The extended warranty , sometimes called service agreement , service contract , or maintenance agreement , is an extension of the warranty time offered to consumers in addition to standard guarantees for new items. Extended warranty may be offered by the warranty administrator, reseller or manufacturer. Extended warranty surcharge and for a percentage of retail price of goods. Sometimes, some extended warranties purchased for several years state in writing that during the first year, consumers still have to deal with manufacturers in the event of damage. So, what is often promoted as a five year extension guarantee, for example, is actually only a four-year guarantee.
Extended warranties have terms and conditions that may not comply with the original terms and conditions. For example, this may not include anything other than a mechanical failure of normal use. Exceptions may include commercial use, "acts of God", owner abuse, and nasty destruction. They can also exclude parts that normally wear out like tires and lubrication on the vehicle.
This type of guarantee is provided for various products, but cars and electronics are common examples. Guarantees sold through retailers such as Best Buy may include significant commissions for retailers as a result of the competition being reversed. For example, automated warranties from car dealers can be subcontracted and vehicle repairs may be lower which may jeopardize the quality of service. At the time of repair, out-of-pocket expenses may be charged for unexpected services provided outside of the terms of warranty or spare parts not found.
Video Extended warranty
Ikhtisar
Extended warranty is coverage of electrical or mechanical damage. It may or may not include peripheral goods, wear and tear, damage by computer viruses, gassing, normal maintenance, accidental damage, or any consequential loss. Most state insurance regulators have approved the inclusion of normal wear and tear, accidental damage from handling, rental cars and towing, power surges and other coverage in addition to standard coverage for defects in materials and workmanship. Indemnity is to cover repair costs and may include reimbursement if it is considered uneconomical to repair. It is important for consumers to read and understand the terms and conditions offered at the point of sale. In retail consumer electronics, extended warranties cost 20% to 30% of the price, and provide sales associates up to 15% commission on some retailers.
Consumer support groups, such as the non-profit Consumer Union, advise not to purchase additional collateral unless they can be purchased at factory costs. David Butler of Consumers Union says, "Extended warranties are obviously in the best interest of the company because if the product breaks down, they want you to be happy with it and buy another product when the time comes, but not often the best interests of the consumer unless it can be purchased at no markup or very a little. "Union Consumers says only two products are eligible for warranty extension considerations: projection TV and digital cameras. Both are expensive to repair and need to be repaired frequently.
Maps Extended warranty
Automatic warranty extension
An automatic warranty extension is a service contract between the vehicle owner and the automated warranty provider, the last of which may be the original manufacturer or a third party. All new cars come with a warranty that covers fixes for a certain period of time and a number of miles, like 3 years and 36,000 miles. Automatic warranty generally does not cover vandalism or theft, dings or dents, road salt damage, environmental damage or natural disasters. car laundry damage, or normal routine maintenance.
At the time of sale, car dealers can sell buyers an extended warranty car offered by the manufacturer. When the time period expires, the consumer has the option of purchasing an extension of the auto warranty from a third party, which is not an extension of the terms and guarantees given in the original car manufacturer's warranty, but a new contract provided by the three providers. According to the Car Protection Association (APA), which publishes the Lemon-Aid Car Buyers Guide, extended warranties are a good idea if they include items that are likely to be damaged within the warranty period. Extended extended warranties often offer other facilities that are not covered by general factory warranty, such as travel and road damage insurance.
By region
Canada Province QuÃÆ' Â © bec
Based on QuÃÆ' Â © bec civil code and Loi sur la protection du consommateur every trader is responsible for enforcing the legal guarantee of a product. This legal guarantee protects consumers from: accidentally deliberate malfunctions, defaults that can not be easily identified at the time of purchase, a guarantee that purchased goods can be used for the stated use and ultimately guarantee a reasonable life expectancy based on the price paid. This guarantee persists even when the initial buyer sells his goods to others. A merchant can not ask consumers to pay fees or postage to qualify for their legal guarantees. The office for consumer protection does not take a certain stand against extended warranties. However, they recommend that consumers should be vigilant and question themselves whether the warranty really adds something to the applicable legal warranty. Eventually they show that the number of consumers who go to court against merchants in order for them to apply a legal guarantee is almost equal to the number of consumers taking legal action against merchants for failing to respect the extension of the warranties they have sold.
United States
In the United States, the extension of collateral is governed by many state insurance commissioners as "service contracts." Service contracts may include cars, consumer goods (such as appliances, electronics, lawn equipment, etc...) and homes. The regulatory structure requires the licensing or registration of the warranty provider, the solvency financial regulation, and the disclosure of the consumer service contract. The "provider" service warranty applies to licenses or registrations, and can then sell their products, usually at the point of sale of the product, for example in car dealerships or in retail consumer electronics stores, but some companies such as After, Inc, SquareTrade and Direct Guarantee also sell directly to the consumer. In the United States, this type of extended warranty called vehicle service contract is usually governed by the state as an insurance. In July 2010, California issued a stop letter and to several companies selling insurance illegally in the state; the company believes that it is not insurance because the contract requires certain additives to be used.
The Council of Service Contract Industry was founded by Fredrick D. Schaufeld in 1988 and is an industry member trade association.
United Kingdom
The extended warranty market has been subject to several investigations. In 2002, the Fair Trade Office ruled that the self-organization of the industry had failed and forwarded the case to the Competition Commission. It concludes that the market is not acting for the benefit of consumers. The Citizens Advice Bureau has expressed concerns about extensions of the incorrectly sold guarantees. The Fair Trade Office investigates the extended warranty market again and publishes market reviews in 2012. They say that the UK market is worth about Ã, Â £ 1 billion per year. From this £ 1bn they estimate 75% of people do not compare prices before purchasing an extension of the warranty.
See also
- Warranty
- Extended service plan
References
External links
- Consumer information about extension of warranty for cars
- Extension of Warranty, page on BBC UK website
- Contractual Liability Insurance? for Service Contracts
Source of the article : Wikipedia
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