Friday, February 17, 2017

Extended Warranty - Solution or Sales Pitch?

Would you like the extended warranty with this purchase?  If  you have bought anything electronic in the last 10 years, you have been asked the question.  Your answer is probably driven by several factors including price, quality, replacement cost, potential repair cost, etc.  In my personal experience, I have purchased the extended warranty plans, some for big items and some for small items.  For example, when I was a young man just out of college, I bought the extended warranty on my first ever new automobile purchase. It was a Ford Escort, and I believed it would help insure that my overall expense would be "controlled" as the major expenses would be covered in the event of a major repair.  Later in life, I bought my first flat screen TV when they first came on the market.  While I bought a quality brand, I bought the extended warranty for a couple of reasons. (1) Flat screen TV technology was new, and without product experience references to pull from, I elected to go with the extended warranty to get me past the fear of the unknown, and also because the repairs would be completed in my home and save me time as my wife and I had started a family.
So, my Ford Escort worked fine for the entire time I had it and I never had the need to file a claim and use the extended warranty to cover repair costs.  My flat screen TV went out 2 days prior to the end of the extended warranty period, and the coverage kicked in, repairs were made, and I still use the TV years later.
Some would say I wasted my money on the automobile extended warranty. Maybe so, but I did have the piece of mind and confidence to purchase the new vehicle. It was a budget stretch for me, but allowed me to have something better than a used vehicle and control my budget with more of  a known repair costs for the next 60 months.
Many product lines carry the extended warranty plans.  Toyota offers the plan for purchase with their industrial equipment and the plans are called "Toyota Extra Care".  While the automobile companies have their "bumper to bumper" plans, industrial equipment offers similar plans called Carriage to Counterweight.  On electric powered equipment, some of the plans cost pennies per day with the most expensive plans costing less than $1 per day.  Even on internal combustion equipment and the largest forklifts the plan costs less than $2 per day.
Toyota also offers a Powertrain protection plan that covers the internal components of the engine and transmission. These plans cost less than the Carriage to Counterweight plans.
The plans can be added to a new equipment purchase and/or lease at the time of order. The plan can also be added after order and delivery as long as it is signed and put in place within 30 days or 60 hours from the delivery date. Just like with any extended warranty plan, there is a contract to sign that includes all language about inclusions, exclusions, and responsibilities.
Our field staff of sales and customer service representatives can answer additional questions and provide all the material for review. Here is a link to the Toyota site with details.

This is just another one of the solutions offered here at ACT. Find out more by contacting us today at 800-849-5438 or at

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