Honest opinions about how to buy Appliances and Lighting.

Wednesday, February 28, 2007

Buying Service Contracts

Service contracts are extensions to the manufacturers warranty, which can be either parts, labor or both. The most common warranty in the appliance industry is a 5 year, which is actually 4 years plus the manufacturers original 1 year. Think of it as year 2-5 coverage.

There are many people who believe good products should work. I respect that. That thinking would bankrupt the insurance industry, but in theory, good products should operate for longer than 5 years. Statistically, our service department completed 15,000 service calls in warranty, so there are a good fraction of new products for whatever reason need repair.

The pricing structure should be very simple. usually a 5 year warranty will cost $99-199 on basic products and more on expensive products like SubZeros and professional products depending on the store

The question of whether to actually purchase a service contract becomes strangely complicated. You buy a service contract from anywhere. The first question is: Who fixes it? The number 2,3 and 4 volume appliance dealers have limited appliance service technicians in their organizations. On the Internet, it is even worse. How can an Internet store from New Jersey service an appliance in Boston or Boise. Think about it. Yale is one store and completes over 15,000 calls per year. Can you imagine a chain of stores. My point is do not invest the money on service when a company cannot by its very nature can complete the transaction

I do not want to turn this into a service rant. My purpose is to educate, so don't plunk down your hard earned money on a contract that may be worth only as much as the paper and ink

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