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Understanding Extended Protection Plans

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There are those who are adamant that all such plans are consumer rip-offs that provide retailers with juicy profits at the expense of ignorant buyers. Some argue that the idea of having the extra protection, particularly for laptop computers, is a very real necessity. The fact of the matter is that the truth lies somewhere in between the two extremes.

Obviously, computer stores would not promote protection plans if they were not extremely profitable to do so. The revenues collected far outweigh the costs involved to honor the plans. Companies are in business to make profits for their shareholders. This is normal and should never be construed as an evil plan by unscrupulous barons.

Note: I maintain this in spite of the recent revelation about a certain office supply chain rigging the price of computers, hiding from the consumers the fact they were buying a protection plan, effectively removing their right of choice. It should be noted that this appears to have been a situation involving a small number of stores in a certain locality or state and not a corporate policy.

On the other hand, protection plans can be very good for consumers, as long as the consumer understands what he or she is purchasing. I have purchased several computers over the years, from various sources. Whenever a protection plan is promoted, I have found it necessary to ask several questions to know what I am actually receiving for my money if I buy into the plan. Sales people have rarely provided enough information so I could make an intelligent decision.

I offer the following observations concerning the purchase of protection plans:

If you like the idea of extended protection, consider that there is less need for the protection with the purchase of a desktop computer as compared to a laptop. This is true not only because a desktop is not suited for a portable role, but also the one year of factory warranty should be ample time to expose any defect in materials or workmanship. Also consider that desktop protection plans are much less expensive, reflecting the retailer's knowledge that there is much less risk of damage compared to laptops.

Extended protection plans are usually available in more than one type. The basic plan will provide the same level of protection as the original factory warranty, except you have it for an extra two or three years, depending on time frame you choose. It has been my experience that this type of plan will not cover dead pixels on your laptop LCD, nor will it cover any accidental damage. If your laptop LCD were to die, or if you were to see dead pixels after the expiration of your factory warranty, then your only reasonable remedy would be to buy a new laptop, as new LCD screens are almost as expensive as a new computer. A used working LCD is only cost effective if you find the specific one for your model on eBay, and you can install it yourself. If you have never seen a dead pixel on an LCD then you cannot imagine how distracting it is to see that bright speck on your screen every time you boot your computer. While the manufacturer's standard warranty will replace your LCD plagued by dead pixels, it will only do so after a predetermined number of them have appeared, and that number varies from one manufacturer to another. I have read a well known name brand manufacturer's documentation stating that dead pixels are a normal occurrence in the production of LCDs and to not be overly concerned about them (yeah, right!).

Another type of extended protection plan covers all the issues included in the factory warranty, but additionally offers accidental and screen protection as well. If you drop you laptop, crack the screen, or if someone kicks it, or you see dead pixels, your investment is protected. Now there may be accidental damage coverage plans that do not include screen protection. The point is that there are numerous plans available that cover more than what we looked at in point 2, but you as a consumer must ask for the details of all the plans that are available for your computer. Get all the facts and decide which one is best for your needs.

Feel free to join in the discussion and share your thoughts on the issue. What do you like or dislike about extended protection plans? What have been some of your experiences in this area?

Edited by Joe V

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