Are service plans worth it?

Discussion in 'Archived Threads 2001-2004' started by Jamerson, Oct 2, 2002.

  1. Jamerson

    Jamerson Auditioning

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    A few months ago I bought my 43" rear projection hdtv at circuit city and bought their super duper 3 year service plan for like $250. I was led to believe there would be yearly maintenance cleanings or something, and I recently called up to verify that, they told me that if I see any difference in picture quality they'll come look at it, but nope no maintenance checkups. I figured, well gee it couldn't cost much more than $250 anyways if something did go bad so I tried to cancel, but I guess I'm a sucker because he talked me out of it. He said projection tv's tent to go bad and need alignment of something or other pretty often.. is he giving me a line of baloney or should I keep the contract? Are home service plans in general a good idea when buying home theater components?

    Thanks ~
     
  2. VinhT

    VinhT Second Unit

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    I too purchased a service plan for my 42" RPTV. I was harrassed by four Best Buy employees until I did so. It did not help that I already knew "performance/service" plans are essentially worthless because either the product dies within one month and can be returned, or the product dies later but it's near impossible to get that "service" you paid for. So why did I end up buying it anyways? Well, it was a big purchase and my first RPTV. Plus, I wasn't sure about the reliability of projection TVs at that point, so I got the plan as a placebo to ease my worries.

    I haven't had any problems with my RPTV yet, but I have no doubt that if I ever tried to call in that service owed to me there would be none rendered.

    To answer your question though, I don't think most home theater components would need any sort of service plan. They'll either be defective right out of the box or just work fine for the entire duration that you use them.
     
  3. Jamerson

    Jamerson Auditioning

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    Thanks man.. any other opinions..?
     
  4. BruceSpielbauer

    BruceSpielbauer Second Unit

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    Any good analysis will tell you that MOST extended warranties are not a wise investment of your dollars. Most.

    The reasons:
    1.) Most problems occur out of the box, immediately.
    2.) When this is the case, most of the remaining problems occur during the first 30 days, when it is often easy to return the item for a replacement.
    3.) When these are not the case, most of the remaining problems occur during the first 90 days, when it is often under the regular warranty.
    4.) When these are not the case, most of the remaining problems occur during the first 1 year, when it is still sometimes under the regular warranty.
    5.) When these are not the case, some of the remaining problems are cleverly excluded from being covered by the warranty.

    Finally, one should factor in the "throwaway society" we live in. If you purchase a DVD player for $120, is an extended warranty for $39.99 worth it? Many should consider that if it goes bad after 12 months, they may want to upgrade to a better model, anyway, or the later technology...

    Now, having said all of that, I made an exception for my RPTV. Why? Because so many of these repairs DO turn into big ticket repairs, and the technology is such that repairs seem to be warranted more often than for other electronic equipment.

    However, I also used the extended warranty as a bargaining chip when negotiating. I ended up with a 5 year extended warranty (4 years tacked onto the original 1 year) for only $199.99. The dealer I bought from had wanted $360 for this.

    So, yes, I would advise most to pay for the extended warranty, for a RPTV. I would advise differently for speakers, receivers, DVD players, VCRs, etc.

    -Bruce in Chi-Town
     
  5. Mark.D

    Mark.D Agent

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    Here's a thought... I wouldnt necessarily do this with my Front Projector ($400 bulbs last about 2000hours)and waste 336 hours...

    But I've always heard that when buying Electronic Equipment like a TV, Stereo, computer or such to turn it on and leave it on/running literally for 2 weeks... if its got faulty circuitry, you'll usually find out within that 2 weeks?

    What do you think about this 2 week test?

    M.
     
  6. Scotty_McW

    Scotty_McW Second Unit

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    I have a 47" Samsung widescreen tv. I too purchased Best Buy's extended plan. I'm glad I did. It's my first RPTV and I wasn't sure how reliable they were. Well, a little over 3 months later the perfect focus went out. Granted, it took another 3 months to get the issue resolved, but I have a brand new set. Surprisingly enough the service was great. A customer service rep called us weekly to let us know the status. Amazing. Anyways, while I generally wouldn't buy a service contract, I am glad that I did. Spending $2,000 on a TV is a lot of money for me and the extra comfort of the plan is nice. Just my 2 cents.

    Scott
     
  7. Bill Kane

    Bill Kane Screenwriter

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    The Credit Card Issue: How does it Work?

    I suppose I need to dig out my fine-print brochure, but what are the actual MECHANICS of a credit card's offer of one-year warranty extension.

    Does this pertain in a vacuum exclusive of a purchased extended warranty?

    Say a Sony RPTV goes bad in 18 months and there's no extended warranty in force. Where or how does the credit card company get called into this picture? (Like does one need to "register" the new purchase at the onset with such company?)

    bill
     
  8. Mazinger_Z

    Mazinger_Z Auditioning

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    IMHO, these service plans are just good peace of mind. Some of those do actually cost a lot, but hey, can you put a price on peace of mind?

    A buddy of mine got a laptop from Best Buy w/ service plan (for 3 years). Halfway through the third year, the screen failed so he took it to get replaced. Long story made short, he got a new laptop with it plus a $20 giftcard for trouble! BTW, his old laptop was discontinued, so BB replaced it with the closest model, a 1.8 GHZ HP unit 512 RAM, 30GB HD.

    Basically, you can only benefit from these plans if the unit actually fails on you.
     
  9. Bill Slack

    Bill Slack Supporting Actor

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    One thing with RPTVs. One service visit, out of warranty, would likely cost more than the price you paid. And you're certainly not going to want to bring it to a shop yourself.

    The only thing I've ever bought a service plan for is my TV. I do wonder if it was worth it, but in this rare case, the piece of mind is worth it to me.

    Another thing, to a lot of us, having to foot the replacement cost is simply not a feasible option if something does go wrong. Any form of insurance/service plan is automatically 'not worth it' because someone is making money (and usually, a lot of it!) off of you.
     
  10. Cees Alons

    Cees Alons Moderator
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    It may depend on other factors too.
    In my country most aspects of a 1-yr warranty are implied by and forced by the law (the product has to confirm to the specs, be apparently "fit" to serve the purpose it was sold for and be used the way that's deemed "normal"; this includes uninterrupted service for a "normal" period of time).

    So, effectively, it doesn't make sense here to buy an extended service plan, although many people are lured into it anyway.
    I myself never did it and still am happy with my policy in this respect. I had to return 5-10% of the equipment I bought during the last 10 years, because it didn't work out-of-the-box (BTW, this figure seems to diminish during the recent years). When it worked for at least a month, it worked for 4-8 years as well. This includes among many things: TV sets, VHS and DVD players, shaving devices, PCs, etc.

    I'm not familiar with US laws on this point, but certainly DOAs are covered in any country, I guess.

    Cees
     
  11. Iver

    Iver Second Unit

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    As a general rule, a service plan only makes sense for a product which you could not afford to replace if it were to break down.

    Obviously, this is true more often with things like RPTV's than DVD players.

    Also, it is best for products with some realistic chance of breaking down after the 30-day return period. Unfortunately, it's not always easy to figure out that likelihood. But, generally speaking, most electronics will keep functioning for years if they work fine for 30-days straight.

    Plus, in most cases you will still be covered by the manufacturer's warranty for a substantial amount of time, such as two years in the case of Denon and Onkyo receivers. Also, I believe that Toshiba provides two years of in-home service to their RPTV customers.

    As already mentioned in the thread, many credit card companies will double the length of the manufacturer's warranty (technically this should mean you will get the same repair speed and it will simply be paid for by the cc co, but you will have to check your own fine print).

    To answer Bill's question, it would probably be a matter of having the manufacturer undertake the repairs in the same way as they would if the product were under warranty (i.e., if shipping is included, the cc co pays for shipping, but if you would normally have to personally deliver the product to a repair depot or pay for shipping yourself, you would probably still have to do that). The difference would be that the repair shop would generate a repair charge and send it to the credit card company rather than the manufacturer.

    A couple of things to keep in mind about service contracts:

    1) They are massively overpriced. Just as with premium-priced cables, selling a service-contract with every purchase can easily push a retail electronics outlet from the just-surviving category to thriving. That is why Best Buy employees are essentially ordered to throw you to the floor and beat you with a Whitney Houston CD if you actually make a purchase from them and then attempt to leave the premises without having also purchased a service contract.

    The markup (the percentage difference between what it costs them and what they charge for it) is way higher on service contracts. That is why they will "bargain" on a service contract. Doing so generally entails them sacrificing a 300% markup for a 150% markup. Somehow, just today, and only because of the snowstorm, they'll let you get that service contract for $200 instead of $400.

    2) A service contract, like anything else sold at Circuit City or Best Buy, is a product, and one for which you can shop around. There is no need to buy the contract from the store where you purchase the item. In fact, you are probably most likely to massively overpay for the service contract if you buy it at the place and time of sale.

    The stores are buying these contracts from third-party providers, essentially insurance companies which insure consumer electronics products against breakdown.

    It does not take a great deal of footwork to find another retailer who will sell you one of these servive contracts at a far more reasonable price. Just as an example, check out J&R. They sell service contracts from a very reliable provider. There is a far more reasonable relationship between what J&R pays for the service contract and what they will sell it to you for than you will find at Circuit City, Best Buy, et al.

    I forget the URL, but there's a Web site where disgruntled Best Buy employees vent their anger. The number one complaint, of both current and past employees, is about the amount of pressure they face to make sure nobody ever walks out of the store without a service contract.
     
  12. David Sim

    David Sim Agent

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    The first Toshiba I purchased had bad geometry problems out of the box and the store required a technician to look at it before they could call it DOA.
    When I saw him thumbing his way through the service menu I lost all confidence in him. First of all he could not figure out how to get into the service menu. (The Toshiba has the 1/2 mute you need to pass and he couldn't get the concept) He left the TV worse than before he got there.
    This technician asked if I had bought the extended warranty and when I told him I didn't he said that he did not work for the store that I bought the RPTV from and had no ties with them except his firm was contracted with them.
    He said he normally wouldn't purchase a warranty for any electronics because he considered it a rip-off.
    However, he said that the repairs he does on RPTVs usually start at $400 and once the TV has problems they have a tendency to lead to other problems. He said I would recommend that you get one. After watching him blindly pushing buttons on my TV I figured if I ever have a problem I might get this same guy or worse. I can see why a problem may lead to more problems. I'd hate to see him with a soldering iron in my TV.
    Anyway I bought the warranty [​IMG]
    As has been said, piece of mind I guess.
    (I didn't bother getting one with my toaster oven but it didn't cost 3K)
     

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