Last updated on April 21, 2014 at 1:20 EDT

Smart Consumers Plan for the Unexpected

November 1, 2012

TALLAHASSEE, Fla., Nov. 1, 2012 /PRNewswire/ — A nationwide survey by Hart Research Associates revealed that 48 percent of Americans say they do not have the savings they need to achieve financial stability, and an October report by Consumer Reports states financial woes are deepening for middle- and upper-income households. “While some maintain consumers should put aside cash for repairs and replacement of essential electronic products or appliances, it is not possible or practical in today’s economy,” says Timothy J. Meenan, Executive Director of the Service Contract Industry Council (www.go-scic.com). “An extended warranty can help consumers manage unanticipated, unbudgeted expenses.”

Extended warranties are a fixed component of retailing in America, particularly in uncertain economic times: they meet a large market demand; provide an enhanced quality product; and at 10-20 percent of a product’s cost, an extended warranty more than pays for itself when the simplest product repairs typically cost significantly more than the price of an extended warranty.

Annual sales of extended warranties hover around 250 million annually for consumer electronics; 11 million warranties alone are sold annually for PCs and laptops. An extended warranty complements a product’s limited manufacturer’s warranty where it falls short and then extends the repair and replacement coverage after the relatively brief term of the manufacturer’s warranty expires.

REPAIR DATA: Consumer products, top failures and average repair costs.

    Laptop: $650:                                          AverageExtended Warranty:
    Component                                             Average Repair Cost
    ---------                                             -------------------
    Mother Board                                                               $450.00
    LCD Screen                                                                 $350.00
    Hard Drive                                                                 $200.00
    Optical Drive                                                              $180.00
    Source: N.E.W. Customer Service Companies, Inc. (NEW)

    LCD TV (37" or larger): $1,500.00                      AverageExtended Warranty:
    Component                                             Average Repair Cost
    ---------                                             -------------------
    Panel                                                                    $1,200.00
    Control Box                                                                $560.00
    Inverter & Main Board                                                      $340.00
    Power Supply                                                               $265.00
    Source: N.E.W. Customer Service Companies, Inc. (NEW)

    Refrigerator (side by side): $1,200.00  Average Extended Warranty:
                                            $160 -$200
    Component                              Average Repair Cost
    ---------                              -------------------
    Compressor                                                  $500.00
    Condenser                                                   $450.00
    Evaporator                                                  $400.00
    Defrost Heater                                              $225.00
    Source: Assurant Solutions

    Tablet: $425.00                                  Average Extended Warranty:
                                                     $45 -$90
    Component                                       Average Repair Cost
    ---------                                       -------------------
    Main Board                                                           $330.00
    Digitizer                                                            $230.00
    LCD                                                                  $230.00
    Source: N.E.W. Customer Service Companies, Inc.

Purchasing an extended warranty provides protection, peace of mind and a full complement of benefits: 24-hour toll-free technical support; access to local, pre-qualified repair and service professionals, power outage and surge damage protection, and a 30-day free look back period so if you believe you purchased the warranty impulsively, you can return it.

To ensure the highest quality customer service, protect consumers from unethical providers, and safeguard the integrity of the industry, the majority of service contract providers proactively seek and secure regulatory oversight from state insurance regulators and state legislators nationwide.

For all of these reasons, an extended warranty is a practical and intelligent way to provide certainty that an unexpected repair or replacement will not impose a sudden financial hardship, at a time when consumers are already challenged by current economic conditions.

About the SCIC
The Service Contract Industry Council (www.go-scic.com) is a national trade association established in 1989 that has been instrumental in working with state legislatures and regulators across the country to develop and pass legislation to protect consumers and enhance the integrity of the industry.

SOURCE Service Contract Industry Council

Source: PR Newswire