To buy a warranty or not to buy a warranty…that is the question. There are two schools of thought when it comes to warranties. There are those consumers who want peace of mind and spend extra money purchasing extended warranties and protection services. And there are those who think that buying an extended warranty is a waste of money. Instead of shelling out a monthly or annual sum for protection and coverage they probably won’t need, they’d rather save the money and use it towards any future repairs, on the off-chance they might need one.
Still, the ins and outs of warranties are tricky, and the fine print can be confusing. You might have a warranty on your cell phone, appliances, home and car, but be honest – how familiar are you with them? Are you certain that you absolutely needed to invest in that extended warranty offer? From understanding what a warranty actually does to utilizing preventative maintenance, here’s everything you need to know about warranties.
The Difference Between a Warranty and an Extended Warranty
Whether you purchase a smartphone, laptop, plasma TV, washer or dryer, all goods are sold with a standard manufacturer’s warranty. A standard warranty is typically good for a period of time (90 days, for example), and it may only cover particular parts or certain types of damage. In-store sales people, however, often push extended warranties. An extended warranty provides coverage against damage on a product for as long as you wish to pay for it. So, do extended warranties help you or are they just hugely profitable sales tactics that benefit retailers?
According to Glenn Derene, an electronics editor for Consumer Reports, extended warranties are not a good deal for consumers. According to Derene, “Many products are reliable and don’t break during the period covered, and the (extended warranty) plans cost as much as you’d pay for a repair that might never happen.” In fact, the Service Contract Industry Council estimates that consumers pay 10 percent to 20 percent more for an item by extending a one-year manufacturer’s warranty.
What Warranties are Worth the Extra Money?
Savvy salespeople will do almost anything to get you to purchase an extended warranty. Not long ago, extended warranties and protections plans were only offered on expensive appliances and other big-ticket items. Today, extended warranties are offered on almost everything. So, what warranties are actually worth it?
- Cars. Consumer Reports cautions against buying extended warranties on cars. Instead of buying an extended warranty, it suggests buying a reliable car and properly maintaining it. According to a 2014 consumer survey, 55 percent of owners who purchased an extended warranty didn’t use it for repairs during the lifetime of the policy.
- Appliances. Consumers can benefit from buying extended warranties and service plans on large appliances like washers, dryers, dishwashers and refrigerators. Appliances are built differently today than they used to be; many energy-efficient machines have computer boards and other expensive parts, so servicing these appliances when they break is expensive. An extended warranty on a large appliance can save you money.
- Electronics. While normal wear and tear is typically covered, extended warranties don’t often cover drops and spills, which are the two most common causes of smartphone and laptop destruction. Most extended warranties for electronics, including AppleCare, don’t cover theft of a device either. Before you buy an extended warranty on an electronic gadget, see what it covers. If the warranty covers spills, drops or theft, it’s a good investment.
- Homes. Homes that come with warranties may sell quicker and for more money than homes that don’t come with warranties, but are they really worth the investment? Consumers’ Checkbook, a nonprofit that provides information to consumers about vendors and service providers, says home warranties aren’t worth the extra cost. Instead, it recommends consumers put money into a home-repair fund.
- The 20 Percent Rule. In many cases, paying for a repair is cheaper than investing in an extended warranty. If a warranty is more than 20 percent of a product’s price, it’s probably not worth it.
How Can You Better Understand the Legal Aspects of a Warranty?
There’s a good chance you’ve collected warranties for a variety of products and services, and sometimes these warranties are written in complex legal jargon. If a warranty looks like a legal document, then enlist an attorney to help you understand the details. In the end, you probably have more rights than you may think. In addition, it’s important to keep copies of all warranties and to get any claims in writing for your records. Here are a few other things to remember about warranties.
- Review the warranty. According to federal law, you have the right to review the written warranty before you buy a product for more than $15.
- Lemon laws. Some states have lemon laws for new and old cars. If something can’t be fixed after a certain number of attempts, you might be able to get a partial refund. You can look up your states lemon law by visiting the Department of Motor Vehicles website.
- Credit card warranties. If you purchase a product with a credit card, some credit card companies will extend the manufacturer’s warranty on that product. Check with your credit card company before making a purchase.
How to Maintain Your Things to Keep Warranties Effective
After spending extra money on an extended warranty, the last thing you want is for a company to void that warranty. But this sort of thing happens, especially when it comes to preventive maintenance. Warranties can be voided in part or in full when consumers don’t follow suggested maintenance schedules or go against the manufacturer’s recommendations.
For example, a car warranty might be voided if you don’t use the proper fluids specified by the car manufacturer. Or, if you don’t have the oil changed according to the maintenance schedule and the engine seizes up as a result, the car manufacturer might void the warranty. The same holds true for a home warranty. If the warranty suggests you tak preventive measures on your roof every five years and the roof collapses because you didn’t follow the maintenance schedule, the warranty might be voided.
What Companies Offer Lifetime Warranties?
Many big retailers don’t offer lifetime warranties. Why? It’s simple: the retailers lose money. Whether it’s a smartphone or a car, retailers want you to replace the product or get the latest upgrade every couple of years. However, there are still companies that value quality, customer service and brand loyalty over the dollar. Here are some companies that offer lifetime warranties, ensuring your purchases have a lasting value.
- Aldi: A low price grocery store. If you’re not satisfied with your product, the store will not only replace the item, but also refund your money.
- Briggs & Riley: This luggage manufacturer will replace your broken or damaged bag for free.
- Craftsman: Get a lifetime warranty on your hand and power tools. However, you must show proof of sale and return the tools to the same retailer that you purchased it from.
- Cutco: The kitchen knife company will repair or replace your knives for free at any time.
- L.L. Bean: The clothing and outdoor goods company promises 100 percent satisfaction on every product, no matter how many years you’ve had it. You can even get reimbursed if you still have the receipt.
- North Face: The North Face promises lifetime warranty on all products besides footwear (covered for one year after purchase), eyewear, bicycles and outlet-sold products.
- Tupperware: The plastic storage container company offers a lifetime warranty against chipping, cracking, warping or peeling.
- Zippo: The lighter company offers free repairs and replacements on its windproof and butane lighters, hand warmers, knives and more.
- Koss: This electronics company offers free repairs and replacements or your money back.
- Le Creuset: This iconic cookware company will replace defected items.
Whether you decide to buy an extended warranty on a product or not, be sure you do your research and understand the fine print. Know your rights before you make a purchase.