You’re at the cash register with your credit card ready to pay for a new computer, dishwasher or flat-screen TV (or even a small appliance) when the clerk asks if you’d like to purchase an extended warranty.
You have a split second to decide yes or no. What should you do?
Both warranties and extended warranties, also called service contracts, provide repair or maintenance for a specific time with an important difference: a warranty is included in the price of an item; an extended warranty or service contract costs extra. The latter is an add-on that might not be worth the price. Some service contracts duplicate the warranty coverage that the manufacturer provides, some cover only part of the product, and some make it nearly impossible to get repairs when you need them.
Better Business Bureau Serving Northern Colorado suggests you consider the following factors before deciding if an extended service contract is a smart purchasing decision:
Is the product likely to need repairs? Check websites that offer information about products that are most likely to need expensive repairs. If you buy a reliable product from a company with a good reputation, a service contract might not be necessary.
Does the service contract really provide extra coverage? Make sure you know what the warranty covers. Compare the warranty coverage to the service contract to see if there’s any benefit to additional coverage. Depending on the terms, a service contract could last less than a year or more than five. Accidental damage may not be covered. And there may be clauses that allow the company to deny coverage if, for example, you don’t follow their instructions for routine maintenance.
How are claims handled? Find out the process for filing a claim and who takes care of repairs.
Start With Trust®. For more information on warranties and guaranties, visit your BBB’s Home Project Planner at go.bbb.org/1A97u28 and for more consumer tips and information go to bbb.org/.
~ Luanne Kadlub, Communications Specialist, BBB Serving Northern Colorado and Wyoming. 970-488-2044, Toll Free: 800-564-0370 Ext. 135, wynco.bbb.org Start With Trust®. 8020 S. County Road 5, Ste. 100, Fort Collins, CO 80528.