The value of longer warranty for the goods you buy… and of a question “so what?”

warranty

Super-duper-all-inclusive-lifetime-premium warranty. Sounds familiar? I’ll give you another example: most daring warranty agreement that I have seen (and, by the way, the items bought were commercial refrigerators) was 17 days. Yes. S-e-v-e-n-t-e-e-n DAYS!

I’ll try to save your time and put logic simply. The company did the research: break-down frequency during the lifetime of these units. and they found out, that if there is anything wrong with the item itself and the fault lies with the manufacturer, 95% of all breakdowns happen in the first 17 days. Afterwards – if the maintenance is done properly – the unit works as it is supposed to work. While the “Super-duper-all-inclusive-lifetime-premium warranty” costs additional €500 per unit. And that is 10% of the price. That means, 95% of 500 Eur are simply spent to cover the risk of events that have a 5% chance of happening. Company chose to save €475 for each unit. And a lot of millions annually.

I have seen some some tender evaluations, where additional scoring is given only for longer warranty. Do not get me wrong – sometimes it might be a smart thing to do. For instance, you do not have data about the break-down frequencies, reliability. Or you have exactly the same items for exactly the same price and one of them offers a much better warranty terms.

But, whatever you do, do not take for granted, that longer warranty is worth more money just “because”. Questions are the tools available for everyone. Ask “so what?”. Thanks for reading, if you are still here. Hope this serves as an idea for your future buys!

 

 

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The value of longer warranty for the goods you buy… and of a question “so what?”

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