Tuesday, September 6, 2011

When is an extended warranty worth it?

In short, it all depends on what you are going to buy. Some electronics will be "obsolete" before you will ever learn how to use them. Others have been tried and tested, and will not likely to fail.

When buying a 800-1500$ computer, adding another 100$ to extend the warranty from 1 year to 3 years makes sense. Even if you get a premium item, something may happen to improper use ( poor ventilation and dust, spills etc.) It is also possible that a manufacturer, or even several have made some faults in the production due to an unexpectedly large demand ( ie. LCD, LCD's LEDs, hinges, fans, nVidia GPU, keyboard etc. )

If a manufacturer offers extended warranties, it is quite confident that the machine will not break under normal office use conditions in that period. Any repair wipes out the profit that would have been made on the device. Considering the costs of the tech support (25-30$ hour including overhead), service(40$/hour),  shipping(20$ and more) and follow-up, any service call is a huge blow to the company's profit.

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