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October 22, 2007, 10:59 am
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Extended warranties are very controversial. If the base warranty is one
year, you have to consider that after the year is finished, if something in
the set fails, you will have to pay for the servicing.
Most of the failures are a capacitor, or a semiconductor. In these sets the
are not usually serviced at the component level. They change complete
circuit boards. Repairs can be fairly expensive. If the panel itself, or
one of the major circuit boards fail, then the repair can cost about the
same as the replacement cost of the set.
The extended warranty is like an insurance policy, where the vendor of the
warranty will take on the responsibility to service your set in the case if
it fails within the agreed contract time frame. He is also counting on the
fact that statistically a certain number of sets will come back for service
during the time that he is responsible for the warranty service cost. The
price of the warranty is calculated relation to the value of the set, and is
determined by a number of factors to determine the probabilities if the set
will come back, and the number of times it may fail.
Another important thing to find out, is if the extended warranty is
pro-rated. This means that after the first year, you will pay a portion of
the cost according to time that you have had the set. For example, during
the first year of the extended warranty, you may not pay anything if the set
fails. During the second year of the extended warranty, you may have to pay
30% of the repair cost. During the second year, you may have to pay 60% of
It is important that you understand all the terms of the warranty, and what
their liability is with your set. You may have a type of failure that may
not be covered.
Some years ago, I remember seeing some CRT sets that had an extended
warranty option. They covered the CRT itself for only 2 years. The rest of
the set was pro-rated for 3 years. They called it an extended warranty.
Basically, during the last year the CRT was not covered. You can bet that
after the second year, there were some CRT's that were failing! When the
customers complained, they were shown a copy of the fine print on the back
of the warranty plan.
For the flat panel TV sets, the prices have been dropping. I have no idea of
how far they will go down. You have to use your own judgment with extended
warranties. When buying a TV set, first find out if the model or similar
models under the same manufacture have been proven to be reliable. It there
is at least an 90% reliability factor that is in your favour, it may be
worth gambling on having no extended warranty. You can put that cost
difference for a good DVD player, or for the next TV set.
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