Extended service contracts can be a great way to protect your investment when purchasing new appliances, electronics, jewelry, home goods, tools or other equipment. However, there are a number of myths about extended service contracts that can make it difficult to decide if one is right for you.
Here are some of the most common extended service contract myths debunked:
Myth: Extended service contracts are a waste of money.
Fact: In many cases, an extended service contract can save you money in the long run, especially if you have a high-value item that will experience heavy or consistent usage. Extended service contracts are a good investment. They often include recommended maintenance schedules, which extend the useful life of products, and allow you to have the item repaired rather than be forced to replace it should it be necessary. Additionally, extended service contracts can often provide coverage for losses beyond the item itself. Expenses such as food loss or laundromat services can be reimbursed under some appliance coverages.
Myth: Extended service contracts do not cover critical parts that break the most.
Fact: While extended service contracts sometimes only cover specific parts or components of the item that is being insured, typically they cover the parts most prone to failure. For example, an extended service contract for a refrigerator usually covers the compressor, which is the main moving part and the heart of the refrigerator. It is important to read the Terms and Conditions of the extended service contract to understand what is and is not covered. In some cases, functional components, such as knobs, racks and shelves, are covered, giving you extra protection should one of these small parts break from normal wear and tear.
Myth: Extended service contracts are available only from the manufacturer.
Fact: Manufacturers typically offer a factory warranty to replace or repair defects in materials or workmanship. These warranties have limited coverage and come with restrictions and exclusions for a very limited period of time. Extended service contracts provide additional coverage, giving customers extra protection against unexpected repair costs.
Myth: You have to buy an extended service contract at the time you buy a product.
Fact: Depending on the repair program, you can usually buy an extended service contract up to a year after product purchase. However, it is important to note that the price of an extended service contract may be higher if you buy it after the item has been purchased.
How do you know if an extended service contract is right for you?
Here are a few things to consider:
- The value of the item. The more expensive the item, the more likely it is that an extended service contract will be worth it in the long run.
- The history of the item. If the item has a history of breaking down, an extended service contract may be a good way to protect yourself from costly repairs.
- The necessity of the item. How critical is using this item daily? From cell phones to refrigerators, microwaves, and washers and dryers, doing without these essential products will be an inconvenience to you if you cannot afford to get them repaired quickly.
- The terms. Make sure you understand what is and is not covered.
- Prices. There are a number of different extended service contract providers, so be sure to compare prices, deductibles and coverage before you buy one.
If you are considering buying an extended service contract, be sure to do your research and ask questions. Centricity’s retail partners work hard to train their employees on all the different options available, and they can help you decide which option is best for you. By understanding the facts about extended service contracts, you can make an informed decision about whether or not one is right for you.
Centricity is a leading provider of service contracts for a wide variety of products. We offer competitive prices and flexible terms that we have developed in partnership with our retail partners. To learn more about how Centricity can help you protect your investments, visit our website today.