Service Warranties: what you REALLY need to know!
Jan 25 '00
YES WE KNOW almost EVERYTHING THERE IS TO BUYING SERVICE PLANS! We have sold them for a total of over 6 years. Here is a easy guide to making a decision on what are the deals, and WHAT ARE DEFINITELY NOT. With our experience we are going to tell you where you make money or lose money if you follow this guide. Department stores make a lot of money from selling maintenance agreements and warranties, so be skeptical of products we do not mention.
WHAT ARE THE DEALS OR MUST BUYS THAT WILL SAVE YOU MONEY?
---TREADMILLS:
The bottom line is; any treadmill you buy at a department store will breakdown if the treadmill is used. This is due to the many moving parts that are pounded by a human every time it is used. So you should ask yourself, "whether or not you will use the treadmill?", instead of, "if you should buy the warranty or not?" If you don't think you will use the treadmill, then don't buy the treadmill at all.
If you are going to use the treadmill you have one of two options:
OPTION 1:
---You can buy a $3,500 club quality treadmill with a 1yr warranty. If you go to a club, you will probably see a treadmill that is out of order needing service. Club quality treadmills average $3,500. They are better treadmills that you would find in Walmart,Target or Sears. Clubs cannot get the department stores' warranties, or otherwise the clubs would buy them.
OPTION 2:
---The better option is to buy a decent, $600 treadmill, with an $150 3yr service plan from a store like Sears. $750 for a fully insured product for 3 years is better than a $3,500 treadmill that is insured for one year. We have seen more treadmills replaced under the service plan, than all other products combined in the sporting goods section. Most, if not all, department store treadmills come with a 90 day warranty. There is a reason for only 90 days, "THEY BREAK DOWN" We stress that if you can't afford the treadmill with the service plan, then wait until you can afford both before you buy. At one time the service centers were sending notices that the warranties might not be offered on treadmills anymore.
After working in many departments, Treadmills are the only true must buy warranty that we can find.
WHAT ARE THE DEALS THAT WILL SAVE YOU MONEY IF USE THE PRODUCT A LOT?
Keep in mind, most retailers will give you 30 days to decide on the warranties. Most of the time they will even call you to reconsider. Don't feel pressure to buy them on the spot. You have time to decide if you want, even though the salesman might say you don't. The salesmen are just looking for the commission and credit for the sale. The department stores put the sales staff under a lot of pressure to sell these service plans.
---SHOPVACS:
The average price for a 3yr maintenance plan on a shopvac is $45. This includes replacement filter for three years that cost $15 a piece. You will make your money back on the filters alone. If you break a hose by the ever so common, "backing over it with your car", then it will be replaced. And then you are covered for 3yrs if anything goes wrong. BUT, if you don't think you will use the shopvac that much and you take good care of your product, a filter could last you three years. Then the $45 is a waste of money.
---CamCorders:
If you these products a lot then all the moving parts wear out. This is especially true for LCD viewfinders. Keep in mind people don't use these products on a frequent basis. They are usually for special occasions which does not constitute frequent usage. If this is the case for you, then we DO NOT recommend buying the service plan.
LAWN MOWERS: Again, there are many parts that wear out. The agreements are expensive, but so are the parts. If you have small lawn and have no need to mow it frequently, then DO NOT buy the maintenance plan. If you have a big lawn and fast growing grass, this is why you might want to buy the service plan.
---Riding Mowers:
They require replacement of blades, belts, filters, oil, spark plug, and batteries on a yearly basis and sometimes more. The parts add up over three years. You can do the labor yourself and over a three year period save about $100. But that does not include the price of what you put on your own labor. You might enjoy doing the work, and in that case do not buy the service. But if you value your time very highly, then buy the plan. The positives are: Your tires will be covered, Your mowing deck is covered. If the service is not done in a timely manner, then the service plans usually give you an allowance to pay for professionals to cut your grass. The service guys will grease bearings and clean problem areas that most people don't think about. We have seen this happen many times. The bad part is that it requires a lot of money upfront. If you can't afford it, then don't buy it.
---Push Mowers:
They require oil changes, filter changes, blade changes, spark plug changes and belt changes for self propelled. But it is only for a matter of convenience. They do not save you money unless you beat it into the ground. For normal use, you would be better taking care of it yourself. The replacement parts are not that expensive and do not need to be changed that often.
---Bikes:
If you use the bikes a lot, then it is good to have a service plan. You will need a tune-up every year. Tires go flat, gears need to be adjusted, brakes and chains need to be replaced. Only buy the service plan if you will use it a lot. Sunday rides around the block with your significant other does not constitute frequent use. Commuting to work or daily exercise are definite reasons to buy a plan. 3yr service plans are about $50. Tune-ups at a bike shop are $35. Three tune-ups is more than a 3yr service plan.
WHEN TO BUY FOR CONVENIENCE?
There are products you might want to buy just a piece of mind and convenience.
---Lawn mowers: especially riding mowers, due to size and amount of knowledge to work on them.
---large stereos:
Stereos are big and hard to bring to a service center. The service plans for stereos are usually $45 for 5yrs, which is very reasonable. Although, Stereos are not likely to go bad after the one year warranty, but it might within 5yrs.
---Big Screen TV's:
Big screen or projection TV's are extremely expensive to fix, and to bring one to a service center is difficult. Remember, this is for convenience and piece of mind.
---Washing Machines:
Washing machines have many moving parts, and with a large family, they will be used often. The agreements average $100 for 3yrs, which is expensive, but I know plenty of people who have gotten their money's worth. Again I have not had a problem with my washer in 4yrs of use.
WHAT PRODUCTS THAT YOU SHOULD NEVER BUY?
These are products that offer maintenance agreements we have discovered customers almost never get their money back or will lose all their investment.
-Lawn & garden:
---Chainsaws
---weedwackers
---edgers
---inexpensive push mowers, The price of service might be more than the actual mower or close to the cost.
---inexpensive riding mowers, The price of service will probably be more than half the cost of the mower.
---blowers
---Tillers
---products with good manufacturing warranties like TroyBuilt.
-Hardware:
---Table saws Even though they say you get a blade every year
---radial arm saws
---band saws
---Drill Press.
-Appliances:
---Refrigerators
---dryers
---microwaves
---trash compactors
---vacuums
---stoves
---ovens
---Dish washers
---It is extremely rare that we hear of people needing service on these items, unless it is 5yrs or older. Most offered service plans are only for three years.
-Electronics:
---VCR's
---Tube TVs
---small stereos
---computers due to the manufactures warranty
---printers
---Satellite systems
---shredders
---BOSE stereo equipment since Bose products come with a five year warranty.
CAUTION:
NEVER, under any circumstance, renew your service agreements. The increased price will always put you paying too much! IN MOST CASE SCENARIOS, THE RENEWED SERVICE PLAN PRICE WILL EXCEED 100 PERCENT OF THE ORIGINAL PURCHASE PRICE OF THE PRODUCT. Why pay twice the price when you can buy a new one. I have heard people say they are very happy with the service they have received on a washing machine 15yrs old. They are elated that they have paid $1,300 dollars over 15yrs, and they are finally getting a new washer. The truth is they could have bought two washing machines with the money they spent on service plans for one washer.
Keep in mind, that if you buy a service plan, save the receipt and use the plan when you can, or you are wasting your money!
This is information that our employer would not be happy to hear, but we thought it would be useful and honest. Be warned, the salesmen can overcome any of these objections, don't buy into them.
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Jeffcordeau
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