When an electronic item malfunctions and breaks, it can send your life into temporary disarray. Many of us rely on our laptops and computers for work and school, not to mention the strain the unexpected financial cost of replacing the item can place on your finances.
Extended warranties off a little extra piece of mind if sudden breakdowns occur out of the blue. However, the value of extended warranties has been called into question recently with many asking if the peace of mind justifies the additional costs they incur. For more information on extended warranties, read more here before we dive in and decide; are extended warranties on your electronic devices worth it?
What is an Extended Warranty?
Although it is called an extended warranty, they function more like an insurance policy than a warranty. Customers buy an extended warranty which covers the device for a set period of time, and if anything goes wrong, the warranty provider will finance the repairs or replacement of the device for that period of time.
There are a few cases where extended warranties may not be necessary. If your product is already covered under a free existing warranty, for example, your new iPhone may come with a 90-day warranty from the manufacturer, you would not need to take out additional cover for this initial 90-day period.
The product may also be covered by a store return policy. This can sometimes cover any malfunctions that happen in the first 30 days of owning the product. In these cases, an existing warranty may be sufficient.
How Much Will Repairs Cost?
Another aspect to consider when weighing up the value of an extended warranty is the cost of repair. If your new set of headphones might not break the bank to repair, it is probably not going to be worth taking out an extended warranty. However, if your laptop breaks, the costs could be fairly high to repair or replace the product. In these cases, extended warranties become worth the cost.
The Product’s Value
If the product’s total value is not that expensive, then it may be worth replacing the product yourself instead of taking out an extended warranty. As a general rule, if the extended warranty cost is more than 30% of the electronic device’s total value, it is not necessary.
If, however, the extended warranty cost is around 10% of the value, it is a good investment decision. For an extra 10%, you could recover 100% of the product’s cost.
What is Covered?
You should also consider what is covered in your warranty before you commit to passing up. Many good warranties cover drops and spills, the most common causes of electronic damages.
This means that even if you dropped or spilt something on your device as a result of your own actions, the warranty would finance the repair costs. These accidents are rarely covered on the standard manufacturer and store warranties and are often worth the additional purchase of an extended warranty.
In short, the value of extended warranties depends to a large extent on your own purchasing circumstances. For a big-ticket item that would cost a considerable amount to repair and may be prone to damage, it is always useful to have the extra peace of mind an extended warranty offers.