SMB Technology

Q&A: Extended warranties

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When purchasing technology I’m always unsure whether or not I should take on an extended warranty. When are they worthwhile? Will they help save on business costs?

Extended warranties come in all shapes and sizes, but they’re all based on the same concept: pay more upfront for a longer period of protection against failures or problems down the track.

The good points

Extended warranties are worth considering in the following situations:

The very cheap extension

Some PC makers will sell warranty extensions on their own machines very inexpensively when the PC is sold. If you’re spending $1,500 and the company offers to increase the warranty from one year to three years for a small amount of money, then taking the extension is worth considering.

Portable computers

Unlike desktop machines, most notebook PCs are used in a number of different of locations, increasing the chance of damage. They’re also generally more expensive so an extended warranty can make sense here, especially if you travel a great deal with the machine.

Free replacement

A number of vendors offer extended warranties where they’ll replace the item if it fails instead of making you wait for repairs. If the item you’re buying would normally require shipping and a long wait in the event of a problem, and if you can't be without the equipment for a long period of time, then this has value.

The very risk-averse

For those people who hate the idea of their PC failing and plan to keep using their computer for many years, an extended warranty may make sense. It’s a question of whether or not you’re prepared to spend money to have peace of mind.

Tips

When purchasing an extended warranty you must:

• Read the fine print
• Find out what the warranty actually covers
• Establish whether the vendor or manufacturer is providing the extended warranty
• Avoid paying extra for overly long term warranties. Extended warranty on any product that already has a three-year warranty is often a waste.

Published on: Tuesday, July 13, 2010

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