Extended warranties are a way of offering additional protection for expensive purchases, and come into effect after the expiration of the manufacturer's warranty. With gadgets and technology products becoming a backbone of our daily life, extended warranties are becoming a norm for the consumers.
To cover oneself against unexpected situations where the manufacturer's warranty has expired, and protect against costly repairs, here are the top five reasons listed by south Asia director, The Warranty Group (TWG), Vivek Burman, as to why one should go for an extended warranty or a service contract:
- Helps to be prepared for recurring repair costs
Even purchases from the best manufacturers need repair and maintenance from time to time. The repair costs for these products is so high these days, that the consumer could easily end up taking a small term loan to repair or replace the damaged part. For instance, damaged speakers in the latest smartphone models can cost up to one-fifth of the unit price to repair. Having an extended warranty contract in place for the product can be very useful in such situations.
- Service contracts today offer more than just extended warranty
Service contracts today offer not just extended warranty on your products, but also additional benefits like on-site repairs at your premises, or a substitute product while your product is getting repaired. They also offer customer support and/or solutions for non-hardware issues. That is precisely the reason they are referred to, in many cases, as after-sales products, rather than just extended warranty or service contracts.
- Most extended warranties are transferable
Extended warranty service providers are now making these services transferable so the product is covered even if is transferred to another owner.
- Extended warranty increases the cost of product at the time of resale
The resale value of the product increases if it has an extended warranty plan attached. The transfer of the warranty can be done for a small cost/fee. Since the warranty will provide the new user peace of mind for a pre-owned product, it will increase the sale cost of the vehicle/product.
- You have purchased an expensive product which has a higher repair and maintenance cost
While making an expensive purchase, one of the factors that worries buyers is the high repair costs they might incur in the future in case of a mechanical or electrical breakdown of the product. In such a scenario, extended warranties help the users buy the product without any worry for future expenses.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)