Warranty: Worthwhile or Wasteful?

Nice alliterations, right?

Anyway, my T61 just arrived and when I purchased it, I only had the built-in basic warranty service, which I felt was fine initially. I had read around that supposedly many buyers feel like an extended warranty is a waste seeing as many feel that their computer's problems will crop up in the beginning rather than 1.5 years into the deal.

I just received an email telling me that the warranty will expire in 90 days and that I have the option of purchasing up to 1 year after the purchase of my new notebook. And I am thinking it might be something I want to do. But when I bought my Dell 6 years ago, I had a full blown 3 year - and I only needed it immediately when I had DVD-ROM clicking.

What are your thoughts on warranties and is it worth getting an extended warranty beyond the basic offered?

Thanks

 

I always get the 2 year warrenty. It is better to be safe than sorry

 

Extended warranties are a gamble. I personally view them as throwing away money. It's bitten me a couple times (never on a laptop), but never so much where I was like, "If only I had bought that $300 4 year warranty, I wouldn't be standing in this ditch with nothing but a shoe and a rubber band!"

 

I usually buy my notebooks online and rarely get any international warranty. I'm from Kuwait, so I only get a warranty when I buy locally. Haven't had any problems, still voted for one year though.

 

It is a crap shoot - had two that had warranty problems in the first year, one had no problems in 3 years and one that had a problem in year one and then in year 3. I would lost money on all but the last one. My latest has 2 yr w/accidential which after all that I read seems to be the sweet spot - and is a little less than 15% of the total price.

 

The way to determine whether you should buy warranty is if you can afford the repair or replacement of the item out of pocket. For a laptop, the repair bills typically are high because the parts are proprietary. Therefore, I think it is a good idea to get the extended warranty.

 

It's indeed quite a blind guess shot. It also depends where you live and what are the laws in your region. Here, where I live, we have what is called the "reasonable appliance life expectation" that protects customers, and this, regardless of the manufacturer warranty. This means that if I buy a TV with 1 year warranty and it breaks after say 3 years, I go to court and if the verdict is favourable, the manufacturer is forced to provide warranty coverage. For a TV, this normal period is probably at least 5 years. If you are in region that offers such buyers protection, buying warranties is truly a waste of money. More than that, even when you pay, it is often problematic to reclaim for service with the manufacturer.

I would stick with the provided warranty and absorb the cost IF it ever occur. The idea is that if you never buy extra warranties, overall, you will save loads of money. Why? Because you may be unlucky with one or two devices while you save on tens of devices you buy. Moreover, the cost for repair on average will be about the cost of your shiny 3 years full coverage warranty update. 1 year is standard for new hardware and I would think it's ok in most cases. If you have 90 days, I assume it's a refurbished unit. Then it is less clear if it is safe. Still, if it was bought here, I could again use the above law to get service beyond 90 days.

I also agree with msb0b. The decision is based on your capacity to absorb an unplanned event. It is exactly the same as buying insurance for a home or car. The less money buffer you dispose, the more insurance should be used. The more money you have, the less the insurance level you need. The other principle is, the costlier the item, the more insurance it should get. Insure what would put you in debt the rest of your life and don’t for the rest.

 

Also consider how badly the companies want you to buy them. They're pure profit on most of the units sold.

 

Absolutely right... My principle is: when a business wants you to buy or get a given product or service... they usually make money on it... that means you LOSE money.

 

Honestly in my experience if you buy the warranty nothing is going to happen. If you dont buy the warranty many things are going to mess up. At least that has been my experience with electronics.... you gotta love it. So I look at it, is another 150 bucks worth it to guarantee I wont have any headaches for three years?

 

I agree with marcbe. Howver, I did buy a 3-year warranty on my T61p since it was $80, so I figured it was worth it. But if you never buy warranty on anything, you will probably save you money in the long run. Companies make money off of selling warranties. Products are designed to out-last the warranty associated with their product. I may be wrong, but that's what I've thought. Now I'm not sure if that applies to the standard warranty provided or to the extended warranties too, but I'm assuming it does. Because in the end it's all about money. If selling warranties wasn't profitable, they probably wouldn't do it.

I guess the deciding factor should be how well you take care of it, and the warranties cost relative to the product. I thought $80 bucks was cheap for 3-years so I bought it.

 

DING! We have a winner! LOL! Best post of the day!

This is always a subjective, and heated, topic. This time, I chose to not worry about it for 2 years.

Also - if you bought it with AMEX, they will extend the mfg'er's warranty. In your case 1 to 2 years. But you have to file claims with AMEX.

 

sorry - slow response - double post.

 

I didn't, sadly, because I got a visacardholder's discount. I love AmEx, they covered the cost of an accidental damage that I had when I first got my Dell (then they didn't have the coverage, but it was a bust anyway because AmEx includes it for their clients).

I think I have one-year depot service built in.

 

Totally agree. warranties are a huge big profit center for product retailers. I do not know about lenove specifically, but it is not uncommon for a retailer to net more profit on the warranty then the product itself. In the long run, (over time and more than 1 purchase) you will pay more with the warranty up front, but in the short run, or in any specific example, anything can happen.

 

it's always better to have warrantee on valuable electronic devices. my mom bought a Sony big screen TV (with an extended 4 year warrantee). Guess what? in the third year, a component failed and we had it fix through in-home service. in short, you'll never know what might happen. just play safe.

 

How much did the warranty cost and how much would the repair have been without it? A lot of times TV warranties will include a free bulb or something that basically evens out the cost of the warranty. "You never know" is exactly the mindset the companies selling you warranties want you to have. It's called Fear Selling.

 

Yeah, its basically like poker. If the pot odds aren't in your favour to call but you do and you hit your draw it doesn't mean calling was the right thing to do. Except in this case, odds are probably always in the companies favour. I could be wrong, but that's what I'm assuming... But it was good to buy warranty for earlier generations of iPods... not sure

 

Okay, so here is the deal - I have a one year limited warranty that is built into the product.

 

That's standard and plenty IMO. If you aren't sure if your new machine is strong to hold the road, just use it more hours each day A good excuse to play more with your new toy If it sustains heavy use during the first year, you're pretty sure it is strong for the long run.

 

I tried to rep you.

Apparently I have done it too many times. I asked my Dad, and he said that should be fine. I guess if these things can survive a crash test, they can servive life on a desk.

Though I have seen many a dopey technician conquer a sturdy machine in one foul swoop.

 

Don't let any dopey technicians touch your box. Guaranteed to extend the life of any computer.

 

For the moment my plan is to not get an extended warranty. I plan on tracking down a stress/burn-in program and running it shortly after receiveing the machine. I'll run this again near the end of the 1 yr Lenovo warranty. By purchasing with my Visa card I also get a second year of warranty through Visa that they claim duplicates the original warranty.

 

Its already been said, but Ill say it again.

Statistically extended warranties are a rip off. Companies make money off of warranties. That means that on average they have to pay out more than they pay in. This means that on average for you, the consumer, you will spend more on warrenties in your life than you get back when you file claims.

The best thing to do is self warranty. As long as you have an ounce of self control, put the money you would spend on the warranty in an account everytime you buy a product. If the product breaks and the original warranty is gone, you can rebuy with the money you have saved. This gives you the control over whether you want to replace, repair, or go with a different brand. It also gives you all the profits that would otherwise go to the retailer.

If you have self control, save your warranty money, over a lifetime you will come out ahead.

 

and

I agree with you both.

Let me add an additional spin: I use the price of the warranty as a method of assessing the quality of the product. If the warranty is expensive, this means either the manufacturer is excessively greedy, or is betting the product will fail.

I was impressed that my Thinkpad came with a standard three year warranty--this suggested to me that IBM (and it was IBM back then) was confident in the reliability of their product.

 

Thanks to you all for your input, it has really helped me gain some perspective, and I think what I had read and heard over the radio at the onset was correct - that many feel it is a rip-off, most problems occur in a few months, and that you are better off saving (technology changes so quickly as well). Plus, I forget that I can ask people who are friends of the family to repair it for little more than parts should something go wrong and I have no warranty.

 

I think I saw such a test utility within the ThinkVantage utilities that comes with the ThinkPad... If not, it may be in the BIOS menu... But I know I saw it somewhere.

These are two of the best advices you can get regarding warranties. If you can manage to put your savings in a placement that has a good %, you will save even more as DieCommie said.

 

It all depends on the price of the warranty, your risk assessment, and your expectations on the useful life of the laptop.

An over simplified assessment of the value of getting a three year warranty could look something like this:

Say you pay $1,500 for a laptop, and you expect that it has a useful life of 4 years - with straight line depreciation, that means it is depreciating by around $375 a year, so the average value of the laptop will be around $940 over the period of the three year warranty. Now let's say you figure you have a 1 in 10 chance of requiring significant warranty service (i.e. requiring a replacement)... with those odds, an oversimplified value assessment for a three year warranty would point to buying the warranty if it costs $94 or less.

For shorter warranties, while the average value of the laptop would increase linearly, the odds of requiring servicing would probably decrease exponentially, and so the value to you of the warranty would go down, so you should expect to pay less (and which is why they cost less).

Yes, I know this isn't proper risk assessment math - but it can serve as a rough rule of thumb.

You can also do this calculation in reverse - since the price of the warranty is a given, use it to see what they are indicating as being the likelihood of requiring servicing, and then see if that is in sync with your risk assessment.

 

And that's why I didn't give a response to the poll - my answer would depend on too many factors - sometimes the warranty isn't worth it, sometimes three years may be worth it.

 

It seems when it comes down to warranty, it's either you get none, or go all out and get the most extended.

Very interesting poll.

 

i went ahead and got the 3 year depot. was going to go 2 yrs, but $40 more for another year seemed like a decent deal - "might as well"

 

That is what I noted about it myself - it is a close game between all or none. And, what they want me to get is a protection and service coverage, so here are the prices:

I already have a one-year depot service warranty!

1 YEAR THINKPAD PROTECTION AND 1 YEAR ONSITE SERVICE $119.00
2 YEAR THINKPAD PROTECTION AND 2 YEAR DEPOT SERVICE $199.00
2 YEAR THINKPAD PROTECTION AND 2 YEAR ONSITE SERVICE $249.00
3 YEAR THINKPAD PROTECTION AND 3 YEAR DEPOT SERVICE $279.00
3 YEAR THINKPAD PROTECTION AND 3 YEAR ONSITE SERVICE $349.00

Here are the specs on my new machine:

6459CTO THINKPAD T61 WIDESCREEN-1Y
43Y3426 SBB INTEL CORE2DUO PROC.T9300
42V8011 VBB MS WIN VISTA HOME PREMIUM
42X1954 SBB MSWVISHMPRM64 US ENGLISH
42V8287 SBB 15.4 WSXGA+ TFT
42X5975 SBB NVIDIA QUA. NVS 140M-128MB
41W2067 VBB 3GB PC2-5300 667MHZ 2DIMM
42V8195 SBB KEYBOARD US ENGLISH
42V8295 SBB UN(TRACKPOINT TOUCHPAD)
42V8166 SBB 160GB HDD,5400RPM
42V8172 SBB DVD REC.8XMAXDUAL LAY UB-S
42X0805 VBB PC CARDSLOT EX CARDSLOT
41W1685 SBB 11ABGWIFI WL LAN USEULAANZ
41W1508 SBB 6 CELL LI-ION BATTERY
39T6442 SBB COUNTRY PACK NORTH AMERICA
42X1524 SBB LP-US ENGLISH
42V8607 SBB INT.WLAN ANTENNA 15.4"
42X5978 SBB NVIDI QUA NVS140M W/WW,AMT
42V8063 SBB MS WAU ENGLISH NA-U MODELS
42T7135 SBB INTEL LABEL CORE-2
42V9665 SBB FCC, LABEL
42V8629 SBB 15WSXGAW/OBTW/OWWANW/OUWB
39T6440 SBB 56K V.92 DESIGNED MODEM
42V8653 SBB CL.PLATE T61 WLAN
41W1748 SBB GEO LABEL US WLAN
93P7250 SBB THINKPAD LOGOPLATET-SERIES
42X0877 SBB MT 6459 SYSTEM LABEL
42X0850 SBB MECH MISC PARTS
42V7972 SBB MS LABEL (VISTA PREMIUM)
42V8601 SBB NO UWB ANTENNA
42X0995 SBB PC CARD SLOT EXP.CARD SLOT
42V8612 SBB ST LCD COVER/BEZEL 15.4"
42V8300 SBB 1GB PC2-5300 DDR2 667MHZ
42V8301 SBB 2GB PC2-5300 DDR2 667MHZ
42T6638 SBB PACK. US, 15.4"

Hopefully this gives you some perspective on what is going on. I think I will be cool - I just find it interesting that it's all or nothing. Visa should extend my warranty, I think...I will have to research that.

 

Unrelated, but you could have purchased a 2GB dimm from Newegg for ~$35. What'd they charge you for it?

 

I think the upgrade from 1 to 3 was btw 40 and 60....my research didn't go far enough, because after I made the purchase, I realized that is what I should have done. Hind sight 20/20. All in all it cost me 1080.97 before tax.

 

Nice approach to the problem. This being said, the only part I would relativize is the part where you say that the person should thus buy a warranty of X$.

I would still do my own warranty using a bank account and use the amount X you calculated above as a reference on how much I should save per year into that account as a minimum. This is more cost effective but you are less protected if a major repair occurs right after the first year. Still, the principle I stated earlier is that for a 1000$ device, the price is sufficiently low for many to consider it an "absorbable" loss should something occur. I personally accept to absorb a possible mishaps as, statistically speaking, over a life-time, you will still be saving more money than if you bought an extra warranty on all your purchases, small or big ones. I bought an extended warranty for a 200$ VHS a long time ago (I was a naive student at the time ) and never used what I paid for. I took it once for an annual cleaning (I had like 3 free in the package) and felt so badly ripped off that I forced myself to ask for that cleanup just to convince myself I had something for my money I wouldn't use the bank approach to insure my house thought

 

I think what I might do, is if I want to spend 280, put that in a CD over and over again, and if nothing happens, I buy myself a nice present....

 

Now that I think about it, with the way interest rates are right now, it may be more worthwhile to get the warranty and accidentally drop a sledge on the laptop a few times in 2-3 years.

 

Erm, we will say you did not write that Ben and we didn't read it.

Seriously, even at 0% interest, I would still bank it on my own. If you buy warranty, it can only serve one purpose... and only IF something ever happen. The statistics are against the customer most of the time. If you auto-insure, if nothing happens, at least you recover your money.

I would only advice one to buy warranty if he is so poor he can't save 90$ a year just in case... but then, he is probably too poor to afford the laptop in the first place...

 

Well that's kind of the point of the calculation... you find out how much you would want to set into a bank account to reasonably cover any expected repairs/servicing, and then if the warranty is a penny less, you're better off with the warranty... PLUS you are covered in case that major repair is required

 

but yeah... for me anything under a thousand dollars, I would rather save my money and assume the risk of potentially having to cover the full amount somewhere after the standard warranty dies

 

Yes, the US economy is in the crapper, I am well aware (Spain is kicking my bank account like a football (soccerball for those of you in the US)).

I think I will take my chances that I am not a klutz, that Visa extends my warranty, and that I should be able to cover any repair outside of the 1-year depot warranty.

 

I have had a T40, T41 and T42 in the last 5 years. The T40 backlight started going out after 4 years (out of the 3 year warranty so I unloaded it with full disclosure). The T41 motherboard had the "graphics chip" problem after 4 years (out of warranty, still seeing if its reparable)and the T42 motherboard had the "USB > death" problem after 2.5 years (replaced under warranty). Just bought a T61p with a 1 year warranty and upgraded this to 5 years after the fact from Lenovo ($240 after haggling).

 

Wow, you've got to share your negotiation techniques!



As for me, I've had a 3-year on-site plan with my T42 and had my board replaced twice over 2 years. The first time, it was the case flexing and damaging the board, the second time a water spill right into the side ports. (the Lenovo rep thought however that it was the case flexing issue again, and replaced it free of charge )