Plasma Warranty

Most of the time extended warranties are highly beneficial to the seller, and never used by the buyer. One story like JH's doesn't determine the issue -- obviously if 50% of plasmas conked out within a couple of years like JH's, it'd be well worth it to spend a few hundred bucks on a warranty (it'd also be impossible, since the people who sell warranties (1) aren't numbskulls, (2) would like to avoid going bankrupt just as much as the next guy and (3) would price their warranties accordingly).


I suspect it is more likely that JH's story is fairly atypical. Unlike the case with RP LCD and DLP units, where the forum threads are replete with NUMEROUS horror stories about lamp and ballast failures necessitating repeated returns and service calls, there are relatively few such threads re: plasmas. If I were buying an RP LCD unit, I'd get the EW for sure, since the chances of problems appear pretty high. With a plasma, not so clear that the EW is a must have.


The issue is what are you willing to pay to feel comfortable and how much risk are you willing to accept. Some people purchase an extended homeowner's warranty every year to cover home maintenance costs -- I pocket the money (and by this I don't mean spend it on a plasma, I mean put it aside in an account I call "home maintenance") and take my chances. Maybe someday I'll need a big repair (that would actually have been covered by the warranty - always an issue). in which case I'll be sorry. However, maybe I won't (in which case I'll have made out like a bandit). Of course, if I DID spend the $$ for the warranty every year and DIDN'T ever use it, I'd feel like a bit of an idiot, since pretty much every discussion of extended warranties I've read suggests they're generally not worth it. Just a matter of what risk you're willing to accept.


Also, before deciding, think about what replacement costs may be in the future. If you buy a unit for $5K today and use an credit card that automatically extends the warranty from 1 to 2 years, based on recent trends you may be looking at a replacement cost in 2 years of more like $2K for a unit with better technology than the one you buy now. Thus, if your plasma bites the bullet in two years and a day, you certainly will not be looking at a $5K replacement cost and quite likely will be looking at much less. (Think back to what plasmas were going for in 2001-2002.)


If you're the kind of guy who's likely to buy a new plasma in 3 years anyway when 50" panels with much better technology may well be going for what 42" ED units cost today, then skip the EW. If the idea of dropping another 2 grand or so on a TV in a couple of years gives you (or your spouse!) the willies, maybe you'll feel more comfortable spending the $$ today on an EW.

These extended warranty threads often attract posts about how some individual really made out under the warranty, and his conclusion that, therefore, they must be a good thing.


Go to Las Vegas, and you will find plenty of people who have hit jackpots. Does that mean gambling is a wise investment? Of course not, and the fact that people do sometimes collect under an extended warranty is no more convincing evidence of their inherent value.


The only way to evaluate things like insurance is to look at the overall picture of how they work. The comission on EW's is huge (which is why retailers push them so aggressively) and the percent of premium income paid out to cover claims is a fraction of what it is with almost any other type of insurance. The companies who underwrite these policies have more data about claims experience for the items covered than anybody, and do not price them to lose money.


IMO one type of Extended Warranty that does make sense is the one-year addition to the mfr's warranty offered by meny premium credit cards. The fact that they offer this extension free gives you an idea of what the actural costs of such policies are.