Anyone beleive in extended warrenties on recievers/seperates? (1 Viewer)

[Jesse Sharrow]

I bought a 5 year on my RXV-1400 but I just returned it for credit on a new dvd audio player. I was wondering if you all think I should get it. I know it comes with a 2yr warrenty factory. I sell the stuff, and I have bought alot of warranty's and havnt had to use them.

 

[Mike_Skeway]

I don't usually get extended warranties on anything, but that is just me.

 

[Keith Mickunas]

I've purchased them for my two RPTVs and for my RX-V1. Those cost enough that I won't want to replace them to quickly, also I got the warranties at a pretty good price, and if I don't use them I believe I can get half my money back, so that influences my decision. My first RPTV required a couple of visits to get a problem taken care of after it was out of its regular warranty. In all likelihood just one of those covered the cost of the service.

For a receiver that retails for $800 I don't think I'd buy a warranty unless it costs $100 or less. Look at it this way, if it fails after 2 years, it cost you $400 a year. Depending on your budget that may be a lot, but if you're relatively new into HT you may find that it's addictive and will want to upgrade in a few years anyways.

Typically electronics die sooner rather than later. That's another consideration. The only AV component I've had fail on me was my old DSP-A3090 that took a lightning strike. Warranties don't cover that. I've got a 13+ year old CD player that hasn't been used in a few years, but it still works, as does my first DVD player bought in January of '98. My 4.5 year old CD 200 disc changer that is always in shuffle mode when it's on works just as good as the day I got it.

In short, no, I don't think you should spend the money on it unless it's only $20 to $50.

 

[WayneO]

Forget the extra warranty, most electronics will develop a problem right away, which is covered by the manufacturer, or none at all. In my 15 years or so of owning electronics, I only had to bring in my current receiver once for a problem a HTPC video card caused.

 

[David Judah]

I wouldn't on a receiver, but an RPTV is a different story.

DJ

 

[TimMc]

Extended warranty for just electronics? Nope - they usually either die very, very soon (measured in minutes or days) or last forever. For an RPTV? Well, I didn't and am just keeping everything crossed - had been quite lucky w/ 20+ years of FPTV and decided to just not prepay for prospective service.

The only other XtendWarranty that I've considered was for a laptop for the wife and it covered the screen & everything for many years. The price was right, I know that the laptop will travel lots and may not always get the gentlest care, so that's really the only other warranty I'd get.

Oh, wait - there is one more. If I was ever to acquire a DaimlerChrysler product I'd probably have to get one...:p)

 

[Scott Tucker]

Most extended warranties do cover lighting strikes by paying the deductable on your homeowners policy.

Scott

 

[Scott Tucker]

FWIW, I have NEVER had a customer unhappy after buying a warranty. I have had MANY customers unhappy who didn't buy one.
Scott

 

[Keith Mickunas]

How do they determine what they should pay? I lost computer components, a stereo receiver, and the 3090. My insurance treated all the losses as one incident, so would the warranty company say a percentage of it applied to what they covered or what? Seems like something they could weasel out of pretty easy. Kind of like those surge suppressors that promise to pay if anything is damaged. I just don't trust them.

 

[Keith Mickunas]

Do people even mention it if they didn't use it? How many people call you up two years later and say "I sure sleep better knowing it's warrantied."? I'm guessing none. True if someone brings in something to be repaired under warranty and see you they'll mention that they're glad it's covered, and if they don't have the warranty they may mention that they wish they'd bought it. But the reason warranty companies make money is most aren't used, just like insurance.

 

[Mike_Skeway]

To some people it is just piece-of-mind. But I too wouldn’t think they would mention it if they never needed to use it.

 

[MikeTz]

If it's expensive and mechanical, think about an extended warranty. If it's electronic it will usually die quickly or live a long life so forget the extended warranty. If its cheap don't bother with an extended warranty.

MT

 

[Lee Distad]

Everybody's points here, both for and against, are valid and good.

Here's some things to consider:
1) the #1 most common time for breakdown is straight out of the box or shortly after, because it is a dodo. Breakdowns due to defects drop off sharply after initial use.
2)beyond this time, there is a minor, but steady incidence of breakdowns due to wear and tear. This % of breakdowns slowly increases over many years.
3) manufacturers keep a whole army of actuaries who do nothing but figure out exactly how much warranty they can offer to generate goodwill before they start to lose their shirts.

Like anything else, your mileage will vary. I on the one hand, always buy warranties because they eventually pay off for me. I seem to be a lightning rod for warranty problems. My less charitable freinds say that this is because I worked for Sony for much of my life, so what else should I expect? Other people never have an issue ever with anything they buy.

So, if you're considering a third party warranty, here's what you have to ask yourself, and your salesman:

WHAT IS IT GOING TO DO FOR YOU!?
Really, if you're going to buy a service, what are you going to get out of it?

Are they going to replace it if it costs too much to fix?

Is it 100% manufacturer's own parts?

Is it 100% parts and labour, or is there a bogus deductible?

Are there any terms and conditions that will allow them to weasel out of fixing it? (no joke, there is a dealer here in town who has a clause in their warranty that if the device costs too much to fix, they will refund your warranty, and leave you stuck with a broken unit. Nice)

Is it affordable, or is it an outrageous price for the extra coverage?

I've sold really great warranties, and warranties that were pretty mean spirited. Believe me, I feel better selling a warranty where I know the company isn't going to dick my client around, they will just make the problem go away. On the other hand, I've sold against competitors whose warranties were total cash cows, with no coverage at all, it was just a scam. Like anything, do your due dilligence before you buy!!!

And as far as the accusation levelled against our industry goes that we make money on the warranties we sell: of course we do. The aim in a business is to make money on the things you sell, that's how commerce works! Retailers make money on the front end of warranty sales, the same way insurance companies make money on the front end selling premiums. Whether or not your warranty company pays up when the have to is what separates the legitimate warranties from the scams.

 

[Joel()Les]

Lee:

The profit rate on consumer warrenties is MUCH higher than on traditional insurance. Consumer warranties typically add a couple years beyond the manufacturer's warranty but cost 20% - 30% of the purchase price. The number of electronics failing in that time frame is far lower than 20% and the rate of claims (got to find the paperwork )is even lower. You can look at the fact that VISA and & M/C double warranties (up to a year) as evidence of the true cost. They have only a few percent of the sales price to play with, but they know the claims rate will be very low. Even on cars, extended warranties are only 3 - 6% of the product cost (e.g. $1k on a $25K auto) and an auto is subject to much more abuse.

Real insurance (e.g. auto or homeowners) is based upon the experience of thousands, if not millions of people. It is also regulated in most states so that some one is reviewing the ratio of premiums to claims payout. Additionally it is sold in a competitive market. No one is competing for your insurance when buy the extended warranty at Circuit City.

I'm not saying that insurance companies are not entitled to profit, but those warranties are the highest profit items sold in most stores. BTW, Big chains like Best Buy probably sell those on a self insurance basis, retaining all the profit for themselves.

 

[Jesse Sharrow]

I acctually work for the company I bought the receiver from so I get a discount. The reason I asked is because I bought the 5yr for my RXV-1400 for $40 U.S. and then returned it to help pay for a new pioneer DVD audio player. Im just curious if I should look into getting the warrenty soon. I bought a gaurentee on all my car audio stuff and never used any one of them once. Thats in a CAR! The only time I would have used the warrenty was on the one thing I didnt buy it on. But maybe I will get a warrenty that covers my DVD and Receiver.

 

[Mike_Skeway]

One reason I never get them is that I have never had electronics break past the manufacturers warranty. I also generally end up upgrading before the point of wear and tear really comes into play. I have had some old electronics die on me, but it was well past what any extended warranty would have given me and it’s resale value was probably about nil before it died anyway.

 

[Keith Mickunas]

There was no reason to get defensive regarding my statement, I was merely pointing out that they are profitable for the business or else they wouldn't offer them. It's just something you have to consider when buying one.

Jesse, at $40, why the hell not? You said that the standard warranty is 2 years, right? So you are getting three years at $40, or $13.33 a year. That's some cheap insurance. My salesman sells the warranty at cost or close to it to me, so therefore I pay around 10% for warranties. On a receiver that cost me $2500 I think I paid $200 to $250 for the 5 year warranty, and that was before the RX-V1 got a 2 year warranty. However normal price would easily be between $500 to $800, that's way to much because after a few years that receiver may be less than $1000. It's the point of diminishing returns. 4+ years from now you aren't going to be able to replace that receiver with something comparable for less than a few hundred, but your $40 now guarantees you won't have to.

Now that I think about it, my warranties do cover lightning, but I never purchased one for the 3090 because I bought that used. Both my RPTVs and my RX-V1 have the warranties though, and they are buy far the most expensive single components I own, and the ones I believe I'm least likely to replace in under 5 years. So to me it makes sense to have that extra bit of insurance.

 

[Lee Distad]

It wasn't my wish to come across as defensive, and that wasn't directed at your comment Keith, but to the world in general.

From Joel()Les:



Anything more than 10% of the purchase price is way too much, I agree. Like any purchase, there has to be value inherent in the deal.

In any event, in an industry where price erosion is a fact of life, and then competitive market pressures drive selling prices down further, something we sell has to provide a profit. How much $GP do you think a dealer makes on a $99 DVD player? Heck, my market in Alberta is the most agressive RPTV market in Canada, with a remarkable saturation of dealers to population. When things get really ugly here on a major promotional weekend margins can get down to 5 or 7 percent. This is the reality of the marketplace. If we can't charge more for a TV that has been heavily commoditized, we have to find soemthing else to sell. IMO, warranties are analogous to cables, and other accessories, they maximize the experience for the customer, and provide a profit opportunity when we're making less and less on the hardware.

 

[Kevin. W]

Extended warranties for video? YES
Extended warranties for audio? NO

I personally have an extended warranty on my RPTV, DVD and Amp. For me its more piece of mind and the fact that if I don't use them then I get the money back in the form of a credit towards my next purchase when they expire.

Kevin

 

[Keith Mickunas]

I understand, I just wanted you to know I wasn't persecuting you.