INFOWORLD GRIPE LINE BY ED FOSTER Bookmark this page

  
Replying To:
Extended agony (none / 0) (#4)
by Anonymous User on Fri Nov 16, 2007 at 06:22:43 AM PDT

When extended warrantees were first offered, many years ago, I found them to be worthwhile. But that was when you could stand across the counter from the person who sold you the warrantee and have a polite conversation with someone who personally hoped to sell you another product sometime soon. Today these false products are a consumer ripoff. The exclusions, the faceless interface to "customer service" (which today alone has become a fraudulent claim), the "you can't sue us" arbitration clauses, and the clearly official tactics of delay, deny, duck and cover all mean that you are highly unlikely to get what you paid for. And even if you do, if you average the warrantee over the expected life of all the products, you discover that you are much better off not buying the warrantee and just replacing what does break. My new home came with many appliances and a four-year GE warrantee on them all. The cost of the warrantee for the builder (i.e. me) was $895. During the next 4 years, only one item broke down: a $495 microwave. Net $400 to GE (which is why, of course, that they do it.) The very business model of extended warrantees is predicated on charging you more than it would cost for them to pay for both the replacement and the service people to do it. Extended warrantees offered by the manufacturer are usually there to give the manufacturer a leg up on competition, and used to be (and for some still are) a "loss leader". The cost of the warrantee was usually a little less than the actual cost of enforcement. But third party warrantees are a sham. Unlike insurance, where liability to a given loss may exceed your total wealth, most warrantees are addressing minimal risk situations. As such, they are a waste of your money. Take the risk yourself and pay the occassional (and very limited) loss.


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