OT: Extended warranties from Best Buy

[cedar]

Yesterday, I bought a Dell Laptop. Total price was over $2K. Salesman told me that it came with a very basic, 1-year warranty and was pushing me to buy a 3 year warranty that would supposedly cover everything, including spills. In the past, I've purchased these warranties, but I decided to think about it this time. The extended warranty from Best Buy, I think, cost between $250-$300.

 

Does anyone have a view whether it makes sense to buy this type of extended warranty from Best Buy?

[KenElevenShadows]

I have experience with their extended warranty with cameras, which is generous, and something I would recommend. I don't know about computers. They seem to have good service and return the camera promptly, so I would assume it would be the same for laptops.

[bennyray]

In my mind these extended warranties are almost like car extended warranties and are usually not worth the money. But as soon i say this someone will come up with some other theory. But it's your choice in the end. If you take care of your laptop i think you should be fine. Generally what i hear any extended warranty is not worth the money but i am sure it has come in handy for some people. Confused yet

[junkcar]

Something I wish I had started doing long ago is to take the money the extended warranty costs and put it instead in a dedicated bank account.

 

I figure that the cost of two or three extended warranties for cars I have bought, along with others for appliances, would pay for all the repairs that could have happened. (Emphasis on the could, most repairs except for one never were needed).

[Markyboard]

Not big on the extended warranty although I did buy them for both my kids Dell laptops as they went off to college. I was mostly concerned with the seemingly inevitable phone call, Daaaad....

Ext war (3 year total) on each laptop purchased direct from Dell (they also cost around 2K each) was $100. The last one was 2 years ago but still $250-$300 seems expensive. Haven't used them yet - my son' expired by now so turns out to be money wasted.

 

This was the only time I ever purchased an extended warranty. $900 iPhone, Ipad...not, cars - never, nothing else. I guess I'm willing to take my chances and most of the time it's paid off. Years ago had I had one on my old Avalon I could have saved $700 on a fuel pump; the warranty cost a lot more.

 

But that's it. Except for 2 weeks ago when we called a repair guy about our fridge that isn't getting very cold and has condensation on the inside. Turns out after him telling us it couldn't be repaired we discovered they threw in a free extended warranty (5 years total on it and out dishwasher) just under 5 years ago. Waiting on new evaporator coil and compressor - all covered. Sometimes you get lucky.

 

What was the question?

 

 

[Markyboard]

Just remembered about 7 years ago or so Best Buy wanted to sell me an extended warranty on a $100 DVD player; 2 years total coverage instead on one. Cost for the ext warranty $60. I couldn't believe it. I asked several employees standing near by if they would buy one - they said yes.

 

I learned that Best Buy employees are very well trained.

[cedar]

The salesman was trying REAL hard to get me to purchase the warranty, which only had the effect of making me more suspicious. I had the sense that his compensation was tied into selling those warranties.

 

I have a love/hate relationship with Best Buy. They are a vanishing breed, one of the few major retailers that has a decent amount of merchandise on display. But I find that they are grossly understaffed and the staff has only the bare minimum knowledge of their own products.

[Lindaru]

We switched to Best Buy after Circuit City went belly up. I have mixed feelings on that, too, but definitely have the Murphy's Law thing going on here.

 

Everything we purchased extended on (computer, LCD televisions, DVD player) has been holding up just fine. Other things we did not bother because they would be cheap enough to buy new ones (printers, DVD/VCR combinations) gave out within one to two years of purchase.

 

We base our decisions on cost of replacement to cost of warranty with how long it is good for.

 

Been working for me.

 

 

[ChrisDespo]

Check with your credit card company - sometimes they double the manufacturers warranty for free when you use their credit card to purchase the item. Happened to me 2 years ago with a Vizio TV that died shortly after the manufacturers warranty ended (I think the manufacturer warranty was 12 months and it died around month 18) ... after talking to the tech support guy it sounded like a new screen was needed which would've cost more than a brand new tv! Luckily I remembered that the tv was purchased on a credit card and I thought about calling them to see if they double the warranty, and to my delight they said "yes" .. took a bit of digging for the paperwork and getting a written note from Vizio regarding the replacement cost but the credit card company refunded the total cost of the tv 100% and I used it to get another (bigger, cheaper than the first one) ... they didn't even ask me to send them the broken/dead tv - I just trashed it (actually took to recycle center) ... moral of the story - call your credit card company if you have an issue with any major purchase to see if they double the manufacturers warranty - you might be as surprised as I was!

[B3bluesman59]

I had the sense that his compensation was tied into selling those warranties.

_________________________________________________________________

You can count on it......and maybe his job too.

 

[HAMEGZ]

I purchased the Geek Squad warranty on my Microsoft bands,

So far I have been through two band 1s and now on my second Band 2.

All the times no questions asked, just went and got the replacement from store stock, the last time they credited me with the difference i paid initially and what the band was selling for that day, plus rolled my warranty over to a new expiration date.

Cost me 39.00, I feel well spent on this purchase.

 

[DulceLabs.com]

The salesman was trying REAL hard to get me to purchase the warranty, which only had the effect of making me more suspicious. I had the sense that his compensation was tied into selling those warranties.

 

Yes the salesmen make a very nice "spiff" off these warranties and the store makes a nice profit. Every "consumer expert" says just say no to these warranties and put the money "aside" (either in an actual account or just in your head) to cover damages.

[ElmerJFudd]

Is this purchasing of extended warranties from your dealer and not the manufacturer strictly a US thing?

 

How are manufacturer's warranties comparatively in the EU? As encompassing as what's offered in the states? longer or shorter? Are dealers in Europe working this cash machine as well?

[The Real MC]

Extended warranties at BB are a well known long time scam. Even Consumer Reports discourages buying extended warranties. The only thing that they do is to fatten up the corporate bottom line.

 

The salesman was trying REAL hard to get me to purchase the warranty, which only had the effect of making me more suspicious. I had the sense that his compensation was tied into selling those warranties.

 

Your sense is correct. The corporate heads are pushing the sales of extended warranties, since that is where some of BB's profits come from.

 

But I find that they are grossly understaffed and the staff has only the bare minimum knowledge of their own products.

 

That's what Circuit City did shortly before they folded. Not a good sign of the health of a retail store.

[KenElevenShadows]

I'm one of those people who almost never purchases extended warranties. And I'm not trying to talk anyone into doing it. They're usually not worth it.

 

But I did want to say this since the question is about Best Buy specifically:

1.) The Best Buy extended warranty on cameras was, at the time of purchase, $40 for something like three extra years, which is not very much money for something that costs $1200.

 

2.) The Best Buy extended warranty is extremely comprehensive. If you drop it and it breaks, it's covered. If you get salt water on it, it's covered. Simple. Wanna know how I know for sure? I got salt water on my camera and it stopped working.

 

3.) I dropped off my camera, and to my surprise, received a call a week later, saying it was ready to pick up. That's pretty fast. They not only fixed the camera, but cleaned up some sensor dust and gave the camera a thorough cleaning.

 

4.) I didn't pay a cent.

[mate stubb]

I never ever buy extended warranties.

 

UNLESS I am buying a laptop for one of my kids at best buy.

 

They can fill those things with spam and virii faster than I can clean them off. I just send them back to BB to get them cleaned off now.

[KeyMoe]

Rarely buy them. Depends on the cost of the item and the cost of the warranty. But I did buy one on a early version of the iPod and it did pay off. As earlier stated Best Buy immediately replaced without any hassle. Although that was years ago. Not sure how the warranty process works now.....

[ShadowMan]

I'm the opposite of most posting here - and usually do get a warranty on high cost items, and it has always served me well.

 

Years ago I bought a 50" LCD TV at Best Buy with the warranty. With about a month left on the warranty a few pixels went - and they gave me full credit for the purchase price. So I applied that to a replacement DLP. That one started going thru lamps, which they covered twice. When the third one went they gave me a fair pro-rated credit. Which I applied to a 55" Samsung - and it still works like a charm.

 

I've had equally good results with extended vehicle warranties as well.. Many years ago I bought a 1000k bumper to bumper package on a truck. Aside from replacing the air conditioning compressor (replacement cost equal to the warranty), the engine started burning oil badly - and at 99,400 the manufacturer rebuilt the engine. (Would have been twice the cost of the warranty)

 

Of course, your mileage may vary.

[drawback]

I've always thought extended warranties are how they make up the margin after discounting the price.

[aronnelson]

I really like the Best Buy Warranty. If your device is no longer available, they give you full credit towards another. I had the warranty on Apple EarPods and they broke and broke and it made up the price 5X over easily. I've never had problems with the warranty - I purchase it all the time because it was reasonable. I got the warranty on my iPad Pro but I believe it's just an extended Apple Care on that one. In any case, Best Buy is the place where I do purchase extended warranties. Otherwise, usually not.

[HammondDave]

Just buy it with a credit card that doubles the warranty. Several cards do this. Or better yet, buy from Costco. They automatically double the warranty and have a very generous return policy (no questions asked).

 

You are basically betting against your luck when you buy an extended warranty. Remember, if the company was not making millions of dollars from foolish customers buying these warrantees, they would not be selling them.

[DulceLabs.com]

Or better yet, buy from Costco. They automatically double the warranty and have a very generous return policy (no questions asked).

 

 

You ain't kidding. Although I haven't had the need to return anything, I know several people who have ---- some amazing stories out there!

[cedar]

I have mixed feelings about this, which is why I started the thread.

 

I do think it's fair to say that Best Buy honors the warranties without much hassle; I've bought warranties through them before for my kids' computers and had occasion to get repairs done. My recollection is that the repairs took about a week or two, which seems reasonable.

 

But something this time made me think twice, perhaps just the aggressiveness of the salesman.

 

One more point: I really wonder how long Best Buy is going to be around. It seems like it is the last electronics retail brick-and-mortar giant still standing in the US, and as I noted, they always seem under-staffed to me. Maybe they've been strengthened by the demise of their competitors or maybe it's just a matter of time before they disappear too.

 

I have another 2 weeks to make a decision on the extended warranty, by the way. I'm going to see what Dell offers directly by way of extended warranties and then decide.

[Synthoid]

I've always thought extended warranties are how they make up the margin after discounting the price.

 

That, and various accessories as well. Can you imagine paying $80 for a plastic smartphone case?

 

[Marzzz]

I've always thought extended warranties are how they make up the margin after discounting the price.

No, that's what selling you the expensive cables is for....

[Synthoid]

But they're the best!

 

 

http://www.blogcdn.com/www.engadget.com/media/2007/08/monsterhdmi_speed.jpg

 

[timwat]

Extended warranties ( in general, not just BB) work for the very small fractional populace who actually file a valid claim. Hence it's no surprise to find a few folks here who have benefited.

 

For the rest of the purchase events, EW are pure profit for the seller (and the warranty provider). It's actually a durable portion of a BB salesman's income. And consider how often you run into additional warranty offers from a car dealer's finance officer.

 

Make your decision accordingly.

 

Now, that being said, this is the same basic actuarial gamble as purchasing insurance. You seldom file a claim. But in the case of auto and homeowner's insurance, the relative unlikelihood that you'll need to file a claim is offset by level of potential financial loss when you might.

 

And of course with life insurance, there is 100% chance that the insured will eventually die. A winning bet!

[Markyboard]

And of course with life insurance, there is 100% chance that the insured will eventually die. A winning bet!

 

Personally, I would never buy the extended warranty on a pacemaker.

[CaptainUnderpant]

From my limited education as a "Certified Financial Planner"

 

Never buy insurance on something that is "Likely" to happen that you CAN afford.

 

Always buy insurance on something that is "Unlikely" to happen that you CAN'T afford.

 

This is simple logic. It is based upon the fact that insurance for the consumer as a whole is not profitable. For every dollar an insurance company brings in they have to pay out less than a dollar for it to work. So insurance as a rule of thumb is a loosing proposition and should only be used under two circumstances. One, when the resulting loss would be catastrophic to your financial well being, AND two, it is very unlikely to happen, and therefore the premium will be very small in relation to the payout.

 

Of course this statistical model could be adjusted if you think the product you are buying could have a lot of repairs, the warranty seems below market AND you are the type of person to make use of the warranty, AND the company backing the warranty will still be around, AND the company has a track record of paying out.

[MoodyBluesKeys]

Not backed by statistics, but my expectation:

Extended warranty - 80% buying lose money, 10% break even, 10% come out like a bandit.

 

I usually don't buy - I am an electronic tech. I did buy on some more expensive items, where the warranty was reasonable (55" HDTV). I also bought three years on the 2012 Volt that I purchased used last year. Actually hope I don't have to make a claim, but some of the stuff in modern cars is WAY expensive.

 

True tale: When my wife purchased a new Chrysler LaBaron convertible in the early 90's, she overruled me and bought the warranty. A couple of years into the warranty, the automatic transmission died (when she was in the Norfolk-Portsmouth tunnel). She did come out like a bandit. But we both chose not to buy on the new clothes dryer that we bought last Saturday.