Thoughts & Poll on Extended Warranties

[StuM]

Just had an experience with an Extended Warranty and just curious on how others feel about them.

My experience: In 2016 we purchased a Nordic Track Treadmill and opted for the extended warranty for @ $158.  In 2021 we had one repair under that warranty and then in 2022 we renewed the extended warranty for an additional cost of $347.  Thus total cost of extensions @ $505 and this provided for Labor through Aug. 2025 and Parts through April of 2028.  Well, Monday of this week it would not turn on.  We called Nordic Track and was told "We no longer support that model" and when we mentioned we had the extended warranty all got quite then we got transferred to a supervisory.  The supervisor then double checked our serial number and warranty information then put us on hold and after a few minutes we were told to call a different department that deals with extended warranties.  We spoke to them and they put us on hold for a while then came back and asked us to take a video of the machine showing us go through a reset process and email them the video which we promptly did.

After the calls we did a quick internet search and found a lot of complaints about the model being "Bricked" and a class action lawsuit back in early 2023 and lots of horror stories about waiting for ever for a replacement console that never worked.  At that point we started to get concerned.

This afternoon got an email form them and they offered to give us a credit equal to our original purchase price of the treadmill towards a new treadmill ($1,462).  Looking at the website the new version of our model is currently on sale for @ $537 above the credit they offered.

Our documentation reads that if it can't be replaced they would "Replace it at no cost to us" which to me means they should improve the offer BUT I've not read the fine print so what they offered may be 100% within the terms.

We are likely going to accept the offer and just pay up for the new machine thinking we basically got 8 years of "free use" of a treadmill.

This made me curious what you may think about extended warranties.  I know a few people they will never get one on a car while others will never be without one.  What is your view?

Also, in my situation, do you feel the offer they made is fair and I should accept it or should I take the time to read the fine print and fight for more?

 

Edited March 27, 2024 by StuM
Added dollar value of the actual offer

[klineka]

20 minutes ago, StuM said:

Also, in my situation, do you feel the offer they made is fair and I should accept it

This question is pretty much impossible to answer without knowing what the fine print says...

Based on what you have told us so far, no, I don't think the offer is fair since they aren't replacing it at no cost to you and you are within your extended warranty period(s). I wouldn't be entirely pissed off or anything at their offer, I'd just spend the time to read through the fine print and ask what their reasoning is for making you have to incur a cost to replace the item when the primary language of the warranty indicates that you shouldn't have to pay. 

I know sometimes things get pro-rated as the warranty period progresses, like 100% value replacement in years 1-3, 80% in year 4, 60% in year 5, etc so check to see if it's something like that in the fine print. 

I mean you're talking what, like 10-15 minutes of reading to potentially save yourself $500+? I would have done that before even posting here tbh.

 

As far as extended warranties go, sometimes I get them, sometimes I don't. It depends on what the product is, how likely it is to break, how much the product costs, and how much the warranty costs. If I had to throw a number at it, I'd say I get the warranty 20-30% of the time and don't get it 70-80% of the time.

[StuM]

23 minutes ago, klineka said:

I would have done that before even posting here tbh.

Good point, but I am in the office and did not have it when I got the "Offer" and decided to post it.  

[iacas]

Long story short… they offered you a credit of ~$1460 and it costs ~$1999 or something?

We just had the same thing on a 3-year-old TV. Were offered $1260 for a TV that was probably $1499 at the time (we probably got it for about $1260), and bought a newer TV (slightly better model, 5" bigger) at $1699.

So, we "used" the old TV for about $466 after taxes. That was "fine" for us.

(But that's just the very least of this.)

[StuM]

29 minutes ago, iacas said:

Long story short… they offered you a credit of ~$1460 and it costs ~$1999 or something?

Correct....Sorry that I am more of a "Short Story Long" type of person.  

 

30 minutes ago, iacas said:

So, we "used" the old TV for about $466 after taxes. That was "fine" for us.

Similar to me, I 'Used" the treadmill for @ 8 years and my out of pocket is really just the cost of the extended warranty.

[dennyjones]

We don't usually buy extended warranties.   Most things made today are made with obsolence.   I guess I purchase items hoping they will last but I make sure that I do heavy reasearch into bigger purchases before I buy.   

Several years ago we purchased a Samsung refrigerator and stove.   The stove although it takes 30 minutes to get to oven temperature, works well.   The refrigerator froze up after 2 years and we found out about the class action law suit against Samsung after doing some research.    We now have an LG which works great for us but the online reviews tend to be negative.  

Online reviews aren't always reliable.  I read Consumer Reports as one source of information but word of mouth adds weight to my buying decisions.   I've bought lemons and bought some very good items using these sources.   I guess what I'm saying, it's a roll of the dice sometimes. 

For a $400 TV I'd never purchase an extended warranty.   Usually items come with a 1 year warranty and if the electronics are going to quit, it's within this time frame.  

I believe if I was in your shoes with the treadmill and wanted another, I'd take the offer.

 

[iacas]

Forgot to add… I almost never buy them.

We bought one for Natalie's CR-V because she'd be getting it after about eight years. She used it for four more. The warranty covered it through ten. It was about $1k. We had one thing replaced under a recall, but didn't need to use the extended warranty, but it would have worked if we had needed it, and it mostly just gave us peace of mind that she could use it.

[Ty_Webb]

Extended warranties are basically a form of insurance. Someone is making money on that warranty though. As Erik says, you're buying peace of mind in return for that profit. For the warranty company if they sell 1000 warranties for 100 each and have to pay 1000 when they get a claim, so long as they get less than 100 claims they're up, but with the law of large numbers, the chances are (if they've priced it right) that they'll get somewhere between maybe 50 and 75 claims and profit 25k-50k (numbers plucked out of thin air, but that's the gist of it).

For the individual though, that's a 5-7.5% chance of being out 1000 and a 92.5-95% chance of not spending anything. The way I see it, if I can afford to lose the 1000, then I'm not going to buy the warranty. Over a lifetime I should wind up with more money as a result. If the loss is not something I can afford, then I'll take the insurance and the peace of mind. 

[StuM]

27 minutes ago, Ty_Webb said:

For the individual though, that's a 5-7.5% chance of being out 1000 and a 92.5-95% chance of not spending anything. The way I see it, if I can afford to lose the 1000, then I'm not going to buy the warranty. Over a lifetime I should wind up with more money as a result. If the loss is not something I can afford, then I'll take the insurance and the peace of mind. 

I never thought of looking at it on multiple purchases like you said.  Yes, the extended may help me on 1 or 2 items but not the other 5 or 6.

[Big C]

Generally speaking, extended warranties are a terrible deal and should almost always be avoided. They are a huge profit center for the companies that offer them, which should tell you almost everything you need to know about how much value most consumers get when purchasing them. 

39 minutes ago, Ty_Webb said:

Extended warranties are basically a form of insurance.

This is correct, and the old adage applies - only buy insurance when you can't afford the loss. This usually doesn't apply to most consumer goods. 

To your second question, no I don't believe the offer is fair. They are replacing it, but it is not being replaced at "no cost to you". Since the amount being disputed (over $500) is non-trivial, I would probably push the issue. Don't waste your time on the phone with a customer service agent or a supervisor. They have probably given you all they have the authority to do. Rather, I would look at the terms of your agreement and specifically legal disputes. The odds are you probably agreed to binding arbitration in the event of a dispute. The agreement will outline what steps need to be followed, but it will probably look something like this. 

1. Mail the Nordic Track legal department outlining your dispute and indicate you are not satisfied with the resolution offered. 

2. Open up a case with the AAA (American Arbitration Association), along with the required documentation.

3. Wait about 4-5 weeks for a case to be opened - at which point someone from Nordic Track's legal department will offer to give you the new model at no cost to you.  They certainly don't want to spend the time and energy to fight you over $500.

4. Enjoy your new Nordic Track at no cost to you.

I recently entered binding arbitration against a fairly large and well known company that screwed me over and refused to make it right. In my demand letter, I made a pretty sizeable request that included compensation for my time and frustration. Once it hit their legal department, they cut me a check - no questions asked. It was far cheaper to settle with me than to send their legal team to defend them in the arbitration.

Edited March 28, 2024 by Big C

[StuM]

7 hours ago, klineka said:

This question is pretty much impossible to answer without knowing what the fine print says...

I did read the fine print tonight. It said replace with “similar features & function”.  8 yeas ago my purchase had features that today are available on the lower end models and the current version of my model has more “bells & whistles” than what I got 8 years ago.  So I am thinking they honored the agreement and I can’t argue the offer.

since getting a credit for the full purchase price all I am really out over the past 8 years was the cost of the extended warranty, which was less than a low end  treadmill would have cost me.

now the question is which model to replace with.  I’ll stay with Nordic Track or I forfeit the $1,463 credit so I will get Nordic Track.  And they honored the warranty and were not hard to work with which is a plus.

[onthehunt526]

On my car I got the extended power train warranty. I do read the fine print most of the time. Though at now 37, my eyes aren’t what they were 10 years ago. 
 

The problem with most of these extended warranties on electronics and appliances is you don’t register the warranty with the place you buy the warranty from, which I’ve always found strange. Unless it’s GameStop then you know Alina drops her Switch in the next two years and the screen cracks they’ll replace it. No questions asked. 
 

You buy a slow cooker at Walmart for $50 and the extended warranty is say $6, you have to go through a third party to register your product for the warranty, and it’s pretty damn annoying. Target is the same way. Anything you buy the extended protection on you have to go through a third party. 
 

Why do retailers go through a “broker” for warranties? Because they don’t wanna deal with it? They make me talk to someone from another country, that I can barely understand, when I need my warranty fulfilled.

 

Sorry for the rant.

[ChetlovesMer]

8 hours ago, Ty_Webb said:

Extended warranties are basically a form of insurance. Someone is making money on that warranty though. As Erik says, you're buying peace of mind in return for that profit. For the warranty company if they sell 1000 warranties for 100 each and have to pay 1000 when they get a claim, so long as they get less than 100 claims they're up, but with the law of large numbers, the chances are (if they've priced it right) that they'll get somewhere between maybe 50 and 75 claims and profit 25k-50k (numbers plucked out of thin air, but that's the gist of it).

For the individual though, that's a 5-7.5% chance of being out 1000 and a 92.5-95% chance of not spending anything. The way I see it, if I can afford to lose the 1000, then I'm not going to buy the warranty. Over a lifetime I should wind up with more money as a result. If the loss is not something I can afford, then I'll take the insurance and the peace of mind. 

This is pretty much how I look at it. 

I understand there are times when the piece of mind has value. I think over the long haul I'm money ahead by never buying the extended warrantee. Hell, What do I know? I went to Ch!cago PubIic SchooIs. 

[bkuehn1952]

We do not buy extended warranties. We will use one of our credit cards for the purchase that extends the warranty "x 2". Our thoughts are:

a. if the item is a lemon, it will likely break right away and we can attempt to apply the original warranty or credit card extension.

b. over the long haul, we will probably save more money by not purchasing the extended warranty and fixing/junking broken items out of our own pocket.

The important thing is to keep some records of purchases so one may make a claim under the manufacturer's warranty. I recently sent back some Footjoy shoes for leaking and Footjoy did a reat job of making the claim process work very well. I had the original receipt, warrant info and box. Easy peasy.

[klineka]

10 hours ago, StuM said:

I did read the fine print tonight. It said replace with “similar features & function”.  8 yeas ago my purchase had features that today are available on the lower end models and the current version of my model has more “bells & whistles” than what I got 8 years ago.  So I am thinking they honored the agreement and I can’t argue the offer.

since getting a credit for the full purchase price all I am really out over the past 8 years was the cost of the extended warranty, which was less than a low end  treadmill would have cost me.

Makes sense. 

Like I said, I wouldn't have been upset at their original offer either, and based on the fine print it seems like they've held up their end of the deal.

 

[StuM]

4 hours ago, onthehunt526 said:

On my car I got the extended power train warranty. I do read the fine print most of the time. Though at now 37, my eyes aren’t what they were 10 years ago. 
 

The problem with most of these extended warranties on electronics and appliances is you don’t register the warranty with the place you buy the warranty from, which I’ve always found strange. Unless it’s GameStop then you know Alina drops her Switch in the next two years and the screen cracks they’ll replace it. No questions asked. 
 

You buy a slow cooker at Walmart for $50 and the extended warranty is say $6, you have to go through a third party to register your product for the warranty, and it’s pretty damn annoying. Target is the same way. Anything you buy the extended protection on you have to go through a third party. 
 

Why do retailers go through a “broker” for warranties? Because they don’t wanna deal with it? They make me talk to someone from another country, that I can barely understand, when I need my warranty fulfilled.

 

Sorry for the rant.

I would never do the extended warranty on the $50 slow cooker.  I also routinely reject the extended service plans on those toys we buy for the grand-kids.  I do consider them on higher cost items and will be more likely to get one if the product has a lot of "Electronic Tech" that is often the problem longer-term.  I also consider my intended length of ownership & usage.  If my thought is it would get replaced in 2-3 years then why bother but if I hope to use it for 10 years then more likely to get the extension.

I did buy out a lease about a year ago.  Just prior to the lease end date the tablet locked up and would not function.  I got it repaired under the initial warranty and would not have bought it out if they had not been able to fix it since IMO once electronic issues start in a car they can be hard to track down & fix.  They did fix it but when I bought out the lease I paid up for the extended warranty the would cover electronic failures because my intent is to keep that car for another 8-10 years and I just do not trust the electronics to last.  Last week the touch screen went black and was unresponsive.  It reset on the 2nd time I restarted the car but that is exactly how the last malfunction started.  I fully expect to have a claim on that on repair under the extended warranty.  I do not recall the exact cost to fix last time since I did not pay it but I think it was @ $700-$800 and I suspect that will be higher next time.