DTI grants extension

  Ping Pong 07:51 27 Jun 2003

The last bit of advice in this article was to hold back on buying an extended warranty as you still have the manufacturers cover however the manufacturers Warranty does not cover accidental damage. I have worked retail for fourteen years and find that while ext GTees are a pain to have to sell the customer benefit easily outweights the cost.
I worked in the photo trade(still cameras and video) and have to say repairs did not come in cheap. You probably couldn't get a decent video camera repair for under £100. Most of the companies I worked have a substantial mark up on repair charges so when a £100 repair is passed on to a customer the end bill is likely to be £140-£180. It looks tough but dealers have to make make it viable to handle repairs in the first place.
We will skip the dealer side of this for a while and concentrate on the consumer side.
Camcorders. We all love them because they can immortalise moments that are dear to us forever. However how many camcorder owners actually bother to read the instruction manuals? The answer is close to zero. I know this and I shall tell you why. You can stroll along any beach during the summer and lo you will spot a few camcorders recording the families day out. If the manual had been read these people using their camcorders would probably not take their camera to a beach. Sand and cameras of any description do not mix.(Nikonos and like aside).
A single grain of sand can be fatal to the recording heads on a video camera. If the heads go then you can expect a repair of at least £200-£260.
This is where the extended warranty comes into play. Most extended warranties will actually cover you for sand damage.So in short an extended guarantee costing circa £130 on a video camera gives you free rein to be an utter clutz.
In the above example the manufacturer will quite rightly tell you to take a hike.
To summarise, extended guarantees are a pain but anyone who has claimed on them should be able to say (hands on heart) that it was good value for money. Finally people should not be advised not to take an extended g/tee but allowed to make an informed decision.
I am sure that Domestic & General could supply more facts and figures regarding what I have just said.

  -pops- 09:07 27 Jun 2003

There are numerous problems with extended warranties, not least the difficulties of getting them to acknowledge there is a problem and, even if/when they do, getting them to pay out.

ALL of my electronic equipment and cameras are insured under my home contents insurance policy. This is infinitely cheaper than an extended warranty and longer lasting as well.

Before anyone comes along and says that you can't insure these things under home contents, yes you can. You can insure anything you want and if your insurance company won't oblige, change to one that will.


  Ping Pong 17:51 27 Jun 2003

Yes you can use home insurance for most if not all the appliances you buy however there is at any given a proportion of the population who dont have any form of home & contents insurance.
I highlighted D&G in my earlier post as they were the insurance company used by many of my employers and to be fair to them they paid up without issue. This was in part due to the fact that they dealt direct with the repairer so they were able to control costs better.
One of my previous companies initiated their own scheme which went further and loaned the customer equipment while theirs was being repaired. They even absorbed processing costs if say for instance a new camera was covered and failed during a holiday.All the customer had to do was present their films and receipts for single use cameras purchased and they were fully re-imbursed.
An aside is that people do not want to dent their insurance records with minor claims. People insure mainly for the big things that go wrong eg: subsidence or flooding and are willing to use extended g/tees to cover minor purchases.
Many people are aware that their household insurance will cover them but still opt for the extended option.

This is not an issue that needs a resolution but is more for discussion. Having sold and used extended g/tees myself I am interested in what other people think. There will be no right or wrong answer to this debate but other peoples opinions are interesting.
Perhaps you should cover it in detail in the magazine. Test PCW,Dell,Time and any of the others to see who delivers what on their extended g/tee and how effectively???????

  obbit 17:56 27 Jun 2003

i agree with you -pops-. extended warranties are another way of making money. E/W raised £800 million last year in profits.

  wee eddie 18:27 27 Jun 2003

Everything I sell in my shop is another way of making money.

Why it should surprise any one, that those that write Extended Warrentry Policies do so with the intention of making money, is quite beyond comprehension.

Of course they sell them to make money. If I could make that much out of the jam I sell to go with my scones I should be a very happy man.

At a slightly lower price they would be very good value for money.

Their mark-up is the bone of contention.

  -pops- 19:23 27 Jun 2003

The "proportion of the population who dont have any form of home & contents insurance." seem to have their priorities wrongly directed. Are they likely to be bothered very much about extended warranties?


  Ping Pong 19:37 27 Jun 2003

The extended warranty is a valuable source of income for retailers especially the small ones who don't have the muscle to compete financially with the big boys. Even the big boys are feeling the pinch badly since the internet became a popular way to shop. I saved 50% on my inks by going to 7dayshop.com. My staff discount couldn't come close. I agree that pricing can be a bit lunatic and this is an area which will need to be looked at. Here are some of the reasons for extended guarantees and their high prices.
If you hark back to my earlier postings you will have read that a camcorder with damaged heads can cost £200-£260 to repair. A high proportion of this cost is the labour charge. Would you rather pay this out of your own pocket or would you rather your ext g/tee coughed up.
Another issue to consider. Is your ext g/tee underwritten in case the original vendor goes bust? If the answer is yes then there is a good chance that a sizable portion of your premium is going to the underwriters.

If extended guarantees were abolished altogether what effect would this have on the price of consumer goods?
Also if extended guarantees were abolished I can assure you that retailers would get around it. I mean PCW like to call their option a service agreement. Same thing different name.

  Ping Pong 19:40 27 Jun 2003

As a footnote house insurance does not cover electrical or mechanical failure only accidental failure. Does this mean that you tell them your washing machine fell down the stairs when you were loading it?????????
This is me being cynical but as good as household insurance is there are always areas where even they fail.

  -pops- 20:19 27 Jun 2003

House insurance will cover anything you want it to. All you have to do is arrange the cover you require with your insurer. If they refuse, take your business elsewhere, another company will be more than willing to take your business.

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