As with any consumer product, cell phones come standard with limited warranties offered by their manufacturers. These standard warranties are limited to the months after purchase, typically lasting from 30 to 90 days. The manufacturer of a cell phone includes provisions for repairing or replacing phones if there are production defects. Unless a manufacturer issues a recall of its phones, the onus of proving a defect independent of human error falls on the consumer. These restrictions on standard warranties attract many consumers to extended warranties.
Consumers shop through their cell phone providers as well as warranty providers like SquareTrade© (http://www.squaretrade.com/pages/cellphone-landing3) for extended policies. The typical extended warranty through a cell phone provider covers product defects and accidental damage well beyond the original policy. SquareTrade© and independent warranty providers claim that their extended warranties are cheaper and more comprehensive than similar policies by telecommunications companies. In the case of SquareTrade© extended warranties, customers receive coverage for two years from purchase dates with replacement coverage up to $399. Independent policies often feature provisions for the manufacturer warranty to take precedence while still active, thereby saving policyholders from wasted money on extended warranties.
Advantages Of Cell Phone Warranties
The primary advantage of a cell phone warranty is the high cost of PDAs, touch phones, and other devices. Budget-conscious consumers purchasing prepaid and low-end phones may find the costs of warranties beyond their means. A consumer purchasing a Blackberry™ or an Apple iPhone®, however, is paying hundreds of dollars for his phone. The cost of an extended warranty is nothing compared to the costs of purchasing a new PDA without the subsidy provided to new consumers. Instead of hoping for the best, iPhone® and Blackberry™ users can invest in extended warranties to ease their minds.
Another advantage of investing in cell phones warranties is to remedy the restrictions of a manufacturer’s warranty. The time limitations and restrictions for replacing a phone in a standard warranty make it worthless to most consumers. Even when a manufacturer’s warranty is activated, a phone owner may not qualify for phone repair and replacement upon further inspection. An extended warranty prescribes myriad solutions to phone issues including third-party repair services, expedited service, and higher reimbursement limits.
Consumers should also think about the fragility of phones when shopping for cell phone warranties. Basic cell phones may seem sturdy, but water, dirt, and other contaminants can easily pass through their plastic exteriors. PDAs and touch phones are even more susceptible to damage as users keep their touch screens exposed during use. Cell phone manufacturers focus on weight and portability when creating their products rather than durability. As well, cell phone companies have followed the examples of other manufacturers in creating some elements of planned obsolescence in their products. These factors lead some consumers to think about extended warranties at the point of purchase.
Disadvantages Of Cell Phone Warranties
ConsumerAffairs.com© (http://www.consumeraffairs.com/) offers a list of reasons to avoid product warranties ranging from dishwashers to cell phones. The primary reason to avoid product warranties according to ConsumerAffairs.com© is the cost ratio between the warranty and the product. Cell phone providers offer free or discounted phones to new contract holders in order to attract first-time users. The disparity between a discounted cell phone and the premium on an extended warranty is discouraging to most consumers. Instead of investing in a high-priced warranty for a cheap phone, consumers can often recycle their phones and purchase new phones at lower prices.
ConsumerAffairs.com© is also concerned with the reliability of repair clauses in extended phone warranties. With a few exceptions, cell phone providers outsource phone repairs to third-party contractors specializing in electronics repairs. These contractors may not be completely familiar with warranty restrictions and may not handle repairs outside traditional business hours. Extended warranties may offer more generous clauses for repairs than standard warranties, but providers can still deny repairs after inspecting phones. In cases where providers repair phones in-house, the repair technician may not be inclined to fix the phone if the problem requires extensive time and resources.
Another reason why ConsumerAffairs.com© warns against extended warranties is the myriad nullifying factors included in these documents. A repair technician may not bother working on a phone’s covered damage if non-covered damage exists. In-house service technicians look carefully at phones to determine if acts of negligence led to phone damage, which cancels out legitimate damage to other parts of these products. The web of legal language within an extended warranty may make consumers feel like they have coverage that does not exist.
The multiple tiers of companies involved in issuing extended warranties rival the complexities of these policies. Consumers wrongly assume that their cell phone providers create these policies and issue them at the point of purchase. Cell phone providers work with third-party vendors to generate and carry out extended warranties. These warranty companies work with independent contractors and electronics repair companies to handle claims filed by policyholders. ConsumerAffairs.com© notes that third-party warranty providers are notorious for shutting their doors with little notice. Consumers are often left with worthless warranties because the issuing companies go bankrupt or face litigation from wronged consumers.
The most compelling reason for consumers to be wary of cell phone warranties is overlap between various coverages. Consumers paying for extended warranties are still covered by manufacturer’s warranties for up to 90 days. This area of overlap means that a consumer is paying for a period of extended coverage that is unnecessary. Both standard and extended warranties cover product recalls, which means that manufacturer defects are not remedied faster by extended warranties. Many consumers also purchase insurance on their cell phones to cover lost and damaged units beyond warranty reimbursement limits. In the end, consumers need to look carefully at all warranties and insurance to avoid wasting money on the same coverage.
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