Tue
Dec 22 2009
04:36 pm
Study: Extended service contracts offer little or no value
By: R. Neal

But consumers continue to purchase them anyway, spending $8.3 billion on warranties for computers, computer electronics and major appliances alone in 2007.

A new study from the Carnegie Mellon Tapper School of Business explains why.

The report also explains why extended warranties aren't such a good deal, especially for lower income consumers who can least afford them yet purchase them more frequently.

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Factchecker's picture

As someone who's considering

Submitted by Factchecker on Tue, 2009/12/22 - 8:26pm.

As someone who's considering taking the plunge to a new big teevee, I've thought about this. I've heard that Consumer Reports also does not recommend extended warranties or ESCs. But I wonder if there's one factor that these studies have not considered. Only in the last year or two have electronics removed all the lead in their solder processes. Pretty much everything is lead-free anymore. The problem is that without lead, the tin in metals and in solder can grow "whiskers" over time. In the extremely small geometries of modern microelectronics, it doesn't take much of such a whisker to short a device and ruin it. It could be months or even weeks, or it could take longer for whiskers to grow long enough to do damage.

Although there are tin whisker mitigation strategies, they are not fool proof nor have they been proven over time. Who knows what the failure rates will be for no-lead products over the next few years?

I'm still undecided, but am leaning toward getting an extended warranty. Seems to be about 10% of the purchase price I'm considering.

bizgrrl's picture

I prefer to not pay for

Submitted by bizgrrl on Wed, 2009/12/23 - 7:00am.

I prefer to not pay for extended warranties. However, if a computer I purchase does not come with a 3 year warranty (doesn't happen very often) I will extend the warranty.

If the cost is not too much then no big deal to try the extended warranty to get peace of mind. Then maybe we'll find out more about those whiskers.

lovable liberal's picture

Tin whisker mitigation

Submitted by lovable liberal on Wed, 2009/12/23 - 2:04pm.

Tin whisker mitigation strategies is a phrase I never imagined reading! It's a big world with all kinds of interesting details...

Liberty and justice for all.

My home

R. Neal's picture

"Tin whisker

Submitted by R. Neal on Wed, 2009/12/23 - 2:36pm.

"Tin whisker mitigation"

Band name alert...

But seriously, I was completely unaware of this. Something else to worry about, I guess.

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