Buy the Extended Warranty

I have always been against extended warranties. Always. My theory is that, like gambling, the odds are loaded in favor of the house. And they are. The analogy falls apart though when you consider that the price of the warranty is a fixed cost, and not a black hole like a casino is.

But my thinking was this: not only was the cost, in the long run, more expensive, but by the time something did break (out of warranty), you'd want to replace it. Right? After all, technology progresses so fast that a 2-year-old computer ought to be replaced anyway, right? A computer dying just gives you a very good excuse for a new one. So extending the warranty simply enforces old technology on to you. Not good in my (old) opinion.

My previous post about AppleCare was one in a long string of recent incidents where warranty service was required by a client of mine. In every case, having the extended warranty was a God Send. And in every case the unit would have still been under warranty. So, the extended warranty was good not because the repair was covered cost-wise, but because the level of service offered was much greater. Think about it: there is a huge difference between obtaining service from a service provider, and obtaining service from an entity who thinks of you as a long-term customer. Add to that the fact that AppleCare gives you on-site coverage, and you've changed my mind.

Now, not every extended warranty will be the same, so you have to use your judgement here. But when it comes to computers, any warranty plan that includes on-site service will get my dollars from here on out. So Apple and Dell will both get my warranty business, and any other significant purchases from vendors offering extended, on-site warranty, will get my dollars too.

As a related anecdote, my father bought me a Nikon Coolpix 5700 camera for Christmas in 2003. This camera is a great pro-sumer camera. I found him a "deal" online for $200 below list price ($899, it cost $699). Dad, being a retired real estate broker, was a sucker for the add-ons. (He always told me that a sales person was the easiest to sell to, and he is proof.) So, he bought an extra generic memory card, a set of lens filters, a carry case, a spare battery and the extended warranty. He spent as much on the extras as he did on the camera: $700 worth of extras that, separately, could have been bought for $200.

But, the warranty was a smart deal. It is a 5-year warranty. He bought two of everything because he bought one for himself. His camera went back for repair last year. This year, just before my 4-year-old daughter's Christmas program, my camera died. It worked in all respects except that the CCD must have blown up, click on the previous link for examples. So that's two cameras repaired in less than a year, with 3 years left on the warranty. That's a good buy.