[PLUG] Laptops and warranties

[Dwight Hubbard]

Exactly, warranties have to be evaluated for what you are getting out of
them.  Many times people buy warranties and insurance based on feelings
(usually fear) instead of taking the time to evaluate the risk/rewards of
the warranty.

Generally I think warranties make more sense on expensive laptops than on
cheaper ones.  However, it is really important to consider what isn't
covered by the warranty.  If you have a manufacturer warranty of 1 year and
your visa card doubles it to 2 years, what will the covered part of your
computer be worth?  I.E. replacement cost minus the cost of the battery and
any other non-warranty covered components.

Example:
$1000 Laptop with one year manufacturer warranty.  With a 3 year extended
warranty for $300.

If the laptop totally failed after that 2 years and you had the 3 year
extended warranty.  You would receive a refurbished laptop which has 1 year
of warranty coverage remaining and have a useless laptop battery that cost
$100+ that needs to be replaced.  While the laptop is being repaired, you
don't have a replacement.  You can also potentially run into other issues
with the laptop that aren't covered in the fine print.

Purchase the same laptop with a Visa card that doubles the manufacturer
warranty.  The laptop has warranty coverage for 2 years.   At no additional
cost.

Invest the $300 you would have spent on the extended warranty after 2 years
you would have anywhere from $310-$380 depending on how it's invested.   For
which you buy a new laptop with similar specs to the one that failed which
after 2 years is about half the original cost and has a good battery and
once again you have 2 years of warranty coverage.  Out of pocket cost
$120-$200 (not much more than the cost of a replacement battery).

Which is the better deal?  The second option has a bit more potential out of
pocket cost worst case, but if the laptop doesn't fail you still have your
money.  If it fails after 3 years, you still have your money, if it fails
after 5 years you still have the money.  If you want to run a new
application that requires a faster laptop, you can sell the old one on ebay
and use the money set aside for repairs as part of the purchase price on
another laptop.  And if you use the money you invested to purchase another
laptop, it has the manufacturer's warranty again.  Obviously for a more
expensive laptop the warranty might be a better deal, but then that isn't
necessarily so.