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In our 22nd year of providing the latest & greatest Warranty Information.
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Service Contract Pricing: Video Game Consoles: The average video game console protection plan costs 16% of the unit price, but there are a wide range of offerings online. One administrator wanted $54 to protect a $700 PlayStation 5 Pro, while another wanted $100 to protect a Nintendo Switch Lite that cost just $200.
Dec 26, 2024
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Service Contract Pricing: Televisions: The average TV service contract costs 15% of the TV's price, but there are a wide range of offerings online. One administrator wants just $50 to cover a $1,500 high-end OLED TV, while another wants one-third of the purchase price to cover a cheap LCD TV. We also found that big-box warehouse clubs are now bundling in free extended warranties as membership bonuses.
Dec 19, 2024
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Nine-Month U.S. Truck Industry Warranty Metrics: The four major U.S.-based truck manufacturers have seen product warranty claims costs increase, but have decreased their warranty accruals. At the same time, Paccar has seen amortized revenue from extended warranties increase, and Trane has seen new service contract sales increase.
Dec 5, 2024
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Right to Repair Rule Change: A new exemption to the Digital Millennium Copyright Act allows third party repairs to restaurant and medical equipment that use copyrighted software, including McDonald's ice cream machines. What does this mean for the growing right to repair movement in the United States, and how will this change with the next presidential administration?
Nov 28, 2024
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Extended Warranty Revenue Trends: Because so many extended warranty programs are run by small private companies or by huge companies that don't break out their service contract revenue, it's almost impossible to size the business accurately. This week, we're looking at data from three industry leaders, Assurant, Frontdoor, and Lowe's, to get a sense of the state of the American service contract industry.
Nov 21, 2024
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How to use Warranty Helper to check a Google Pixel phone warranty.
YTECHB, Jan 1, 2025
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Roadzen to administer Simple Energy's extended warranties for electric scooters.
Press Release, Dec 31, 2024
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Meta promises fix for software update that bricked Quest 2, 3, and 3S headsets.
Android Authority, Dec 30, 2024
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OneSolution Dental Implant Centers offer lifetime warranty for hybrid teeth.
Press Release, Dec 26, 2024
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Reidsville man gets new riding mower after TV reporter intervenes.
WFMY-TV Greensboro NC, Dec 25, 2024
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Rate Display helps auto & home warranty shoppers compare plans online.
WICZ-TV Binghamton NY, Dec 23, 2024
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Walton Digi-Tech Industries computer monitors get 3-yr. warranty.
Financial Express (BD), Dec 23, 2024
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Auto enthusiast says on TikTok to avoid Hyundai, Kia & Volkswagen.
Daily Dot, Dec 20, 2024
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Yamaha Motor UK motorcycles and scooters get 3-yr. factory warranty.
Superbike (UK), Dec 20, 2024
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Genstar Capital sells 2-10 Home Buyers Warranty to Frontdoor.
PE Hub, Dec 20, 2024
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Frontdoor completes acquisition of 2-10 Home Buyers Warranty.
Press Release, Dec 19, 2024
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California's lemon law is changing and car buyers have fewer protections.
Cal Matters, Dec 19, 2024
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Simpson Door Co. says exterior door warranties now cover dark paint colors.
Press Release, Dec 19, 2024
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Ford to change its quality leader as it chases lower warranty costs.
Reuters, Dec 18, 2024
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Build Warranty and Planning Portal launch online hub for property developers.
Planning, Building & Construction Today (UK), Dec 17, 2024
World's Largest Warranty Problems:
On the one hand, U.S.-based manufacturers are required to disclose their warranty expenses to investors. On the other hand, they try their best to obscure the news and bury it in plain sight when something really expensive happens. But as the saying goes, a picture's worth a thousand words. And in the charts that follow, it's hard to hide a billion-dollar warranty problem.
Over the past few years, every once in a while, a set of warranty expense numbers comes in that makes us wonder if there's been a typographical error in a company's annual report. Suddenly, there's a billion-dollar warranty expense and there's no explanation at all anywhere in the document.
Other times, a major safety recall or some other big event makes the news, and inevitably it gets reduced into a major escalation in a company's warranty expenses. For these, we don't need any additional explanations, but we never do find out exactly how much it costs.
Consumer Reports' 2006 Extended Warranty Ad:
There was panic in the industry when one of the most trusted consumer advocates told its readers not to buy extended warranties. Ten years later, the magazine's advice is almost forgotten, and the industry is bigger than ever.
In a few weeks we'll be marking a very important anniversary in the service contract industry. Just as the holiday shopping season of 2006 was getting under way, a major consumer product ratings publisher told shoppers that extended warranties were a waste of money. On Tuesday morning, November 14, 2006, the USA Today newspaper carried on the back page of the "Money" section (page 10B), the following full-page ad placed by Consumer Reports magazine:
Reaction was swift. Some said both the frequency of breakdowns and the average cost of repair was higher than Consumer Reports was calculating, making service contracts a better value than was admitted. Others said it was simply a matter of price, in that nobody would deny the value of a service contract priced at 0% of the product's price (in other words, free).
VW's Emissions Warranty Scandal:
Some students cheat on tests. But companies rarely do, because the cost of getting caught is very high. And in the long run, someone usually snitches. So isn't it ironic that a bunch of students caught one of the world's largest manufacturers cheating on a test?
At Volkswagen AG, the world's largest passenger car manufacturer, and the world's largest warranty provider, with some of the industry's highest warranty expense rates, things just went from bad to worst. The company, which spent 7 billion euro (US$7.9 billion) last year on warranty claims, could end up paying an additional US$3.6 billion in claims and fines to fix a major problem with almost half a million diesel cars that have been found to be illegally polluting the air.
It all started last May, when the International Council on Clean Transportation, a small nonprofit organization focused on the reduction of vehicle emissions, and a research team at the Center for Alternative Fuels Engines and Emissions within West Virginia University, documented the discrepancy between test levels and real world nitrogen oxide (NOx) emissions levels from new passenger cars equipped with diesel engines.
Warranty Expenses When Conglomerates Break Up:
In early 2020, two diversified companies spun off product lines to become "pure plays" in specific industries. And now, seven quarters later, the warranty expense metrics of the five new companies, which were previously blended together, have diverged in very distinct ways.
After news broke last month about the plans of General Electric Company and Johnson & Johnson to break themselves into three and two companies, respectively, it made us recall the break-ups of last year, when United Technologies Corp. and Ingersoll-Rand plc reorganized themselves into three and two units.
As we wrote about in the May 28, 2020 newsletter, our main interest in the break-ups of these conglomerates was how their subsequent financial statements would allow us to get a much clearer view of their warranty expenses, since the aerospace claims and accruals would no longer be blended with those of the air conditioning or industrial/building products lines of business. And now, with nearly two years of separate data in hand, that clearer picture has emerged.
The A-Team of Extended Warranties:
Ten companies, whose names all begin with the letter A, control at least 57% of the $40 billion U.S.-based and consumer-facing service contract industry. Most are administrators and/or underwriters of the protection plans, but a few are electronics manufacturers and/or retailers.
Extended warranties are a huge business in the U.S. Last year, consumers spent an estimated $17 billion on vehicle service contracts, and roughly $23 billion on protection plans for their appliances, electronics, computers, and mobile phones.
A huge chunk of that money is going to the people that sell them: the dealers and retailers who collect very healthy sales commissions and move on. But the rest is going to a long list of service contract administrators and insurance underwriters who seem to retain the risk and do all the work.
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