Archived Copies of Warranty Week

December 2002 to Today

Service Contract Pricing: Appliances: While the typical appliance service contract costs roughly 14% to 16% of the price of the product it protects, there is an enormous amount of variation, depending on which administrator the retailer works with, how long the contract lasts, and whether the product is low end or top of the line.
February 9, 2017
Service Contract Pricing: Microwaves: Built like electronics but sold like an appliance, the microwave oven is a hybrid of two different product categories. And with service contracts costing almost 19% of the product's price on average, it also has one of the highest average costs of protection. And there's a big difference in the cost of protection plans for units priced at the high or the low end of the market.
February 2, 2017
Service Contract Pricing: Ranges: After looking at household appliances that clean clothes, wash dishes, and store food, we round out the major categories with a look at the classic range: a combination of a stove and an oven used to cook food. What do their service contracts cost? Does it vary by brand or product price?
January 26, 2017
Service Contract Pricing: Refrigerators: The bigger the refrigerator, and the more it costs, the lower the ratio between its list price and the price of protecting it for a given length of time. And the longer the duration of coverage, the more it will cost, though the industry-wide ratio isn't close to a straight line in terms of cost per year.
January 19, 2017
Service Contract Pricing: Electronics: Though the overall average is 17%, there's a wide range of pricing variation based on the duration of coverage and the inclusion of accidental damage coverage. And then there are retailers and administrators that price high because they can. A simple shopping survey of product and protection plan prices reveals the difference.
December 8, 2016
Service Contract Pricing: Laptops: Laptop service contracts, as a percentage of the price of the product they protect, are more expensive at the low end of the market and less expensive at the high end. But there is a very wide variation between the top and the bottom. Laptop service contracts can cost anywhere between 4% and 91% of the price of the computer.
October 27, 2016
Service Contract Pricing: Digital Cameras: Some service contract providers charge more than half the price of an inexpensive camera to protect it from drops and spills. Others charge less than the sales tax for service contracts that cover cameras selling for multiple thousands of dollars. There seems to be much less consistency in the pricing strategies for digital camera protection plans than there is for the products themselves.
October 20, 2016
Service Contract Pricing: Blu-ray Disc Players: The price of the product varies tremendously among top retailers. And so does the price of the protection plans they pair with these units. Some plans are priced low because they don't start coverage until the manufacturer's warranty ends, and they don't cover accidental damage. But others vary for more mysterious reasons.
October 13, 2016
Service Contract Pricing: TVs: Although the average price of a TV service contract is 17% of the TV's price, there is a tremendous amount of variation. One administrator wants $30 to protect a $400 TV while another wants nearly 2/3rds the price of a high-end Sony set for a service plan.
October 6, 2016
Service Contract Insurance Stocks: While service contract underwriting is only a small part of the insurance industry, it's a large part of the revenue stream of a handful of insurance companies. Here are the stock price and dividend yields of eight of the largest from May 2008 until today.
December 3, 2015
International Aircraft Warranties: The bigger the plane, the higher the price, and the lower the warranty expense rate as a percentage of that average selling price. The products of the top seven aircraft manufacturers in the world can basically be ranked in size order, with the largest paying under 0.4% on warranties and the smallest paying 4% or more on warranties.
August 6, 2015
New Home & RV Warranty Report: Put a home on wheels and its warranty costs rise. While the warranties on traditional site-built homes typically cost the builder about one percent of selling price, the warranty cost of mobile homes is somewhat higher. And the warranty cost of modular, prefabricated homes may be highest of all.
May 21, 2015
Data Storage Warranty Expenses: While the traditional hard drive makers have more predictable and stable warranty costs, the newer solid state and flash memory systems seem to have lower costs. However, their price per gigabyte of capacity is much higher.
December 11, 2014
Warranty Accruals per Vehicle: Though currency fluctuations are a major factor, in 2013 both GM and Ford accrued less per vehicle sold than any of the European or Japanese OEMs. And though BMW and Daimler command a higher price per vehicle, they've accrued less and less per unit over the past decade as they continue to cut warranty costs.
July 17, 2014
Warranty Cost per Vehicle: When it comes time to budget for warranty work, corporate planners apparently expect a Ford to cost twice as much as a Honda; a Fiat to cost twice as much as a Ford; and a Mercedes to cost twice as much as a Fiat. Currencies play a role in their planning, but so does selling price, parts cost and local labor rates.
July 12, 2012
Top Appliance Retailers: In an informal online shopping excursion, we found all but one retailer selling extended warranties, typically for between 10% and 20% of the price of the appliances they cover. Durations ranged from two to five years, though one regional retailer also offered a ten-year "major component only" plan.
January 20, 2011
Making Holiday Shoppers Happy with Extended Service Contracts: How to increase retailer extended warranty attachment rates in the midst of a holiday price war? With the 2010 holiday gift-giving season well under way, here are eight strategies to help retailers increase extended warranty sales.
December 9, 2010
Price Optimization: A Potent Weapon for the Warranty Industry.
October 29, 2009
New Home Warranties: One CEO recently said the worst of this cycle may be behind us. In terms of sales decreases and price declines, maybe so. But in terms of warranty costs, the worst is right now, as builders have less cash to pay for warranty work on units they sold at the end of the boom years. And then there's the question of how costly the defective Chinese drywall will turn out to be to replace.
September 24, 2009
Warranty Management: Value and price are affected by product quality, which can be measured by fluctuations in warranty cost. But warranty is too often treated as merely a cost that must be reduced, without heeding its link to quality, price, and ultimately profits. And warranty is very different from accounting in that a big part of the job is using probability functions to predict the future.
October 16, 2008
Green Warranties: As the price of traditional fuels soar, the alternatives are becoming more viable. And manufacturers are promoting the growing viability of electric and biofuel-powered vehicles through longer warranties. Government is also getting involved by mandating higher fuel efficiency, new fuel blends, lowered emissions levels, and longer warranties.
May 14, 2008
Extended Warranties: Consumer Reports took their best shot. Now the industry has responded, citing the value, price, convenience and savings of time and money as some of the benefits of enhanced service plans.
November 29, 2006
Extended Warranties: Consumer Reports says they're not needed except in a few cases. Others say they're a good value at a reasonable price. As the holiday shopping season begins, whose advice will buyers follow?
November 21, 2006
Disk Drive Warranties: As our warranty tour continues, we've finally found a product segment for which warranties vary tremendously from one company to the next. And competitive marketing strategies seem to matter more than either product specs or price.
August 22, 2006
Extended Warranty Advice: An industry expert tells retailers and manufacturers how to get more value from their extended warranty data, possibly helping them to decide what to sell and how to price it based on how much it costs to repair.
March 28, 2006