WHAT ARE THE ADVANTAGES OF EXTENDED WARRANTIES OR SERVICE CONTRACTS?
HOW DO SERVICE CONTRACTS DIFFER?
WHAT KIND OF PLANS ARE THERE?
Date-of-Purchase Plans: Begin on the date you acquire the product from the retailer, even though they don't take effect until the manufacturer's original warranty expires. Then, they take over for a specified period of time.
Extension Plans: Takes effect after the original warranty expires but usually may be purchased either along with the product or any time before the manufacturer's warranty expires.
Major Component Plans: Limited to the major or most expensive components of a particular product; such as the picture tube of a TV set. These, too, take over only on the expiration of the original manufacturer's warranty.
Replacement: For less-expensive items (usually under $100), providing for the replacement of the product with a new or refurbished product (check for the actual wording) if it should fail during a specified time.
Comprehensive: Usually patterned after the manufacturer's warranty to provide a continuation of the identical coverage and limitations of the original manufacturer's warranty for a specified period of time.
Deductibles: Generally, these require the customer to pay a specified amount toward each repair or service.
WHAT SHOULD YOU LOOK FOR IN A SERVICE CONTRACT?
Specifically, what is covered and what is not? All parts? All labor? Home service and pickup and delivery?
Are you paying to duplicate any of the manufacturer's warranty?
Are there any exclusions? Are additional payments required for any services? How much?
What companies will be able to do the repairs? Will you have a choice? Where are the repair facilities located?
Is the policy renewable? At what cost?
Is it valid if you move? Is it transferable if you sell the product?
Is the contract insured? In full, with no deductibles? Is the name of the insurance company shown on the contract?
If possible, compare more than one service contract and ask the opinion of an independent servicer. Never just take the salesperson's assurance; read the complete contract, including -- especially -- the fine print. If you can't understand what you read, don't buy it.
Finally, make sure that all blank lines and spaces are filled in before you buy. And be sure to get a receipt for the service contract.
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NESDA, the National Electronics Service Dealers Association, 2008 | 3608 Pershing Ave., Fort Worth, TX 76107 | www.nesda.com
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