets have been three times more likely to need repairs than other types of TVs. We also think it may be wise to get an extended warranty (which includes extended tech support) if you’re buying an Apple computer, because they come with only 90 days of phone tech support.

  26. XTC46 says:

    @Phildawg: I think this is true a lot of the time. My company bought a bunch of IBM t41s just over 3 years ago, and with them they bought the 3 year warranties. 5 have broken within a month of the warranty ending.

    but something like 30% of electronics flake in the first year so to say they are rarely breaking is wrong. But I agree if warranties were not profitable they wouldnt be around.

  27. marsneedsrabbits says:

    No insurance on our router – even though our provider heavily pushes having you buy it (& insure it), you can actually rent it in most cases. They’ll tell you that it’ll be cheaper, but it isn’t.
    I pay 30 dollars a year to rent the router, about the same as the insurance. But I paid nothing to buy it, and the result is the same – they replace it immediately when it breaks.
    I get a new router whenever I need one and since it is rented, they don’t require claims. I call them & either bring it to the office or they replace it at my front door.
    I think I’ve replaced it twice in the last couple of years, so it has really been worth it.

  28. agb says:

    oh also:

    There are just two instances in which you might want to consider an extended warranty. One is for a rear-projection television set. Our data show that about 10 percent of rear-projection TVs bought new in 2005 or 2006 needed repair, three times the rate of picture-tube and flat-panel sets. A common problem: bulb failure. The median cost to repair these sets out of warranty was about $400. The cost of a replacement bulb is about $200 to $400, and the typical extended warranty covers one bulb.

    The second exception: Apple computers. And it’s not because Apples are trouble-prone. We recommend the extended warranty because the company offers only 90 days of telephone tech support. Most other manufacturers give you a year. After 90 days, you’ll pay $49 per incident to call the Apple to help resolve any problem.

    :-)

  29. TMurphy says:

    I’d say, if you can’t afford to replace it, and can’t live without it (or really don’t want to), get the extended warranty. I agree to get it on things like laptops and nice tv’s, too, but otherwise average product lifespan should play out with enough life cycles that the duds get balanced out by the exceptional ones.

  30. Phildawg says:

    @xtc46: wow I just read my previous post, sorry for the poor grammar! lol, I’m dreary eyes with all the BF online shopping going on right now…

    Anyways, there are actually 2 sides to a bathtub curve, the beginning is just as bad as the end =) Unfortunately electronics are not like cars… haha, all automobile manufacturers generally try to drive every single new car between 3-5 miles when it rolls off the line. They are then able to catch all the noticeable falls before they get into customers’ hands. Electronics, you are lucky if they test a batch every day =) to try adn catch major reoccuring screw ups on the line.

    So items failing quickly after initial use are quite common, but this is why there is a manufacture warranty. Unfortunately the bullshit you deal with at BB and CC is completely out of hand. Manufacturers absolutely hate these retailers as they will fully credit stores for all exchanges under manufacture warranty. However, most stores are to lazy… and if they replaced the items so easily, not as apt to sell their high profit service plans!

    I should note that I have 2 perspectives on this, I was in the geek squad for 5 and half years, and I have been studying for one of the hottest degrees, system reliability engineering. These engineers actually help companies design their products to fit nicely into the bathtub curve so that the company can do as few replacements as possible, and have you re-buy the product quickly after the warranty is up.

    Hope this clarifies a little more.

  31. BigNutty says:

    Extended Warranty’s = Rip Off.

  32. HOP says:

    when they try to sel;l me an extended warrenty on something ,i ask them it the article is gonna fall apart after the regular warrenty is up….with electrical stuff, i let it on for about a day….usually electrical/electronic stuff ,if it’s defective, will crap out almost right away…..

  33. HOP says:

    oh, by the way…happy thanksgiving everyone……….

  34. balthisar says:

    Consumer Reports still recommends extended warranties for plasma and LCD TV’s, right? At least they used to. I bought one for my LCD at Sam’s Club. TV stopped working after 13 months, so I returned it Sam’s. They refunded the warranty completely. I bought another set that very time, and bought another warranty. It was a heck of lot cheaper, since TV’s were a heck of a lot cheaper, but I figure I’ll either use the warranty, or Sam’s will refund it.

    FWIW, my current router is going on eight years. It was the very first Linksys broadband router.

  35. nrfx01 says:

    Ok, so after reading the helpful article over at consumer reports, and reading the comments here; I should never ever ever buy the extended warranty, because its not worth it 99% of of the time. Except for, routers, game systems, printers, laptops, computers, televisions, scanners, and cd players.

    I’m not supposed to buy what for what now?

  36. vaxman says:

    @AnnC: nose, thats for losers. I’m a big fan of the left ear.

  37. mercnet says:

    I found it odd that when my Dell Laptop warranty expired, my computer fan and hard drive went. Luckily I extended the warranty, but I feel like companies design their products to fail a week after the warranty.

    Another example, two of my friends have the same model Lexmark printer, both of them failed two weeks ago and both printers were bought in the same time frame, 3 years ago.

    It’s all a scam!

  38. shawnj says:

    Balthisar – CR has stated there there is no significant levels of failure rates for LCD and Plasma TV’s, and therefore recommends not to buy an extended warranty on them.

    CR’s recommendations are sometimes a little weird. For example, even with a 16-18% failure rate over the course of 2 years CR won’t recommend an extended warranty on the average PC laptop. Yet CR will recommend extended warranty on an Apple laptop (with a 16% failure rate) because there is “only 90 days of tech support”.

    Most of the time your best bet is to simply have a credit card which automatically doubles manufacturers extended warranty.

  39. acasto says:

    I generally never buy extended warranties, but did get the three year protection plan with my T60p Thinkpad. For a desktop there really isn’t a need, or even for a laptop that just sits there all day like my last one. But if you are one to really “use” the laptop, and it’s a quality laptop (not this $499 crap you see at BB), then if the plan is reasonably priced and reputable in it’s handling of situations, then why not? I guess in general I don’t even consider the ones from retail outlets or third parties, but will at least look into the options from the company itself (like Apple, Dell, Lenovo).

  40. vastrightwing says:

    Best Buy be aware! They won’t ever cover your warranty. Instead, they’ll find every excuse not to live up their side. Example: camera has ding on case? You dropped it voiding the warranty. Hummm… Serial number faded off? Won’t cover it because no serial number, etc. etc. I’m taking them court over this. So yes, Best Buy makes a TON of money selling worthless warranties because they NEVER pay anything out. Great business model I’d say.

  41. theycallmetak says:

    BBY extended warranty on washer/dryer. New belts and heater I think? On site repair. – Honored

    BBY extended warranty on 27″ tube TV. Flyback transformer and circuit board. On-site diagnosis. Replacement. – Honored

    Olympus C-5060 mode dial. New Mode dial, logic board, CF housing. – Honored

    HP extended warranty (Housecall) on desktop. Bios corrupt and DVD burner crapped out. Free shipping both ways. – Honored.

    Toshiba extended warranty (incl. Accidental Damage) – Have not had to use it yet but I’m covered for three years.

    Best Buy had no issues when I needed service or in the case of the TV, replacement. But I also didn’t pour Coke through the vents, drop it and claim it was defective, or act like an ass about the whole thing before anyone had a chance to help me.

    I plan on purchasing one for the new fridge and water heater we’re getting. Goods are being made cheaper with lower standards for quality. Whether this is due to actually engineering them to break after warranty or if it’s just due to the poor QC doesn’t matter. Is it just me that finds it ridiculous that you can buy a $3000 dollar refrigerator or range with only a one year warranty? That year is up and you’re screwed. The cost to replace a burner is roughly $120 for the parts alone on a modern, glass top range. My uncle does appliance repairs and he’s NEVER out of work. For the big appliances or expensive ones, go for it. For the smaller stuff, YMMV.

  42. RvLeshrac says:

    @Phildawg:

    Stores don’t exchange on manufacturer warranties because the manufacturers NEVER PAY UP.

    I have seen motherboard after motherboard after motherboard after motherboard returned by the vendor as “working,” yet they only “work” under ideal circumstances – meaning that you’re buying one of the three part numbers of DDR that they’ve tested the board with.

    In the case of laptops, HP will do things like solder on new components, rather than replacing the motherboards. I’ve seen them charging the stores for repairs that would be covered, easily, under a consumer’s warranty.

    ASUS is a big offender on the motherboard thing. The boards won’t even report a memory failure when you insert bad RAM, so it becomes a scavenger hunt to determine whether or not it needs to go back.

  43. RvLeshrac says:

    Oh, and certain plans (plans which cover accidental damage) are great for portable devices.

    If you do anything that damages the screen on your notebook, you’re counting on a repair that is, at minimum, half the original cost.

  44. crocker says:

    What about Lithium Ion batteries in laptops? A standard laptop warranty rarely even covers them. Often they’ll try to say it was from normal wear and tear and not manufacturing defects. Plus, not to mention the insane markup laptop manufacturers put on it. Most of the replacement plans you buy are about the same price of the battery anyway. And I don’t think anyone at Consumer Reports has ever owned one of those $499 bargain Toshiba laptops that seem to break once every 3 months. Most plans on those are about $79 and up. Seems worth it to me. I’d like to keep my laptop for longer than a year.

  45. kromelizard says:

    If you buy insurance for things you can afford to replace out of pocket, you are an idiot.

  46. suburbancowboy says:

    Depending on the price of your plasma or LCD tv, it may be a good idea to buy the extended warranty. However, now that the prices are dropping on the displays, by the time your normal warranty is up, you can almost buy a new better set for the same price as the warranty alone.

    If you buy a high end set though, the warranty is a good idea.

  47. bbbici says:

    I just bought a new cellphone yesterday. The 3-year warranty would be $50. The phone was 75$ after rebate. The phone came with a one-year warranty. If the phone dies, I’ll just buy a new one, duh!

  48. UpsetPanda says:

    I bought insurance for my phone, because I have small hands and tend to drop my phone a lot…since it’s the chocolate, the glass front makes it a tad susceptible to cracks if it takes a tumble down the stairs. I got a warranty on the Wii past the Nintendo warranty because it’s probably going to be used a ton, and if anything should go wrong, we know it will go wrong pretty much right after the regular warranty is void…it’s like there’s a sensor inside that just makes stuff crap out.

    I skipped warranties for any of my cameras because even though I’ve taken one of my cameras to Europe twice, and across the country once, I take care of it. It even gets tossed around in my purse and functions quite well.

  49. TrinKagen says:

    I work at a retail store and I have seen on many occasions where ppl do not buy the warranties and wish they did. We acctually give the money back towards whatever including tax if the original product breaks due to normal wear and tear or manufacture defect. I seen a ipod brought in just a few months after the release date with no reciept and the manufacturer’s rebate was not honored because there was no warranty and no reciept. We fixed it by an in store replacemant knowing that we could get it fixed by them but if not for the store making the effort he would have been out of luck.

  50. I am a certified apple portable and desktop tech, and BEG parents who buy laptops for their children to get applecare with it. For $180, it definitely pays for itself. Even though it doesn’t cover abuse, things like logic boards, hard drives, etc, cost an arm and a leg to replace

  51. dvdchris says:

    @vaxman: a warranty for a $40 device?? I’ve had the same Dlink for 3 years. What brand is crapping out on you that much?

  52. RvLeshrac says:

    @discounteggroll:

    At least, it would if Apple didn’t blame the consumer for everything that goes wrong with Apple products.

  53. ViolentAcres says:

    @eelmonger: Amen. As much as I hate Best Buy, my girlfriend’s son just replaced his 16-month-old XBox 360 with no hassles.

  54. stevgex says:

    While generally never buy an extended warranty for anything, I have made exceptions for items which are hig dollar value (at least to me)and have a high potential to be damaged. I get ‘replacement’ plans for anything that happens to them. MY dog recently chewed up my ipod and I had purchased a replacement plan for it. Since my model was no longer availible(gen.iv 30GB), I ended up with a bigger ipod(the 80GB ipod classic), money back on the price difference and money back on prorating the warranty. I also ended up with $25 in credit and a new warranty. Ended up being quite the deal. If its just a repair plan or it is an item not likely to be damaged through regular use, I avoid them like the plague.

  55. wellfleet says:

    I have had the opportunity to research returns under my company’s service plans by model number. I looked up the Samsung LCD we sell the most of, as well as the LG washer we sell the most of. Naturally, popular items will have more recurring issues, but there were literally hundreds of return authorizations issued under service plan agreements. There were issued for various reasons, from items being not cost-efficient to repair, to lemons, etc. Many of these were long after the one-year manufacturer’s warranty.
    My mother-in-law still has her Magic Chef harvest gold appliances and they work great. They don’t make things like that anymore. Instead, cheap-ass parts from China are assembled in Mexico and banged around in containers for weeks on a boat…
    If you don’t insure high-dollar items, it’s the same as going without health insurance when you’re young because if you get sick it’s surely going to happen when you’re very old.

  56. @RvLeshrac:

    and where exactly do you bring your apple products in for service?

    Honestly, I would like to know. Are they an Apple Store, an Apple Authorized Service Provider, or from somewhere else?

    Input from anybody and/or anywhere would be greatly appreciated.

  57. SpaceCat85 says:

    @discounteggroll: Definitely try & go local before you go to the regular stores.

    Our family has bought bought 5 Macs (4 new, one used) at various points in the last decade from our local Apple Authorized Service Provider, and one of the Macs (a “Quicksilver” PowerMac) eventually had a couple of show-stopper hardware failures after lots of heavy use.

    We got personal attention from the person who actually does the repairs, didn’t have any issues while dealing with getting the parts replaced, and got the computer in question back ASAP :)