Don't Be in a Fix: Understand Warranties and Service Contracts
As retailers celebrate Father's Day in June, the media will be filled with images of Dads doing things around the house. Warranties and service contracts are another way to get things repaired when Dad isn't around, or if you are a father that simply prefers to let someone else do the work.
The Federal Trade Commission offers these tips for getting the most out of your warranty and deciding if purchasing a service contract is worth the money.
Warranties
Written warranties are not required by law, however, federal law does require that any warranties that are offered must be available for you to read before you buy whether in person, by catalog or on the Internet.
State laws cover implied warranties that products will do what they are designed to do (a men's electric shaver will shave a beard) or that they will perform under certain circumstances (the shaver will trim a face but not a lawn). Neither implied nor written warranties cover merchandise sold “as is.”
- Read the warranty before you buy so you understand exactly what is covered. If shopping online, look for the link to the warranty and print it out. File the warranty with a copy of your receipt in case you need to prove date of purchase or that you are the original owner.
- A warranty is only as good as the company standing behind it. If you haven't heard of the company before, check with the Better Business Bureau or your state's consumer protection office.
- Use the product according to directions or you may void the warranty. Also be sure to perform any required maintenance and inspections.
- If you need repairs, the warranty provider may be entitled to try to fix the product before replacing it. If it is not fixed properly, the company must correct the problem as long as you reported it during the warranty period.
Service Contracts
Unlike a warranty that is included in the purchase price, service contracts such as those providing repair or maintenance cost extra. While service contracts can offer peace of mind they may not be worth the price and there are several factors to consider before buying one.
- Know what the warranty covers and then compare if the coverage the service contract adds is worth the additional expense. Understand the terms of the service contract and what exactly it covers.
- If the cost to repair the product or buy another is low, it may be cheaper to replace the product or fix it instead of purchasing the service contract.
- Some service contracts have deductible amounts or charge you each time the item is serviced. There may also be cancellation or transfer fees if you sell the item before the contract ends.
- Know where you can get service. It won't be worth much to you if you move out of the area and it can be serviced only where you live now.
- There is little you can do if you buy a service contract and the company goes out of business. Research the company offering the contract if you aren't sure of its reputation.
- Check to see if you can purchase a service contract when the warranty period on the product ends. That's when you can decide how much you use the product, if you plan to keep it and if the service contract makes good sense financially.
