Phil Kane wrote:
On Mon, 01 Oct 2007 03:24:02 -0700, wrote:
I've worked in sales, but I tried to avoid lying. For example when I
was in college I worked for Sears. They instructed me to "sell
extended warranties" I complied, but I also told the customers that I
thought it was un-necessary.
Recently I had an expensive Nikon camera damaged by being knocked off
a table to a concrete floor. Had I not had an extended warranty
policy (read: insurance) the repairs would have cost me almost half of
what the camera cost, because they had to send to Japan for major
repair parts to rebuild it. ..........
Well there are exceptions to every rule, and your hyper-expensive
camera is that exception.
But in the case of a GE Refrigerator or a Sony stereo, an extended
warranty would be a waste. These items are so cheap & readily
available that, should they fail, you can easily take the ~$100 from
the "extended warranty" (which I the salesman told you not to buy),
and use it as downpayment to buy a new fridge or stereo.
The thing is: Most appliances DON'T fail. They follow a mortality
curve:
- HIGH - birth mortality (as a result of manufacturing flaws) -
covered for FREE by the manufacturer
- LOW - middle-of-life - virtually no failures.
- HIGH - geriatric mortality - around 15-20 years - the parts are old
& die - which is NOT covered by extended warranties, because these are
only 5-7 years in length.
The reason why Sears pushes salespeople to sell "extended warranties"
is because that's where the money's at. 99% of customers have no
problem whatsoever (or if they do, it's covered by the manufacturer's
FREE warranty, not sears), and thus Sears gets to pocket the money as
almost-100% profit. ----- Want to get rich? Sell insurance on
brand-new products, and make sure it expires at around 5 years, that
way you won't have to pay out, other than a few dollars here & there.
I bought an extended warranty for my Dodge Avenger. You know how many
times I used it?
- zero
- and when the Avenger eventually started failing (10 years), the
warranty was expired.
- and thus I wasted $700 for nothing.
I'll never do that again.
Similarly, I had a hard disk die a few days after the extended
warranty period expired, and CompUSA was good enough to "stretch" the
expiration date and give me a new one at no cost.
Yeah. But. You probably could have bought a brand-new hard drive,
same size, for the same amount of $$$ or just slightly more expensive,
as the extended warranty cost.
I just bought a 300 gig drive for only $70. They are dirt cheap
Cheaper than buying the crummy service plan.
I believe in extended warranties.
I don't. Everything I buy seems to last forever. If I bought
"extended warranties" I would just be wasting my money (see the
Avenger example), since I would never use them.