MORONS!!! (Language)

[JustADude]

Excuse me, but what does car insurance have to do with Extended Warrentees? It adds no value to the vechicle. Is it really needed for this conversation?

Honest mistake, but he was talking about homeowners insurance, not automobile, as demonstrated here (Emphasis mine, of course):

Additionally, some credit cards or home insurance policies have better extended warranty...

[Can I Help Your A$$?]

Is car insurance a scam then-I mean you hardly ever use it, it's $100 or more a month, and if your car gets damaged it can take weeks to get it back

I have a friend who is a car insurance salesman, and a math-savant, and yes, in many instances, the insurance people buy is nothing but a money-loser. We talked about this for 2 hours on a show I did once, and he explained why, for most people, the only thing they need is the legal limit. Not that it's a "scam," per se, but a losing gamble.

[Samaliel]

Not that it's a "scam," per se, but a losing gamble.

A gamble that you even hope to lose.

[The Gatekeeper]

Car insurance etc. is insurance, pure and simple.

These product protection plans, certainly appear to be insurance. However, one major difference between the two is that the insurance industry is regulated. Extended warranties are not. I am not going to get into a debate about the occasional bad apple in the insurance industry. We all know that there is always someone that has to try take advantage of people, regardless of the industry. That includes retail.

Now when it comes to the extended warranties, PPP, whatever they are called, they do have a bad reputation, and sometimes it's deserved. It depends on the company. Generally speaking (once again this is a generalization, not a specific example), it's the plans available from the retailers that have caused the most grief for people. The ones offered by the manufacturer's (Toshiba, HP, Apple) seem to have a better reputation. There are always cases when someone thinks something should be covered, but it's not.

As a consumer it is up to you to know what you're buying. Most stores will allow you a grace period in which to purchase their plan. I advise take the time. Go home and do your research. Check the manufacturer, what do they offer? Check your home insurance, or your credit card company. They may offer something too. If what the retailer is offering seems like a good deal, take the time to read the fine print. It is a contract make sure you are away of all the terms and conditions.

When it comes to Sucky Customers, well we know they don't read, and are always looking for a way to come out ahead. They suck, and deserve what they get.

[RetailWorkhorse]

I hate people who don't get insurance for their cars. They tend to be the most reckless drivers.

Guess you hate me, then, because I don't have insurance. Simply can't afford it on 18 hours at Minimum wage after putting 60$ in the gas tank every week and paying for food (living on Ramen again), while putting 10$ into a savings account so I can move someplace else to get a better job.

I'm also NOT a reckless driver. I slow down when the roads are wet or icy and always stay at speed limit (sometimes 2 or 3 below). If I don't have work on a particular day then I stay the hell home or walk.


Dad had bought a massive (52" wide screen) tv for EQ, Mum, and I a few years ago for a Christmas present. I don't know whether or not he sprung for the protection plan, but we haven't needed it. It's unplugged during storms and whenever we leave for more than a day.

[Lachrymose]

Wow, I didn't realize there were still states where car insurance was an option.

Anyway, extended warranties, as well as all other types of insurance are just forms of legalized gambling, to oversimplify.

Basically, if you can afford to fully replace an item, you shouldn't buy the extended warranty, as chances are very slim that you would ever have to use it.

Yes, I realize that there are people here stating they have had to use it before, but it's still a pretty small sample.

[kzc]

The protection plan is always a bad bet for the consumer. Every time. That's a bad bet, not necessarily a bad idea - you may perceive some value from having "peace of mind" by having that "protection", but your expected return will always be lower (ex ante, natch) by buying it.

The prices of protection plans are set based on actuarial analysis of failure rates, cost of replacement, etc. These actuaries are paid well to make sure that the plans make money for the seller, in the aggregate. I don't need my own team of actuaries to figure out that what's a good bet for them is a bad bet for me - I just flip the sign of the expected return.

Of course in any given instance I might get burned when my laptop/TV/PDA fails and I don't have "protection" - doesn't mean I didn't play the odds correctly, just that I got a bad break. But in the long run, over a lifetime of buying gadgets, I'm very likely to come out ahead by takesin' my chances. And aggregated over the whole population, the numbers get large enough to be statistically certain that more people come out ahead than behind by so doing.

All of which is to say, the OP has it backwards - the only reason to buy a protection plan is if you're math-challenged and/or highly risk-averse.

[Lachrymose]

Agreed. Just like any betting game, in the long run the house always wins.

[Gravekeeper]

I have never in my life had to send anything in for warranty/repair. Ever. I don't know if its good karma or just because I take good care of my shinies, but I've never had too. On the very rare occasions something blows in my computer its always something I was expecting to fail soon so its no big deal if it goes since I was planning on replacing it anyway and have plenty of back up parts around.

But yeah, its a losing bet.

Futureshop once tried to offer me a $12 three year service plan on a $9.99 pair of mini computer speakers I was picking up for a coworker. I was really impressed she managed to keep a straight face when she asked. -.-

[QASlave]

I've never gotten screwed on one, except for maybe the fact that it was never used, but I guess that's a good thing.

I bought a brand new Mercury Mountaineer in 1998, they wanted $1,800.00 for a 7 year, 100,000 mile extended warranty. I talked them down to $800.00 for it and they would wave the $100 deductible.

I traded it in in 2005. I went to the folder where I kept all the receipts for that car and would you care to guess the amount charged for repairs under the warranty? $12,583.63.

Best $800.00 I EVER spent.

[reimero]

As with all things, it depends.
Extended manufacturer's warranties can be a good thing, but I don't trust store protection plans as far as I can throw them. I've seen too many people get burned. That said, I paid for a manufacturer's extended plan when I bought my laptop, because I was familiar with the company and what the extended plan provided.

All that said, there are very valid reasons why someone would purchase a $2000 TV without getting the extended protection plan. I'm one of those people.

[Lachrymose]

Yup. And OP, despite your good intentions (which I do believe are indeed good), it's really none of your business why they choose not to spend their money on it.

And calling them morons and idiots is waaay out of line.

[The Gatekeeper]

I've never gotten screwed on one, except for maybe the fact that it was never used, but I guess that's a good thing.

I bought a brand new Mercury Mountaineer in 1998, they wanted $1,800.00 for a 7 year, 100,000 mile extended warranty. I talked them down to $800.00 for it and they would wave the $100 deductible.

I traded it in in 2005. I went to the folder where I kept all the receipts for that car and would you care to guess the amount charged for repairs under the warranty? $12,583.63.

Best $800.00 I EVER spent.

Once again that is offered by the manufacturer, not a 3rd party reseller, which (for example) a big box electronics store is.

Exactly right to the posters that said it was a gamble. There's the gamble that you may or may not have a problem with your product that is not covered by or during the warranty period. You're gambling that the problem that does happen will actually be covered by the plan. You're gambling that the store (in the case of store based plans) is doing well enough with their P&L that they aren't going to try and reject your claim as way of protecting their bonuses. You're gambling that the repair house will actually repair your product the first time.....You're gambling that I am actually going to stop rambling.....

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I'm done

[Enjis]

I just want to chime in on the car insurance issue...
Car insurance is not so much to protect you and your car, it is to protect OTHER people and THEIR cars and property. (you can opt for the cheapest form of insurance, the kind that covers injury and loss of property to others...and leave out anything that covers damage to your own car. I did that on my old junker.)

It is not required because the state is interested in you getting your own car repaired, it is required so that if you hit and injure someone, or cause huge amounts of damage to someone else's property, that expense will be covered by your insurance company.

Not really the same thing as extended warrenties, where the only one suffering because of its lack is you.
That being said, I seldom buy extended warrenties either....but if the item is complex enough, or expensive enough, I may consider it. (anything expensive had better have a good manufacturer's warrenty tho!)

[real people person]

I've heard that when people have their houses burgled, the thieves will often wait a couple months then hit them again, once the insurance replaces all the stuff. never heard about the salesmen selling to thieves, though, the bastards.