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I think you have cause and effect reversed. Extended warranties are offered, when the product is expensive, not the other way around. Extending warranties can b
by adamlett 7y ago
I think you have cause and effect reversed. Extended warranties are offered, when the product is expensive, not the other way around. Extending warranties can be thought of as a kind of insurance. If a product is inexpensive to replace, it does not make economic sense to insure it.[1]
[1] Unless you have some reason to believe the insurance is priced too low.
- deleted 7y ago[deleted]
- lotsofpulp 7y agoWarranty is another word for insurance. I'm not sure what you mean by cause and effect. If you are claiming that a product being expensive is what causes a manufacturer to offer longer warranties, I guess that's true, but I would say it is because the product is of higher quality.
- tomatocracy 7y agoWarranties and insurance are quite different. Insurance is usually provided by a regulated entity and implicitly backed by the government in the even that the insurer fails. Their regulators also provide redress for consumers against unfair treatment without the need to resort to the courts and the terms usually have to be fair too. Warranties are typically provided by the vendor who may well be financially unsound and willing to treat a customer less fairly, contain significant legal loopholes and require redress through the courts or perhaps a binding arbitration tribunal.