SUBJECT: PET PEEVES!!!
"Extended Warranties"
In the opinion of the tremendously unbiased writer, the concept of the "Extended Warranty" has got to be one of the biggest scams on the market today. Two recent examples from the life of the Papa Z family should suffice.
Example One: The New DVD/VCR. For Christmas, the Zampino clan purchased, as a family gift, a new combination DVD/VCR machine to replace two very well worn out components. We made this purchase from a supposedly reputable well-known electronics retailer, and purchased a machine from a supposedly reputable manufacturer. We didn't purchase the "Cadillac" model -- but we didn't purchase the "Yugo" either, by any stretch of the imagination. We declined the "extended warranty" which would have added quite significantly to the purchase price. Well it's October now. The little motor which opens and closes the DVD drawer is shot. It has apparently shorted out. We called the retailer, and were, of course, informed that since we had not purchased the "extended warranty" we were out of luck. We called the manufacturer and were informed that they would gladly cover the cost of the part -- but not the cost of the labor -- AND we would have to pay to have the item shipped out. Estimated cost? Essentially half -- 50% of the cost of the device in the first place. My conclusion? Built-in obselescence. The "extended warranty" was an ultra-expensive insurance product banking on the hopes that the device would last two years. If it didn't -- hey, the device was essentially "throw-away" in the first place. If it didn't last (which obviously, it didn't) then it was my problem. Either way, I'm stuck with either a much more expensive purchase -- or an overpriced repair bill.
Example Two: In February, the Zampino family was forced, out of dire and unexpected necessity, to purchase a car -- a vehicle used, but new to us. It was a 2003 Buick with only 63,000 on it. The purchase was made at a local dealer -- a dealer which owns 5 dealerships in Southeast Wisconsin and Northern Illinose. I received a very fair deal on the trade-in and had no problem with sales department. It even came with a limited warranty! Of course, an "extended warranty" was available (which would have added well over $1,000+ to the cost of the car) which came with its own set of limitations and exclusions. By early April, it had become obvious that the air conditioning needed to be recharged. I was annoyed -- but not particularly angry -- such things happen. I went back to the dealer, paid the hundred bucks for the recharge -- and for the injection of a dye into the system to make sure that there was no leak. I was guaranteed that if I needed a recharge again, it would be taken care of -- at no cost to myself. Within two months, another recharge became necessary. I returned to the dealer -- who informed me that there WAS no dye left in the system; that the condensor had died -- and that the repair would cost upwards of $1,000. I pointed out that under Wisconsin statute, the dealer was supposed to exercise "reasonable care" when inspecting a used vehicle -- and that it was obvious that "reasonable care" was not exercised. Indeed, it was clear that the service department of the dealership had merely signed off on an untested system. I was then informed that had I purchased the "extended warranty" the repair would have been covered. The service department offered to cover half the cost of the repair -- but also informed me that "of course, the repair could cost considerably more" than the estimate! (Like I couldn't see THAT scam coming!) Like the DVD manufacturer, the service department of this dealership didn't care if "reasonable care" was exercised or not. They figured I'd either pay the hefty additional premium -- or find myself screwed a few months down the road. (I might add that the car has developed additional issues in which minimal "reasonable care" by the dealership was not exercised as well -- issues which should not have occurred after only a few months.)
End of rant! (But I am looking for a different vehicle -- from a different dealership!)
Papa Z
Example One: The New DVD/VCR. For Christmas, the Zampino clan purchased, as a family gift, a new combination DVD/VCR machine to replace two very well worn out components. We made this purchase from a supposedly reputable well-known electronics retailer, and purchased a machine from a supposedly reputable manufacturer. We didn't purchase the "Cadillac" model -- but we didn't purchase the "Yugo" either, by any stretch of the imagination. We declined the "extended warranty" which would have added quite significantly to the purchase price. Well it's October now. The little motor which opens and closes the DVD drawer is shot. It has apparently shorted out. We called the retailer, and were, of course, informed that since we had not purchased the "extended warranty" we were out of luck. We called the manufacturer and were informed that they would gladly cover the cost of the part -- but not the cost of the labor -- AND we would have to pay to have the item shipped out. Estimated cost? Essentially half -- 50% of the cost of the device in the first place. My conclusion? Built-in obselescence. The "extended warranty" was an ultra-expensive insurance product banking on the hopes that the device would last two years. If it didn't -- hey, the device was essentially "throw-away" in the first place. If it didn't last (which obviously, it didn't) then it was my problem. Either way, I'm stuck with either a much more expensive purchase -- or an overpriced repair bill.
Example Two: In February, the Zampino family was forced, out of dire and unexpected necessity, to purchase a car -- a vehicle used, but new to us. It was a 2003 Buick with only 63,000 on it. The purchase was made at a local dealer -- a dealer which owns 5 dealerships in Southeast Wisconsin and Northern Illinose. I received a very fair deal on the trade-in and had no problem with sales department. It even came with a limited warranty! Of course, an "extended warranty" was available (which would have added well over $1,000+ to the cost of the car) which came with its own set of limitations and exclusions. By early April, it had become obvious that the air conditioning needed to be recharged. I was annoyed -- but not particularly angry -- such things happen. I went back to the dealer, paid the hundred bucks for the recharge -- and for the injection of a dye into the system to make sure that there was no leak. I was guaranteed that if I needed a recharge again, it would be taken care of -- at no cost to myself. Within two months, another recharge became necessary. I returned to the dealer -- who informed me that there WAS no dye left in the system; that the condensor had died -- and that the repair would cost upwards of $1,000. I pointed out that under Wisconsin statute, the dealer was supposed to exercise "reasonable care" when inspecting a used vehicle -- and that it was obvious that "reasonable care" was not exercised. Indeed, it was clear that the service department of the dealership had merely signed off on an untested system. I was then informed that had I purchased the "extended warranty" the repair would have been covered. The service department offered to cover half the cost of the repair -- but also informed me that "of course, the repair could cost considerably more" than the estimate! (Like I couldn't see THAT scam coming!) Like the DVD manufacturer, the service department of this dealership didn't care if "reasonable care" was exercised or not. They figured I'd either pay the hefty additional premium -- or find myself screwed a few months down the road. (I might add that the car has developed additional issues in which minimal "reasonable care" by the dealership was not exercised as well -- issues which should not have occurred after only a few months.)
End of rant! (But I am looking for a different vehicle -- from a different dealership!)
Papa Z
posted by David Zampino | 5:19 PM
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