When buying large electronics or appliances, is a service contract really needed? How many times have bought an appliance or a Plasma TV and before you can fully decide if you are going to purchase the item, the sales person is suggesting a service contract to cover the item just in case something goes wrong?
Purchasing a service contract is always expensive and its usually for a year. The one thing that happens after purchasing the service contract for a number of years and service is never needed, you never get that money back. In other words the sellers really get over on selling these contracts and on top of that they really get to you when they say to you that it will cost a lot more if you have to find a repairman who will charge a lot more without a service contract. What a bunch of Malarkey!!!
Yes, I do agree if you are a careless person around your appliances and electronics and the problems are caused by you, then by all means buy the service contract. I think most department stores make a great percentage of their money via useless contracts. For the most part the manufacturers warranty is only for a year and if the item has been troublesome it always stops working “AFTER” the warranty has expired. What a bummer! That is when you need to do some research to find a repairman or purchase a service contract that is way too expensive and they place limits on what they cover. It’s really a great racket that the sellers have going and they always come out on top and the winner. “William J. Lynott from: AARP Bulletin gives you an idea of what you need to know before you sign up. It’s not all inclusive but he gives you good ideas on what to do and a starting point.
The next time you buy a home appliance, a piece of electronic gear or a new car, you'll almost certainly be asked to purchase something called a service contract, maintenance agreement or extended warranty.
Regardless of what they're called, they are all a form of insurance and, like all insurance, they may or may not be a good deal for you.
Keep in mind that salespeople are motivated by generous commissions to sell them. In many cases, you would do well to resist. Here are some points to consider as you decide whether to sign up.
How much will it cost? One consideration is how the contract's cost compares with the price of the appliance. Paying $25 for a policy on a small appliance worth $75 makes no sense.
"If the cost of the agreement is no more than 20 percent of the product cost and provides at least two years' protection in addition to an original one-year warranty, it's reasonable to consider," says Dean Landers, owner of Landers Appliance in Baltimore. "I seldom recommend a service agreement on any product that sells for less than $400."
Am I paying for duplicate coverage? Find out exactly when the manufacturer's warranty ends and when the extended period will begin to ensure that you're not paying for duplicate coverage.
What's covered and what isn't? Most service contracts have specific limitations on what they cover. Don't assume that the contract will provide the same coverage as the original warranty — it probably won't. Check to see whether it includes labor as well as parts. Ask whether there's a time frame to commit to the contract — it's a good idea to take a copy home to read carefully.
Will my credit card provide coverage? Some credit cards give you extended coverage on certain purchases — check to see whether yours does”.
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