Four Steps to Achieving Warranty Success

by Kevin on May 28, 2008

bustedRecently my fellow personal finance blogger, All Financial Matters, shared an unfortunate fact with his readers. Your warranty is only as good as the manufacturer holding the warranty.

If you have a roofing company install a new roof on your house, it may come up with a 25 or 50 year warranty through the company. That’s all well and good, but if the company is a ten man small company it faces up hill odds to survive 50 years to serve your warranty.

Now if the roofing material company — the manufacturer of the shingles — happens to offer a warranty, and is a large reputable company, you are much better off. I’d rather buy a GE roof than a Jimbo’s Roofing and Tax Services roof.

Another way to protect yourself is to extend your current warranty. There are two ways to do this:

  • purchase an extended warranty
  • use a credit card that automatically extends the original manufacturer’s warranty

I do not recommend buying an extended warranty. There may be specific cases where the aftermarket extended warranty is worth something, but I think it is rare. I used to work at Office Depot and we were pushed to sell the extra warranties. Why? Because the company made a ton of money off of them. (Remember, insurance companies rarely lose money. This is why you never buy an investment from an insurance agent.)

However, if you use a credit card like I do… namely, responsibly and never carrying a balance. If you can manage this then your credit card company may automatically extend your warranty for you. Different credit card companies offer different benefits deep within their fine print. We use American Express’ Blue Cash. One of the benefits touted by the company is the automatic extension of your product warranty by one year. I think it relates primarily to electronics; again I would need to double check the fine print.

There may be specific steps that need to happen for your card company to offer this benefit. It depends on the fine print, but you might have had to pay for the entire purchase on your card (so no gift cards involved) or have carried the balance for one month. The former is no big deal, the latter pretty much wipes out the benefit of the warranty extension.

A warranty is also useless if you cannot prove you have a warranty in effect with the manufacturer. Those warranty cards that come in some products can be handy. Remember to keep invoices, receipts, and any other documentation you might need to prove that you bought the product new and it is still within the time frame laid out in the warranty.

Four Steps to Achieving Warranty Success:

  • Buy from a reputable company/manufacturer with a long history, solid product, and the ability to cover your warranty during the warranty period whether it is 3 years or 50 years.
  • Avoid aftermarket extended warranties. The cost is usually too high to provide meaningful benefit to most users. The simple fact that companies push their workers to sell these should be enough to show you they are highly profitable for the companies and not you.
  • Read the fine print on your credit card. Your warranty may be automatically extended for you for no additional cost.
  • Keep good records. A warranty is useless unless you have records showing when you bought your item as well as the warranty card (and any other required information like invoice, etc.).

(Photo by zappowbang)

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