No matter where you purchase any computer product, from an entire system to a USB flash drive, inevitably you will be asked if you want to purchase an extended warranty on the item. While you might have an involuntary reflex of answering “no”, experience has proven to me this is not always the best answer.
Where I’m Coming From
As the primary technical resource for a small business I have my hand in repairing / upgrading / replacing / etc. virtually all hardware and software for desktops, laptops and servers, in addition I do some repair work for friends and family when needed. While virtually all of the machines at work are Dell’s, we still have several hand-built machines in service, additionally the machines I deal with “on the side” range from all major manufacturers, so I have dealt with a reasonable amount issues.
Before going saying anything else, I’m going to knock on wood.
In a general sense, my experience has shown desktop machines are usually pretty solid with an occasional hard drive going bad, typically after 3-5 years (judging from the date on the drive label) and on very rare cases a failed power supply. Unfortunately, a couple of times the failed power supply seems to have taken out the motherboard in its final blaze of glory. Servers have shown themselves be even more reliable. The only problems I have seen with a server are one of the embedded NIC’s on a motherboard and a power supply going bad. In servers, I prefer to use SCSI drives as they tend to last an incredibly long time.
Laptops are a different story. A laptop’s longevity tends to be directly proportional to how well it is treated by the owner. I have seen laptops which are 10 years old functioning with all the original parts and others where they breakdown after 6 months. Usually, the hard drive is the most common thing to go (surprise surprise) with motherboards, particularly the power supply “jack”, being next in line.
Considerations
Neither of the above observations should really come as a surprise. When you think about it, desktops and servers are stationary while laptops are constantly being packed, unpacked and jostled. If heat is the number one enemy of computers, constantly being shifted around has to be second. Let’s be real here though, no computer part will last forever, everything will eventually stop working no matter how well it is taken care of.
With all that out of the way, back to the question at hand… should you purchase an extended warranty? As you know, a warranty is essentially insurance. When you purchase a warranty there is no guarantee it will ever pay for itself. Therefore, true for any computer related question, the answer is “it depends”. There are several factors you have to take into account in order to make the most appropriate decision, here are just a few:
- Does the warranty include full parts and labor?
- How familiar and comfortable are you at repairing the device?
- Are there any proprietary components?
- How quickly does the item depreciate?
This is a small sampling of the factors to consider. For example, you may not be at all familiar with desktop computer repair, but the item you are buying might be practically obsolete at the end of the standard warranty. In this case, if disaster were to strike, it might make sense to instead apply the money you would spend on a warranty on another machine or just pay for the repairs out of pocket.
The “what if” scenarios are endless, so it is impossible to apply a one size fits all rule as to when an extended warranty is appropriate. To propose a reasonably objective and simple solution, I’ve come with a table to help determine if an extended warranty is a good fit. In order to add another completely unneeded computer related acronym, I’ll call my table FEWT for “Faulkner Extended Warranty Table”.
Faulkner Extended Warranty Table
Version 1.0 / April 9, 2008
| Question | Scoring Criteria |
| What type of device is the item? |
Laptop Computer = 5 Server = 3 Desktop Computer = 2 Peripheral = 0 |
| How expensive was this item? |
$1,001 or more = 5 $500 - $1,000 = 4 $251 - $500 = 3 $100 - $250 = 2 Under $100 = 0 |
| How long is the standard warranty for both parts and labor? For example, if the warranty is 1 year parts and 90 days labor, the answer would be 90 days. |
Less than 6 months = 4 6 months to a year = 3 1 to 2 years = 2 More than 2 years = 1 |
| How familiar are you at repairing this item? | Not at all, and I don’t care to learn = 5 Not at all, but I would like to learn = 4 This item really can’t be repaired = 3 Somewhat, but I can figure it out = 2 I’m an expert = 1 |
| If the item were to break, what would be your immediate reaction? | Start looking for where I can get it serviced = 4 Start looking for the problem and try to fix it myself = 3 Run out and get a new one = 2 I didn’t need it anyway = 0 |
| Are any of the parts proprietary? |
I have a laptop = 5 I believe some of my parts are, but I’m not sure = 3 The item can’t really be fixed, it has to be replaced = 2 None of them are, I can easily get the parts I need = 1 |
| How proficient (and patient) are you at researching computer related problems on the Internet? | Not at all = 5 Somewhat to pretty good = 3 I’m an expert = 1 |
| How “mission critical” is this item? |
I can’t live without this item = 3 I may not need it now, but I will need it tomorrow = 2 It’s ok if I don’t have it for a little while = 1 I really don’t need it that much = 0 |
| How quickly does the item depreciate? |
It may be old, but it will still be just fine for my use = 3 In a year, I won’t be able to give it away = 2 It will cost the same tomorrow as it does today = 1 |
| How expensive is the extended warranty versus the item cost? Calculate: (Total Extended Warranty Cost / Total Item Cost) |
.01 - .05 = 5 .06 - .10 = 3 .11 - .20 = 2 .21 - .25 = 1 .26 - .6 = -1 .61 or higher = -2 |
| How long does the extended warranty cover both parts and labor? |
More than 2 years = 4 1 to 2 years = 2 6 months to a year = 1 Less than 6 months = 0 |
Maximum score = 50
Minimum score = 4
As you can probably tell, the higher the number the more you should consider getting a warranty. Here are some ranges to help:
- 46 - 50 = An extended warranty is definitely for you.
- 37 - 45 = An extended warranty is probably a good fit for you.
- 31 - 36 = An extended warranty is deserves some careful thought and you should seriously consider it.
- 25 - 30 = It could go either way, if you have the extra money available it wouldn’t be a bad idea to get an extended warranty.
- 19 - 24 = You probably don’t need an extended warranty.
- 4 - 18 = Don’t waste your money.
What’s The Verdict?
Ultimately, the decision on whether or not to purchase an extended warranty is totally up to you. Your decision should really boil down to the value you feel you will get from the warranty. Like any insurance, the warranty could never be used or end up being cashed in for a new item, but the piece of mind it brings alone may be worth the cost. The FEWT score is just a way to help put an objective number to the value an extended warranty would give you and is in no way definitive (although, if you have suggestions, please comment).
My personal choice is to purchase a warranty on any laptop as it will be in production use. Desktops and servers, again, tend to last a bit longer. Typically server parts are more expensive, but often times it would take several breakdowns in order for an extended warranty to pay for itself. On peripherals, just save your money.
Decisions, decisions….
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About the Author
Jason Faulkner is the man who brings you our daily tips. He is based in Atlanta, Georgia.
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Jason Dyok said:
4/11/2008 10:33 am
Great advice and bang on the money. Is great that someone would break it down in such an analytical way. In today’s day and age, with planned obsolescence and worsening quality control, warranties are becoming more and more of a deciding factor, and extended warranties should always be at least considered. For me, I normally look at 3 points: 1) What percentage of the product price does the x warranty cost? If too high is it worth it? 2) Can I live without the product for an extended period of time? 3) What kind of abuse is the product likely to receive?
Anyways, great tips and well worth it. This is a warranty I would pay for.
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William Harnagel said:
4/15/2008 12:25 pm
I just finished reading this article - AND - I just finished talking to Dell Support about a problem that will result in replacing the mother board on my lap top. I have never purchased an extended warranty before and I don’t remember why I purchased one for this computer - but I did. Good choice! The tech will be here tomorrow. I am very much in agreement that, for a lap top, an extended warranty is worthy of consideration.
[Reply]
Josh said:
4/17/2008 8:01 pm
This is a nice, well informed article. I have often had trouble on choosing whether to purchase the extended warranty or leave it. I am even skeptical when others are the ones purchasing the laptop or desktop. I think it is safe to disregard the extended warranty for desktops, but not for laptops. Laptops tend to break more easily and encounter more problems. A two year warranty should be OK.
Josh
http://www.abigarcade.com
[Reply]