Are Warranties Worth the Cost?
Whenever you purchase a new gadget, the salesperson is bound to ask if you’d like a warranty with it. However, that’s a cost you didn’t plan on adding, so is it worth it?
Examine the Price
When considering a warranty, you must factor in the cost of the item you would be replacing. If you purchase a brand new iPad for $500, Apple’s $99 warranty might be well worth it even if you never need it. On the other hand, a low-end tablet that costs only $99 doesn’t require a warranty that costs the same when you can simply replace it.
Warranties can be tricky because you often pay them off over time, as is the case with phones. Your phone might appear to come at a discount when, in reality, you’re making several payments throughout your two-year contract. Smartphone insurance plans with major wireless carriers can cost around $11 per month, so you could be paying more than $100 to replace your phone, plus the insurance policy’s deductible. And replacing your phone after paying 18 months of insurance can cost up to $300. With that kind of money, you could get a brand new phone.
The price varies, which means there’s no right answer. A $120 warranty seems expensive for a $200 Chromebook, while the same protection plan is justifiable when you spend $1,000 on a laptop. Similarly, $55 for protection on a $200 DSLR camera for three years seems reasonable, while you would reconsider the same price for a $100 point-and-shoot.
If you’re not likely to have any cash available on hand to replace your device, consider a warranty. Best Buy’s TV protection plans start at less than $15, but the price quickly rises with the cost of the set. For some, the price is worth it because they’re really paying for convenience. If you can justify the convenience, go for it.
Read the Fine Print
Warranties aren’t as cut-and-dry and most people would like them to be. If your brand new iPad breaks, do you get a brand new one in return? Who provides the replacement? Will the company provide you with the same model, a refurbished one or send yours in for repair? How long will you be without the device that you need so much?
If you don’t get a device of equal value, paying for the warranty might be ill advised. Similarly, you might not be able to wait the time required to provide you with a replacement.
Finally, make sure that you’re not paying for double coverage. Most stores want to sell their own warranty, but if it offers the same or less coverage than the default manufacturer’s warranty, you should save your money. On the other hand, manufacturer warranties might not meet your needs, especially if they’re only good for 30 days. Be sure to do your research to find which warranty, if any, is suitable for your needs.