what is the difference between a warranty and a service contract. when is it better to buy a service contract?

Answer 1

A warranty will protect you and either repair and replace ONLY if something goes wrong.

A service contract will provide regularly scheduled maintenance to PREVENT something from going wrong.

You should not buy a service contract unless you will use it. Many people buy them, but then don't call to schedule the maintenance and they are a waste.

You may be better putting the money in a bank account, and letting it earn interest. Chances are that in the long run, you will save money.

But not all the time. I got an extended warranty on my car. A couple of things went wrong, and I got my money's worth.

Answer 2

A warranty is from the manufacturer. A service contract is usually from an independent source - sometimes the retailer.
I used to think service contracts were just a money making scheme for the retailer - I don't anymore.
I work part time for an electronics shop and lately we've been having a very difficult time locating parts and schematics for the many brands of flat screen, LCD and plasma televisions. It seems that if you're out of warranty, the company could care less if your expensive set gets repaired. Some of these sets are very expensive and they are only two or three years old - when we get lucky and do locate the parts needed, they are also very expensive. With a service contract, the retailer will usually simply replace the set.

Answer 3

You , the consumer, have a role to play in making markets function better. By specifying what you want as an informed purchaser you force the businesses to provide high standards of goods and services. So, understanding terms like warranty and guarantee become important. Dictionaries treat these two words as synonyms. However, in market parlance, there is a subtle difference. Guarantee refers to the performance postsale . It means that the manufacturer stands behind the product like a guarantor to a loan. It is a formal promise, like a contract, that if the performance is below par, the goods will be repaired or replaced or the money refunded. Warranty relates to the sale of goods and will say that it is of a particular standard. A warranty is a promise that refers to more tangible things, like parts of the product or machine. It promises that the motor in a juicer will function smoothly for a year or two. If it doesn't , the manufacturer will repair or replace the motor. The necessity of a guarantee emerged as a means of protection to safeguard the right of the consumer. With the strength of the guarantee, a seller is liable to make the complete replacement of the purchased item, incase it was found to be below the prescribed standard. This is given by the seller or the manufacturer of a product to the customer and remains valid for a fixed period. The guarantee is a legal instrument irrespective of whether the customer paid for the article or not. Likewise, the warranty is also an instrument to safeguard the rights of a consumer. It requires payment on the part of the customer to make it legally viable as in the case of an insurance policy. With the strength of the warranty, the seller or the manufacturer is liable to face the judicial courts if the seller or the manufacturer fails to comply with the provisions of the warranty on their part. Warranty is only relevant to the repairing of articles.

Answer 4

Warrantys come naturally with the product. Service contracts you buy. Generally speaking, service contracts are a waste of money. Unless you are purchasing an item that is very delicate and can break down easily such as a laptop or a digital camera, it is advisable not to purchase service contracts. You are throwing money down the drain.

Most products have a warranty of 1 year for parts and labor so long as the item has not been missued or abused in any fashion. That should suffice for most items you buy today.

Answer 5

just my opinion but I think a warranty would be on parts that might go bad and it's for a certain amount of time. A service contract is paying a fee and if anything goes wrong during that year they will fix it for free. When is it wise to buy a service contract? When you buy something expensive but it's made in china or maybe like when you buy a laptop (I heard lots of laptops aren't dependable), or maybe even when you buy a large appliance if you plan to use it a lot the first year.

Answer 6

A warranty is a guarantee under the original contract.

A service contract is a separate agreement.

Generally, the service contract offers more -- longer time, better coverage, etc -- relative to the warranty.

Companies usually only give you the minimum warranty required by law -- and then charge extra for the separate service agreement.

Answer 7

A service contract covers more than the warranty. I find the service contract to be annoying-- it plays on my paranoid side at the expense of my frugal side. For most of my purchases now, I decide to "self-insure". I have never needed to take advantage of a service warranty, ever.

Answer 8

warranty come free for a certain period of time. a service contract is paid for and starts when the warranty expires

Answer 9

warranty they may send it away, or replace it depending on teh condition of the item and a sevice contract is a binding contract between you and the company saying that they will service your procuct if need be....really depends on teh situation whether or not you get a service contract or a warranty

Answer 10

i once bought a vcr and they convinced me to get the service contract.......took it home and the first video i put into it got stuck.....blockbuster couldn't get it out..... took it back to the store (Sears) and the service department had it all fixed in a couple days.....lesson learned warrenty wouldn't cover the repair but the service contract did....if i had no warrenty the $100 dollar vcr would have costed me around $75 bucks to retreive the video tape and the vcr would have been busted....

since i had the service contract everything was free...............and i was able to give Blockbuster their crummy video back......