TALLAHASSEE, Fla., Nov. 19, 2011 /PRNewswire/ --The continuous redesign of electronics and appliances forenhancedportability,functionalityand energy efficiencyhasmademany oftoday's consumer goodsincreasingly intricate, fragile and costly to repair or replace.Atthe same time,products are being manufactured with low-cost components and manufacturers are limiting warranty periods along with customer support options.
According to theService Contract Industry Council(SCIC), as the technology in products rapidly evolves it can prove difficult for manufacturers to keep replacement parts in stock for products utilizing yesterday's technology. Consequently, consumers whose malfunctioning product is outside of the manufacturer's warranty period and who want torepair itto keep it for the long-term may be out of luck. With an extended warranty,however, consumers can findprotection; if a malfunctioning product cannotbe repaired, itgenerally is replacedwith a comparable newer one.
Consumer Reports (August 2011) stated, "...consumer goods have become more complex and contain more electronics than they did a decade ago... when things do go wrong, they tend to go horribly wrong." The 27,404 subscribers surveyed for the Consumer Reports' story reported that 53,218 of their home products including appliances, electronics and more needed to be repaired or replaced.
"An extended warranty is particularly relevant in uncertain economic times," said Tim Meenan, Executive Director of the SCIC. "When things do go 'horribly wrong,' the consumer is protected by law."
Since 1988, the SCIC has developed legislation and worked with legislatures across the nation to regulate the extended warranty industry on a state-by-state basis with laws mandating licensing and stringent financial responsibility requirements for providers. Among other provisions, SCIC legislation puts in place regulations -- including the requirement to buy insurance -- to protect consumers who purchase service contracts from retailers who go out of business.
Extended warranty providers are a fixed component of retailing in America because they meet a large market demand, provide an enhanced quality product, and proactively establish and enhance consumer protections - all the while greatly improving the state of the industry through self-regulation.
Why to Buy an Extended Warranty:
A survey of consumers by Brand Keys, Inc. predicts a 10 percent increase in electronic purchases over last year. Of those consumers planning to give an electronic device, 25% are purchasing e-book readers, 19% tablets, 15% smart phones, 9% computers and 6% cameras.
- Consumer electronics are complex, increasingly mobile and expensive to repair
- Cracked screens for both eReaders and tablets can cost from $160-350 to repair/replace
- Battery upgrade/replacement $80-150
- Lines in screen $160-350
- Unit frozen/not able to connect to computer $180-500
**(higher range applies to tablets)
- Defects in workmanship and materials
- Mechanical and electrical breakdowns
- Environmental factors
When Not to buy an Extended Warranty:
- If at all pressured by a sales person to buy on the spot
- If the contract is not available for review at the time of purchase
- If the cost of the warranty is a high percentage of the overallproduct price; the warranty should cost between 10-20% of the overall retail price
- If you receive an automated phone sales pitch or mass mailer
Contact your local BBB or state insurance commission with any concerns. Always read terms carefully and research provider prior to purchase.
"Why" and "When Not" to buytips© SCIC
About the SCIC
The Service Contract Industry Council (www.go-scic.com) is a national trade association established in 1989 to educate consumers about service contracts (extended warranties) and develop and pass legislation at the state legislature level across the country to protect consumers and enhance the integrity of the industry. SCIC members consist of the largest and most reputable service contract providers in the industry and sell approximately 80 percent of the service contracts sold in the U.S. for home, auto and consumer goods. Over 250 million extended warranties are sold annually in the U.S.
SOURCE Service Contract Industry Council
