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Discussion Starter · #1 ·
Should I get one when I purchase a plasma? Do most problems occur in the first year so extending coverage is a waste of money? Should I just use a credit card that will add a second year?


A retailer here has an interesting twist on their extended warranty. If you don't need to use it, then you get a store credit for the full amount you paid. I suppose you lose out on the interest you would have earned but I can't think of any other downside.


The benefit to the store is that in a few years you will return with a store credit that you will use to buy something (hopefully) worth much more than the credit.
 

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That's certainly better than buying an extended warranty and not

having to use it! :)


From the discussions here in the past about extended warranties,

it seems that most people don't get one. Credit card extended

warranties are very popular.


larry
 

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And the people that dont get one are the ones who will ***** about 'XYZ Company' for making shoddy products. I think when you make a purchase of that magnitude, you are only killing yourself if you do not get one. I admit, i am not a warranty person either. But far too often it has bitten me in the behind (My computer, cell phone, etc..). Just keep an open mind about the service plans, it is not all for making 'XYZ Company' a better bottom line. Most of the time if you use it once, it pays for itself. Every company cut corners on just about everything. EVERY COMPANY. How else do you explain the low, low prices?
 

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Help your decision making process by never spending, say, 10% of the price of the item for the extended warranty. Warranty costs, for plasmas at least, are often based on the price of the unit. The 10% rule could help you determine if its worth it for the additional expense.


We just had a complete replacement on a Panasonic 50" 3UY. Guy would be out $8700 (price he paid B&M). So, in this case the warranty was the best thing he ever did.


Also, be careful of some ultra-cheap warranties. They are really cheap for a reason (problems with claims, poor financial backing, etc).
 

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IMO, the best deal by far is the 1 yr. extension by the CC companies, for a total coverage of two years. I can't prove it, but I'd be willing to bet that 95%+ of plasma problems occur within the first couple years - if not within the first month or two. (BTW, if these warranties are really worth what their underwriters charge, how come the CC companies give them away free?)


As you have suggested, the money-back extended warranties are not as good a deal as they sound at first. In addition to the interest foregone, you will be receiving a store credit, not cash - and that's assuming both the store and the insurance underwriter will still be in business at the end of the period. And is the store certain to have something you really want to buy at that time?


With extended warranties, you are betting the insurance company that your plasma will fail, and they are betting that it won't. They probably know 100X as much about actual failure rates as the average consumer does, and set their rates accordingly. These outfits typically pay out 20-35% of permium income in claims - i.e., the odds against you are 3 or 5 to one. You have a better chance of winning at roulette or slot machines.
 

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Quote:
Originally posted by steuert
With extended warranties, you are betting the insurance company that your plasma will fail, and they are betting that it won't. They probably know 100X as much about actual failure rates as the average consumer does, and set their rates accordingly. These outfits typically pay out 20-35% of permium income in claims - i.e., the odds against you are 3 or 5 to one. You have a better chance of winning at roulette or slot machines.
Does it mean I shouldn't buy health insurance either?


Okay, 1 difference is that there's a $1M ceiling on my health insurance. The ceiling on the extended warranty is the price of the plasma.
 

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"Does it mean I shouldn't buy health insurance either?


Health, Life, Home and Auto insurance underwriters typically pay out 80% or so of premium income in claims, several times the ratio for extended warranties. And these types of policies protect you against catastrophic losses that could literally ruin your life, while for most people plasma troubles will be a relatively minor inconvenience.


Also, the effective ceiling on an extended warranty for a plasma will be its replacement cost when the claim occurs, which will probably be a lot less than it originally cost, and in most cases repairs can be made for $500-$2000 or so.
 

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Discussion Starter · #8 ·
Quote:
Originally posted by steuert
IMO, the best deal by far is the 1 yr. extension by the CC companies, for a total coverage of two years. I can't prove it, but I'd be willing to bet that 95%+ of plasma problems occur within the first couple years - if not within the first month or two. (BTW, if these warranties are really worth what their underwriters charge, how come the CC companies give them away free?)
Does anybody have data on this? Is two years enough coverage?

Quote:
As you have suggested, the money-back extended warranties are not as good a deal as they sound at first. In addition to the interest foregone, you will be receiving a store credit, not cash - and that's assuming both the store and the insurance underwriter will still be in business at the end of the period. And is the store certain to have something you really want to buy at that time?
This Company has been around for over 20 years and I'm sure it will be around at the end of the period. It's an audio/video store so I know there will be something I want or can get for someone.

Quote:
With extended warranties, you are betting the insurance company that your plasma will fail, and they are betting that it won't. They probably know 100X as much about actual failure rates as the average consumer does, and set their rates accordingly. These outfits typically pay out 20-35% of permium income in claims - i.e., the odds against you are 3 or 5 to one. You have a better chance of winning at roulette or slot machines.
But how do the numbers work out if you include the money-back provision?
 

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Discussion Starter · #9 ·
Quote:
Originally posted by Nez
Help your decision making process by never spending, say, 10% of the price of the item for the extended warranty. Warranty costs, for plasmas at least, are often based on the price of the unit. The 10% rule could help you determine if its worth it for the additional expense.
10% for how many more years? What percentage would you use for an extra four years?
 

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Quote:
Originally posted by Nolan K
10% for how many more years? What percentage would you use for an extra four years?
I was just tossing out a figure, but 10% of the plasma price sounds reasonable. I was just trying to think up a bench mark to use for determining if the warranty is reasonable. So, if the warranty cost less than 10% of the plasma price, then it might be worth it. Just an idea.


The 2 year extensions aren't all that popular. A 4 year is usually only $100-$200 more and in scheme of things probably worth it - if you're going to do the extension at all.


I have seen 2 Panasonic 50" units get replaced in full. This is a small percentage, but for those 2 customers it was a real life saver.
 

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Quote:
Originally posted by steuert
"Does it mean I shouldn't buy health insurance either?


Health, Life, Home and Auto insurance underwriters typically pay out 80% or so of premium income in claims, several times the ratio for extended warranties.
The insurance company's margin is not relevant. Many companies have gross margin of >20%. When the margin is high in a market, it just means that competitors should go in.


If I were to buy tens or hundreds of plasmas, all that expected value calculation would make sense. But if I were to buy a single $10k plasma, I'd gladly pay $1k for 3 or 4 extra years of peace of mind.


A friend of mine declined coverage on a snowmobile rental thinking the odds were in his favor. He ended up crashing and had to pay $3k in damage. If he were to rent hundreds of times, yeah, sure, decline the coverage. The odd of an accident happening is the same every time. If you rent just once it doesn't mean you're less likely to have an accident that one time. If you were to buy one plasma, it doesn't make the failure rate of plasma lower. I've been out of school for a while, I think it's called a Poisson process.


For the record, I bought extended warranty for my CRT RPTV but not for my direct view LCD. I didn't have hard numbers but the decisions were based on my perceived failure rate of each technology. So I'm not saying people should buy extended warranty blindly. I guess I'm trying to say that the extended warranty is worth more than failure rate * average repair cost.
 

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I am in the process of buying a plasma (42" Pana ED) and am struggling with this issue as well. I just checked with my CC company (AMX) and they confirmed what I had been told: the CC warranty (1yr) kicks in AFTER any extended warranty I purchase. So, I am considering purchasing only a 1 yr extension from the plasma dealer (for $200, which is high), giving me a total of 3 yrs coverage (buying a 3 yr extended warranty through this dealer would cost $400 and give me a total of 5 yrs coverage). Another option would be to purchase the extended warranty from a separate internet vendor such as efunctional.com, which offers "WARRANTECH RMT45000 In-Home 4 Year Warranty Extension for Televisions Under $5,000" for only $190 plus shipping. What do you (anyone) think?
 

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If you don't plan on moving, try calling your local authorized repair shop. Sometimes they offer extended warranties directly. Downside is that they might not have the longevity of a big retailer.
 

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I don't know if this will help anyone decide, but I bought my 50" Fujitsu 2.5 years ago. It failed with a "green vertical line" down the center about 6 months into it. That was covered under the standard manufacturers warranty. Now the scan drive module failed at 2.5 years and I will be paying out of pocket. Don't know how much that will be yet, but I don't regret my decision to not buy the extended warranty.


I wonder if having an extended warranty makes getting a repair any quicker or slower??


FYI - The place fixing my plasma said that he has only ever had to fix one other Fujitsu. He said they are very reliable.


Like others have mentioned, I think the odds are with the companies doing the extended warranties. They sure didn't get into the business not to make money!!


Unless I drop my plasma, I think I can afford most repairs, probably about the cost of the warranty.
 

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Quote:
Originally posted by Charles Goldman
..."WARRANTECH RMT45000 In-Home 4 Year Warranty Extension for Televisions Under $5,000" for only $190 plus shipping. What do you (anyone) think?
I considered Warrentech, until I did a web search and found some customer reviews. I suggest you do same before spending your $$.
 

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I had a digital camcorder replaced by warrantech several years ago. This year I had a sony dvd player replaced under a extended warranty. I for one will say that the warrantech warrantys are worth the money. Chances are you wont use it, but can you afford to buy a new one, or pay for a repair the day after the manufacturers warranty expires.


As for the CC extensions, varies depending on the companies, so make sure that you look into their exclusions and requirements to get the extension. Some have a $ limitation and that the product has to be registered. You pay for all repairs up front then submit paperwork that could be denied if there is a problem.
 

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Quote:
Originally posted by papa hemi
echeal-


Please elaborate. What did you read about Warrentech that made you reconsider? Where did you look for coverage instead?
I don't have personal experience, I only know what I read from others. I don't believe in repeating someone elses experience second-hand, esp from someone I don't even know. As with anything, you will probably find both positive and negative reviews. I just suggest that you do a search and judge for yourself. As for what I did, I decided to live with the 2 yr warranty (Pio Elite), plus a third year on the cc (amex).
 

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...and the Daewoo has a 1 year warranty.

CompUSA really pushed for 2year for $229, or 3 year for $349. (I think)

I declined, called VISA platinum, they have a standard 1 year after the manufactuers first, and THEN $119 for a 3rd OR $189 for years 3, 4 and 5.

I asked her to repeat that.

That's 5 YEARS (mirroring manufacturers, I think in house) for $189.!

There haven't been many slam dunks like this. She looked up TVs, and I qualified for a cheaper tier up to $2000 before tax, and we all know the Daewoo was had for $1999.


Call every CC you have to find the sweetest deal.
 

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this deal was even sweeter for me.....


walk into CompUSA on sat before the Daewoo went on sale for 1999


they were giving away a free 139 dollar Daewoo DVD/VCR player with purchase of the plasma.


i told them i want a sony one can i pay the difference.... so the total was 2699 + 50 + tax.... thats' on sat



i go back to CUSA on Monday tell show them the add get my 700 back


and all dvd/vcr combos came with 2 free 10 dollar dvd



so i got Daewoo , Sony DVD/VCR combo, Airforce one and Ronin for about 2050 + tax...



all i have to do now is figure out if they will do the Visa CC tranfer for me or not
 
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