We’ll take care of everything”.”It’s all covered, soup to nuts”.”Your check will be in the mail in no time”.

Familiar terms these days to those of us buying extended service contracts. Clichs which are hurled across the retail store floor with abandon in an effort to get us to fork over as much cash as possible as quickly as possible. they are thinly disguised efforts to convince us that we need something we usually don’t, at a price that’s far too steep to begin with.

The talking heads push extended warranties at every level, at every price point. from stock clerks to salesman to store managers, they are all trained to go for the jugular on one of the highest margin, lowest return products in the retail business. In the world of home electronics, the Extended Warranty has no peer. this is a largely worthless piece of paper underwritten by any one of a number of insurance companies. Some of them are reliable and well known, others not so much. they all pretend to protect our stuff from our selves, our children and even mother-nature. Make no mistake, they don’t.

What they do is take your money, sometimes a lot of it (up to 15% or more of the gross amount of your total invoice!) under the guise of providing a long-term blanket of protection for your delicate, software driven electronics. Unfortunately they don’t tell you that their blanket is full of holes and that the warranty doesn’t cover software, even though software pretty much powers everything you buy these days, or moving parts, you know…like hard drives and motors in CD or DVD changers. That’s the stuff that breaks, the stuff that warranties ought to protect! Heck, they often won’t even cover the labor provided by your AV integrator required to actually use the extended warranty. Extended warranty plans for custom electronics never give you the peace of mind you seek, and they definitely make our job as your service and product provider much more difficult. Even the venerable and neutral Consumer Reports says Extended Warranties are not a cost effective way to spend your hard earned money. For the record, we at Ask The Advisors couldn’t agree more.

Please understand manufacturers offer warranties on their products for a specified period of time for a reason.

Murphy’s Law says if you’ve got a 90 day warranty; expect a problem in 100 days, a one year warranty, in the 13th month and so on. Extended service contracts are designed to appeal to your natural impulse to protect your purchase for a longer period of time than even the manufacturer thinks their product should actually last, which is just silly. Yet many of us fall for it time after time. Take a closer look however, and you will conclude that extended service contracts can easily end up as a negative ROI. and let’s not even begin delving into the muddled mess your service provider (yours truly) gets to wade through in an effort to actually get reimbursed from one of these companies.

They don’t understand what we do and never will, so they have no grasp on what we need or why we need it to make your system functional again. Suffice it to say every part sold, component used and minute of our time has to be justified in triplicate just to get the OK to proceed with servicing your system, and even when the red-tape is all spooled up nice and pretty it could take weeks before we get the OK to dispatch a technician to your home, and you need service now! Talk about playing both ends against the middle…

The bottom line: spending three, four or even five figures to pre-pay for potential future service over and above the already generous manufacturer’s warranties offered these days is a rip-off. this is 100% profit to the seller and the underwriter for service that you may never need or want. In fact, it is almost always more expensive than calling on us to service your system as and if the need arises. When you take into account how often electronics companies value engineer their products to be less expensive with more features, many of us simply choose to upgrade rather than repair anyway because it is simply more cost effective to replace commoditized components of your system than it is to repair yesterday’s technology.

“Extended Warranties bring no benefit to anyone except those that market them. just leave all that stuff to us, we’ll take care of everything.”

Extended Warranties – who Do they Benefit?