I was clicking through the New York Times online and came across an
article on warranties. Warranty sales are big
business and the Times suggests $15 billion a year. A lot of companies expect warranty and support sales to be
above 15-20% of their business (more if the market will bear it).
The key to any warranty contract is to read it and question it. Most places give you 8-10 days to buy the extended warranty after the purchase. My advice is to take the contract home and then research the product and warranty (if possible). See if other comsumers have reported problems with the same product. Even before you buy the product it is not a bad idea to shop around. Some retailers provide much better warranty, maintenance, and support than others.
Keep this in mind when shopping online at sites like Ebay or some of those low-priced camera clearing houses. You may save a few bucks and not have to pay sales tax, but what do you do when your camera breaks?
1. Warranty plans are simply insurance and insurance is big business. From my stint at a major electronics retailer, I learned that the extended plans were the largest profit margin area. In fact, when we were on commission, the warranty commission payout was 15%. Of course, the other thing I learned is that the warranty does not cover many of the things that can go wrong... especially with small portable items like a camera.
I have also found that my renters policy has an optional rider that will cover electronics, including droppage which is probable peoples greatest concern.
The extended plans may be great for your needs but like Garth said in the article, read the policy and make sure you are getting what you think you are getting.
Cheers!
Posted at 6:26AM on Dec 19th 2005 by Shaun