Buying that extra warranty salespeople offer might seem like
a great investment – spend a few dollars now to cover you if that new car,
major appliance or electronic device breaks down. But often, even when
consumers have warranties, they either don’t receive the coverage they thought
they had or the process is more difficult than expected.
“Warranties work if you fully understand them going in,
remember that you have them and apply them as spelled out in the fine print,”
says Angie’s List Founder Angie Hicks. “Trouble is, most of us never read the
fine print, forget that we have the warranties, can’t find the paperwork when
the product breaks, and we can’t easily navigate the bureaucracy to get the coverage.”
Angie’s List (www.angieslist.com),
the nation’s leading provider of consumer ratings on local service providers,
has tracked consumers’ experiences with warranties for years. Home warranty
companies have earned the worst grades from Angie’s List members for four years
in a row.
An Angie’s List poll conducted of its members nationwide in
late June showed that 60 percent of respondents who have warranties covering
home repairs got them as part of the purchase of their home. Most of those
warranties cost between $250 and $500. More than a third of the respondents had
never tapped into them. And most never read the documents.
Another Angie’s List member poll conducted in September that
focused on appliances showed that 42 percent of respondents have purchased
extended warranties for items like washer, dryers and refrigerators. While 37
percent couldn’t even remember how much they spent, another third spent between
6 percent and 10 percent of the products’ cost on the warranty. Only 14 percent
of those who purchased an appliance warranty said they would do it again and
more than 40 percent of those think it was a waste of money.
So what’s a smart consumer to do?
“First of all, don’t make a snap decision and be sure you
fully understand what you’re buying and how it works. Even if it’s a freebie
that comes with closing, make sure you understand it or you’ll get exactly what
you paid for,” Hicks said. “Do the cost/benefit analysis and then put your
documentation where you can easily get it if you need it.”
When it comes time to collect on the warranty and you’re not
sure if you’re covered, ask your repair specialist about it or go to the
manufacturer directly.
“The very best service companies will prompt you about
warranty coverage,” Hicks said. “But I know firsthand about consumers, whose
products were fully under warranty, still paying the full cost of repair – and
we’re talking hundreds of dollars – because they forgot to check their warranty
documentation and the service companies didn’t advise them otherwise. One of
our members said that it was only later, when talking informally with another
service company, that she realized she could recover some of her costs. Months
later, she’s still waiting for reimbursement.”
Another Angie’s List member reported having to make 10 phone
calls and wait two months for her microwave oven to be repaired under warranty.
One member said he had to drive an hour away to have his item repaired under
the extended warranty.
“Who has time for that?” Hicks asked.
Angie’s List tips on purchasing warranties of any kind:
- Know your options: Your credit card company might offer an additional
warranty if you use its card at purchase. Many expensive items can be added to
your homeowners’ insurance policy for less than the cost of an extended
warranty. Some retailers offer extended warranties at no cost.
- Shop around: Warranties vary by price, detail and length of coverage
time and many can be purchased any time before the manufacturer’s coverage
ends, giving you a chance to try the item out and determine how well it works
and the potential for a defect.
- Read the fine print: Will the company send a repair
specialist to you or require you to send the product in for repair? Does the
company have an authorized center in your area? Also, ask your salesperson what
happens to the warranty if the store goes out of business.
- Check the terms: Your manufacturer’s warranty is free, so don’t buy
extended warranties that start from the date of purchase. Buy those that start
when the factory coverage ends. Most extended warranties do not cover
accidental damage. Your homeowners’ insurance may cover accidental damage,
though.
- Research the product: Before you buy, determine how the
product has performed in the past. Can you afford to repair or replace it if it
breaks? Would you be more likely to replace it anyway, rather than bother with
and wait for a repair? How quickly will the technology change and will you be
ready to upgrade by the time this one wears out?
- Fill out the warranty card: Your chances of knowing about
defects and having a good experience increase if the company has your
information on file. You will also likely get a notification that your warranty
coverage is set to expire.
- Don’t feel pressured: Some retailers allow 30 days after
the purchase to make a decision to buy the extra coverage.
Angie’s List is where thousands of consumers share their
ratings and reviews on local contractors and companies in more than 425
different categories. Currently, more than 1 million consumers across the U.S. rely on Angie’s List to help them find the right contractor
or company for the job they need done. Members have unlimited access to the
list via Internet or phone; receive the Angie’s
List magazine, which includes articles on home improvement and maintenance,
consumer trends and scam alerts; and they can utilize the Angie’s List complaint resolution service. Get more
information about Angie’s List at http://www.angieslist.com Read Angie’s blog at http://www.angiehicksblog.com.