At the time of repair, out-of-pocket expenses may be charged for unexpected services provided outside of the warranty terms or uncovered parts.Īn extended warranty is coverage for electrical or mechanical breakdown. For instance, an auto warranty from a car dealership may be subcontracted and vehicle repairs may be at a lower rate which could compromise the quality of service. Warranties which are sold through retailers such as Best Buy may include significant commission for the retailer as a result of reverse competition. These types of warranties are provided for various products, but automobiles and electronics are common examples. They may also exclude parts that normally wear out such as tires and lubrication on a vehicle. Exclusions may include commercial use, "acts of God", owner abuse, and malicious destruction. For example, these may not cover anything other than mechanical failure from normal usage. Thus, what is often promoted as a five-year extended guarantee, for example, is actually only a four-year guarantee.Įxtended warranties have terms and conditions which may not match the original terms and conditions. Occasionally, some extended warranties that are purchased for multiple years state in writing that during the first year, the consumer must still deal with the manufacturer in the occurrence of malfunction. Extended warranties cost extra and for a percentage of the item's retail price. The extended warranty may be offered by the warranty administrator, the retailer or the manufacturer. A type of product warranty offered in addition to a standard product warrantyĪn extended warranty, sometimes called a service agreement, a service contract, or a maintenance agreement, is a prolonged warranty offered to consumers in addition to the standard warranty on new items.
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