Extended Warranties: Are They Worth It?
(Tallahassee, FL) – November 19, 2011—The continuous redesign of electronics and
appliances for enhanced portability, functionality and energy efficiency has made many
of today’s consumer goods increasingly intricate, fragile and costly to repair or
replace. At the same time, products are being manufactured with low-cost components
and manufacturers are limiting warranty periods along with customer support options.
According to the Service Contract Industry Councilhttps://go-scic.com (SCIC), as
the technology in products rapidly evolves it can prove difficult for manufacturers to
keep replacement parts in stock for products utilizing yesterday’s technology.
Consequently, consumers whose malfunctioning product is outside of the manufacturer’s
warranty period and who want to repair it to keep it for the long-term may be out of
luck. With an extended warranty, however, consumers can find protection; if a
malfunctioning product cannot be repaired, it generally is replaced with a comparable
newer one.
Consumer Reports (August 2011) stated, “…consumer goods have become more
complex and contain more electronics than they did a decade ago…when things do go
wrong, they tend to go horribly wrong.” The 27,404 subscribers surveyed for the
Consumer Reports’ story reported that 53,218 of their home products including
appliances, electronics and more needed to be repaired or replaced.
“An extended warranty is particularly relevant in uncertain economic times,” said Tim
Meenan, Executive Director of the SCIChttps://go-scic.com. “When things do go
‘horribly wrong,’ the consumer is protected by law.”
Since 1988, the SCIC has developed legislation and worked with legislatures across the
nation to regulate the extended warranty industry on a state-by-state basis with laws
mandating licensing and stringent financial responsibility requirements for providers.
Among other provisions, SCIC legislation puts in place regulations — including the
requirement to buy insurance — to protect consumers who purchase service contracts
from retailers who go out of business.
Extended warranty providers are a fixed component of retailing in America because they
meet a large market demand, provide an enhanced quality product, and proactively
establish and enhance consumer protections – all the while greatly improving the state of
the industry through self-regulation.
Why to Buy an Extended Warranty:
A survey of consumers by Brand Keys, Inc. predicts a 10 percent increase in electronic
purchases over last year. Of those consumers planning to give an electronic device, 25%
are purchasing e-book readers, 19% tablets, 15% smart phones, 9% computers and 6%
cameras.
• Consumer electronics are complex, increasingly mobile and expensive to repair
• Cracked screens for both eReaders and tablets can cost from $160-350 to
repair/replace
• Battery upgrade/replacement $80-150
• Lines in screen $160-350
• Unit frozen/not able to connect to computer $180-500
**((higher range applies to tablets)
• 30-day free look back period – if you want to change your mind, you can!
• 100% parts and labor coverage for failures caused by:
• Normal wear and tear
Defects in workmanship and materials
Mechanical and electrical breakdowns
Environmental factors
• Power surge protection (great for small businesses)
• Replaces products that require multiple repairs for the same failure.
• 24-hour, toll-free access to pre-qualified technical support and local repair person
• Time savings – no hauling products back to place of purchase, etc.
• Free transferable coverage
• Save the environment. Repair versus dump and replace products.
When Not to buy an Extended Warranty:
• If at all pressured by a sales person to buy on the spot
• If the contract is not available for review at the time of purchase
• If the cost of the warranty is a high percentage of the overall product price; the
warranty should cost between 10-20% of the overall retail price
• If you receive an automated phone sales pitch or mass mailer
Contact your local BBB or state insurance commission with any concerns. Always read
terms carefully and research provider prior to purchase.
“Why” and “When Not” to buy tips © SCIC
About the SCIC
The Service Contract Industry Council (www.go-scic.com) is a national trade association
established in 1989 to educate consumers about service contracts (extended warranties)
and develop and pass legislation at the state legislature level across the country to protect consumers and enhance the integrity of the industry. SCIC members consist of the largest
and most reputable service contract providers in the industry and sell approximately 80
percent of the service contracts sold in the U.S. for home, auto and consumer goods.
Over 250 million extended warranties are sold annually in the U.S.