Should You Buy An Extended Warranty That Covers Accidental Damage?
Brad Cupp·07-07-2020·5 min read
A question many What The Tech users ask is “Should I get an extended warranty with accidental damage coverage when I buy new tech?” Is “accidental damage coverage” a way for companies to scam you out of hard earned cash? Or, something you shouldn’t be caught dead without? This is a nuanced and situational question that I’ve broken down into 5 basic considerations based on my experience performing in-warranty and out-of-warranty repairs for dozens of manufacturers including Apple, Dell, HP, Samsung, Lenovo and more.
To make this more concrete, imagine we are comparing the base model iPad ($329) to a high-end iPad Pro ($1,649). We want to know how much each would cost to repair if they were accidentally damaged and decide if buying an extended warranty would be more cost effective.
Here is how the math works out for the two iPads.
This shows that the extended warranty for a base model iPad costs roughly 1/3 of the device itself! Whereas, the iPad Pro extended warranty is only 1/10 the device cost. This pricing becomes even more important when considering the next question.
At first glance, the cost to repair an iPad Pro in comparison to the cost of the device (~39%) seems pretty favorable in comparison to the iPad (~76%). However, I still have to fork over $649 for iPad Pro accidental damage repairs. With the extended warranty, the same repair would only cost $178 (Extended Warranty : $129 + Accidental Damage Service Fee : $49). This is a potential savings of $471! The same calculations for repairs on the iPad shows a potential savings of $131.
How important are these price differences to your situation? Question 3 can help us determine that.
Whether you give technology the white glove treatment or are accident prone, assessing your personal risk factors is invaluable to determine whether you would benefit from an extended warranty.
These are questions that you should seriously consider, because only you know the answers.
Some brands have amazing, cutting edge products, but lack the production quantity and manufacturing experience to ensure minimal defects. In these situations an extended warranty can give you the peace of mind knowing that you won’t have a large repair bill in the future for a currently unknown defect.
New tech is supposed to make life less stressful. Let your choice about a warranty help facilitate this.
To make this more concrete, imagine we are comparing the base model iPad ($329) to a high-end iPad Pro ($1,649). We want to know how much each would cost to repair if they were accidentally damaged and decide if buying an extended warranty would be more cost effective.
1 - How Much Does The Extended Warranty Cost In Comparison To The Device?
One of the first variables to consider with warranties is the cost of the device itself vs the cost of the extended warranty. My general rule of thumb is to never to buy an extended warranty where the warranty + accidental damage service fees costs more than 20% of the cost of the device.Here is how the math works out for the two iPads.
This shows that the extended warranty for a base model iPad costs roughly 1/3 of the device itself! Whereas, the iPad Pro extended warranty is only 1/10 the device cost. This pricing becomes even more important when considering the next question.
2 - How Much Does It Cost To Service The Device Out-of-Warranty?
If you don’t have an extended warranty, how much does servicing the device for accidental damage cost? Apple provides a guide that explains their pricing structure, and most other manufacturers have this info available as well.At first glance, the cost to repair an iPad Pro in comparison to the cost of the device (~39%) seems pretty favorable in comparison to the iPad (~76%). However, I still have to fork over $649 for iPad Pro accidental damage repairs. With the extended warranty, the same repair would only cost $178 (Extended Warranty : $129 + Accidental Damage Service Fee : $49). This is a potential savings of $471! The same calculations for repairs on the iPad shows a potential savings of $131.
How important are these price differences to your situation? Question 3 can help us determine that.
3 - Do I Take Good Care of My Technology?
Another big variable in deciding if you should purchase an extended warranty is estimating how often, if ever, you will need to have your device repaired. Yes, some accidental damage circumstances are completely outside of your control, but this is a good time to honestly assess risk factors in your lifestyle and your track record with technology. How many times in the past have you needed to replace or repair a device due to damage? (If you find it hard to objectively consider this question, I am sure friends or family will let you know!) Do you have young kids or nosy pets in the home, or a job that requires a lot of outdoor exposure? Are you open to investing in a protective case?Whether you give technology the white glove treatment or are accident prone, assessing your personal risk factors is invaluable to determine whether you would benefit from an extended warranty.
4 - Is Peace of Mind Important To Me?
Sometimes, the peace of mind from investing in an extended warranty is worth the cost even if you never need to repair the device. Will you sleep better at night knowing that an extended warranty will save you $131-471 if you accidentally damage the iPad? Or, will paying less cash up front by skipping the extended warranty cause less stress? Will paying a higher out-of-warranty fee be a one-time inconvenience that you can move on from quickly?These are questions that you should seriously consider, because only you know the answers.
5 - Is The Brand or Product Line Reliable?
Knowing if a brand or product line is reliable can take some research. Websites like Consumer Reports provide excellent, in-depth reviews but require a monthly fee for many of their features. I typically use a combination of YouTube review videos for specific products along with reading individual buyer reviews on Amazon, Best Buy, or sites where the product is sold. Pay close attention to 3 and 4 star reviews as these tend to most fairly represent the pros & cons of an item. You can also talk to friends and family to get their experiences with the brand.Some brands have amazing, cutting edge products, but lack the production quantity and manufacturing experience to ensure minimal defects. In these situations an extended warranty can give you the peace of mind knowing that you won’t have a large repair bill in the future for a currently unknown defect.
Conclusion
In the past few years, I have purchased both the iPad Pro and the iPad and used the five questions above to decide whether or not to purchase the extended warranties. I ended up getting the extended warranty on the iPad Pro but not the iPad. For the most part, I have a good track record for avoiding accidental damage. However, getting the extended warranty on my iPad Pro gave me the peace of mind that I could potentially save $471 if it was damaged. On the other hand, paying a $249 out-of-warranty repair cost for the basic iPad did not seem like a big deal — especially given my lower risk of damaging it in the first place.New tech is supposed to make life less stressful. Let your choice about a warranty help facilitate this.