The Auto Warranty Industry Scam
I’m sure you’ve heard of such companies as US Fidelis, Stop Repair Bills.com, National Dealers Warranty, Or Mogi right? Well about 9 months ago i got hired on at one of these companies above, and i feel it necessary to prevent anyone that reads this from making the same mistake that many of the people I sold to did.
And for those of you that haven’t heard of any of those companies – let me give you a basic run-over of what these companies claim to provide to consumers and how the average consumer would go about getting mixed up in one of these companies. (If you have called one of these companies before, or just want an overall sum up of what these companies are doing wrong, Skip down to “The Scam” section)
And then there’s this about why people buy extended warranties:
Many people would not think of making a major purchase without doing research to find the best model and the lowest price. But at the checkout counter, all of that preparation often breaks down.
There, shoppers are asked to buy a product that few have investigated: the extended warranty. New research suggests that the appeal of such warranties depends not only the inability of most people to assess risk, but also on the emotional state of the buyer. The happier you are, it turns out, the more risk-averse you become, so the more likely you are to buy the protection.
AppleCare for Apple products is one exception. On the other hand, there’s Best Buy’s which are pretty much as worthless as the car warranties.
It’s all in the fine print.
I’m sorry that your TV arrived in bad shape and I’m glad that things got sorted to your liking, BUT don’t kid yourself or try and make yourself feel better about your purchase: All “big box” retailers would have stood by you and replaced that TV with no hassle at all. Don’t be stupid.
I think the accidental warranty’s for laptops are still worth it. I had a co-worker that had to send his in for repair a couple times with the accidental warranty.
I’m also going to send my laptop in soon, the left arrow key needs to be replaced, and I’ll also force them to replace the screen because there are some clear spots that can get annoying.
#12 Firefox’ zoom sucks, not to mention that any browser in the world today has zoom capabilities, even IE.
Even so, that doesn’t fix the bad font/background color matching.
I swear by extended warranties on high ticket items, TV’s, automobiles, laptops, etc. I’ve had nothing but great results with them, and the times I never used them I was also thankful for them. Why? Instead of harping on the profits companies make from these warranties, which are a form of insurance, you need to have some common sense and realize how the insurance pool works. Just because your home, disability, work, auto, etc. insurances make a ton of money I don’t see any articles to go out and cancel those. Just because you never filed a homeowners claim or a disability claim or a life claim, does that make those insurances obsolete?
So far in my life I have had 3 laptops fail on me, Best Buy replaced them with no questions asked. I had a 61″ DLP fail in its 4th year, replaced by circuit city no questions asked. I’ve had literally thousands of dollars of extended warranty work done on vehicles which made me very happy to have purchased the extended warranties.
And yes, I have had purchases which used zero extended warranty repairs. I do not consider them a waste in the least, just another insurance I purchased which I did not need to utilize, as most of my other insurances work.
As for the empty promises the sales people make, that’s the consumers own fault. They should be asking “hey, where is that in the contract?”, and if it’s not in the contract they need to make the decision to walk away, or realize that it’s not valid. As for being in the pamphlet, I would venture to guess that would be some form of a contract, ie: offer, consideration and acceptance. The pamphlet is best buy branded, I’d take that right along with the contract into small claims court. It’s amazing what those $40 spent in small claims court can accomplish.
Even manufacturer’s warranties aren’t always reliable. Years ago I bought a Technics CD player. One of their early models. About a year after I did, it started skipping tracks. Still under warranty, I took it to the closest licensed repair shop, for that brand. I picked it up a week later, and it still skipped a lot. Took it back (which was a 20 mile drive!) and asked to see them actually work on it. All they were prepared to do was tweek the laser adjustment, and hand it back to me. No parts replacements. Later I read that these players had a problem with lasers going fuzzy. But replacing them, wasn’t part of their plan. So I had to junk a $300 player.
About a year later, at an Electronics Show, I saw a Technics booth. And I asked if they fixed the laser problems with their CD players? The reps wouldn’t talk to me. I’ve never bought another Technics optical player since. But they did make nice LP turntables.
My choice of CD players after that was a Philips CD880. Which has never giving me a problem in the two decades I’ve owned it.
Way back in the 1980s, I bought my second VCR. I remember it clearly. It was a Panasonic model. And I got an extended warranty at the store that sold it (Video Warehouse). They offered to sell it $100 cheaper, if I paid for the service coverage (which added about $200 more). About 18 months later, the thing developed a chronic tracking noise problem. So I took it back to them. And they kept it for like four months. Telling me tales like how parts were on order, and company reps were called in to look at it. I finally got it back and it reeked of cigarette smoke. And the noise problem persisted. So I opened it up and took a look at it myself. And within a half hour, I found that it was a simple limit switch problem, involving one of the moving tape guide posts. It was stopping short of its final posiition. I corrected this by bending the “switch” spring apart, just enough to extend the loading shutdown motor. Clearly, this could have been an easy repair by anyone. If they really cared to honor the warranty. But instead they blew smoke up my nose. An apparently into the player, while using it to play adult movies for four months.
After that experience, NO MORE extended service plans for me. Not even by major chain stores. Most appliances will never have a serious problem, in the time that these cover. They all know this. And paying several years’ coverage, will cost you what a replacement unit would. And you gamble that they will actually repair the old unit, satisfactorily.
Insurance, properly used, should only be for things that you can’t afford to cover yourself. Buying insurance for cell phones and TVs is simply a way to give away money. In the long run you will lose, and that is with the assumption that the company will actually pay your claim (not a valid assumption). My experience is that, *if* they are still in business, they always find a way to not pay. A policy I had for appliances refused to pay on my dishwasher because, “doors are not covered”, Nuff said.
On a related note, Apple Care is GREAT…for the people who DON’T get it. Since most people DO get Apple Care, Apple takes a different view on product reliability that other manufacturers. It might make better financial sense for them to buy a higher quality component if it will reduce the number of Apple Care claims. They already took everyone’s (Apple Care) money up front so a bean counter might determine that they MAKE money by using, say, a better hard drive or fan. This financial incentive is not there for companies with a low percentage of service contract sales. So tell everyone else to use Apple Care, but don’t buy it yourself.