What are your thoughts on extended warranties

JeffreyG wrote in post #7986598
An extended warranty is simply a form of insurance, though most extended warranties as offered from stores have relatively high premiums vs. the insured value.

So here is the best way to consider insurance:

You should only insure items that you really cannot afford to lose. Houses tend to be an obvious choice for most people as few could sustain such a loss. New cars - insure. Older cars....generally no.

Another take is that the less money / savings you have the more insurance is a good idea for you.

You also have to consider the possibility that the third party insurance company may ITSELF go under, which leaves you with the very real situation of paying for coverage that goes away when the insurer goes away.

Throw in also the evidence that many of these same third party insurers have a vested interest in denying your claims so that they don't have to pay out.

For the majority of electronics out there getting an extended warranty is not a good idea; generally, most new electronics, if they die, will tend to die within the first three months of usage ("infant mortality"), and should be covered under the manufacturers warranty. If they get past a year, they'll tend to last at least three to five years, at which time it'll be cheaper to replace it out of pocket. The insurers KNOW this, most people don't.

The primary idea behind third party insurance is to make money for both the insurance company and the retailer that sells the item warranted (for them, it's pure profit). They're in effect profiting off the odds that your insurance term will expire without you making a claim.

However, if you don't want to add it to your homeowners insurance; you can go this route, but you better make damn sure you check out the history of the company that issues the policy and their reputation before you do so.

Why yes, I do have an extended warranty-on my USED M45. An Infiniti warranty, not third party. When I bought the car I cut them a check for nearly $3K...if I NEVER use the extended warranty, within 60 days of the 5th year of the warranty ending I have a word with Infiniti and they send me back a check for the amount I spent...and that's a deal! (Do I expect that to happen? With all the electronics on this car? Oh, HELL no...:p:lol

Rachel,

"Lowner of course the company expects to make a profit, thats how all business work, but they make they dont make there money by stiching people over if they need there item replaced, they make there money from the people who end up not needing to claim".

I did not intend to imply that the companies are doing anything wrong, just that there is a profit to be made between the scheme running costs (including any repairs/ replacements) and the income generated.

I agree, we are very lucky to live in such a photogenic part of the world.

I wouldn't go with extended warranties, insurance seems like the way to go,

With theft cover and less hassle, why not

~Josh

The Ghost of FM wrote in post #7987476
My Visa credit card automatically doubles the manufacturer's warranty up to one extra year and covers accidental damages.

Have you ever actually had a claim successfully covered through that, though?

some credit card only covers the item when there is a balance outstanding.

anthony11 wrote in post #7990552
Have you ever actually had a claim successfully covered through that, though?

No, I've never had to make a claim yet as I haven't purchased anything with it that has ever required service and that included all of my camera gear with the exception of my 1DsMkII which I purchased second hand on Craig's List and that too has been flawless. That's why I also mentioned that I try my best to purchase items that already have a good reliability history. The card is a "no annual fee" type so it's not like I've lost out on not having to make a claim.

Cheers!

DeaconG wrote in post #7987866
You also have to consider the possibility that the third party insurance company may ITSELF go under, which leaves you with the very real situation of paying for coverage that goes away when the insurer goes away.

DeaconG wrote in post #7987866
Why yes, I do have an extended warranty-on my USED M45. An Infiniti warranty, not third party. When I bought the car I cut them a check for nearly $3K...if I NEVER use the extended warranty, within 60 days of the 5th year of the warranty ending I have a word with Infiniti and they send me back a check for the amount I spent...and that's a deal! (Do I expect that to happen? With all the electronics on this car? Oh, HELL no...:p:lol

Those two statements seem to be in direct competition with each other especially considering the current climate where car manufacturers are disappearing. Even their filing for bankruptcy would probably have a negative affect on it. Not saying that it would happen, just that it could. It's hard to know which companies to trust.

DeaconG wrote in post #7987866
Throw in also the evidence that many of these same third party insurers have a vested interest in denying your claims so that they don't have to pay out.

Car warranty companies can be just as sneaky. I've had BMW and MB deny claims - both were overturned. But, it does happen.

dan

alt4852,

"i suppose you also took a pass on car insurance"?

That's different, thats got legal impications. But over a lifetime of refusing these extra costs, I am now far enough ahead that if the worst should happen, I could afford to loose a cooker, or a fridge, or my 30D, OR........... and still be ahead on the deal.

Here in Britain we have had some well publicised failures of the very companies supposedly providing the cover, and it was not always the companies people thought they were dealing with. Guarantees are only as good as the business offering them.

Extended Warranties are a money making scam, plain and simple.


Dave Ramsey has a good take on it, if anyone ever gets a chance to listen to his financial course.

Insurance is best for accidental damage.. but will not normally cover failure.
I took out a 7 year mac warranty on my 17 55 2.8 as the chances of it failing in that time is quite high. (cost only a promotional £50)
Mac warranties are not easy to claim on, but worth the effort....

Lowner wrote in post #7986336
I would not touch any extended warranty product with a barge pole, ever.

The company selling it to you is planning to make a profit, need I say more?

Yep

I got the Best Buy extended warranty on my 40D, just as a precaution since I knew I'd be traveling with it. Later on, when something happened, I brought it back to Best Buy. No questions asked, I got my camera back 6 days later in perfect condition.

For that reason alone - I waited for the 5D2 to be in stock at Best Buy to get get one. While I could have gotten it at B&H 2 months earlier, I really like having the insurance that if anything goes wrong - they have no problem fixing or replacing it.

True - they cover EVERYTHING except theft. And yes, while B&H offers a similar warranty plan, when I move, I know there'll be a Best Buy where I can go to locally rather than having to ship the camera back to NYC.


PS: The Best Buy Warranty is transferable. When I sold my 40D, the warranty transferred to the new owner at no cost.

Also, I have all my gear insured with Allstate in case of theft

I never buy extended warranties on any electronics. Total waste of money IMO. I've never had to claim a warranty because I buy quality items with excellent track records and take care of my things. In my experience, the warranties are usually 20-25% of the MSRP and I'm usually barely able to afford the item itself! I'll take my chances thank you very much.

Like any insurance, it's only worth it when you need it. And then it's only worth it if it actually covers the necessary repair or replacement. So many exclusions on some.