Extended Warranties, Are They Worth The Money?

When looking for a computer or other house hold appliance the first place you go to is a big box store like Future Shop or Staples. You are then approached by a salesperson and you listen to their sales pitch on the product you’re looking at and then they try to sell you on the extended warranty.  Is the extended warranty worth the extra money? It depends on how you look at it and your past experience with them.  Extended warranties are like insurance policies, you may need it and you may not.  But why do the stores push them so hard? The bottom line is they make big money on them.

As a former Staples employee (Senior Technology Consultant) I’m very familiar with extended warranties, both the good side and the bad.  When you purchase your warranty it doesn’t take effect until after the manufacturers warranty ends, naturally.  There are several types of extended warranties available depending on what company you’re shopping at.  The two main types are Replacement Warranty and Repair Warranty.

If you got a replacement warranty and something goes wrong with the product they give you what you paid for the product usually in the form of a store credit.  This can be a great idea on digital cameras or printers that tend to break down after a year. The down side of that is you have to wait “X” number of days or weeks to get that credit.  In my opinion the replacement warranty is a good idea if you’re not in a hurry to receive your credit.

The other type of warranty is the repair warranty which extends the manufacturers warranty an extra year or two.  This type of warranty will cover the cost of repairing a computer or laptop if something fails, like the motherboard or hard drive.  The down side of this type of warranty is that the computer has to be shipped out, usually at your expense and could take weeks to be repaired.  If the system can’t be repaired they usually offer you a very small percentage of what you paid for the system to begin with.  It’s my opinion that these types of warranties are not worth the extra money you spend on them.

So in a nut shell, are extended warranties worth the money you put into them?  It’s my opinion that they are a waste of money.  It’s far less hassle to just go out and replace whatever breaks down then it is to get it repaired or replaced through an extended warranty.  Sometimes even getting something repaired under a manufacturers warranty can be a hassle. So save yourself the head ache and put that extra money towards something else.

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