Archived Copies of Warranty Week
December 2002 to Today
- Semiconductor Warranty Report: After a sudden jump in claims in 2018, warranty expense rates took a jump early last year. But by year's end, both the amount of money going towards warranty costs as well as the percent of sales it represented were back down to normal ranges. But warranty reserves haven't been this low since 2009.May 21, 2020
- Medical & Scientific Equipment Warranty Report: The amount of warranty expense reported by these manufacturers has never been lower, but their expense rates have been slowly rising for the past few years after more than a decade of cost reductions. Even though it's last year's data, the importance of low failure rates has never been higher.May 7, 2020
- Top Chinese Automaker Warranty Expenses: Claims jumped but accruals fell. Automotive revenue rose but unit sales declined. The warranty metrics of the top Chinese OEMs are puzzling, and the amount of accruals they each set aside per vehicle sold is impossibly low. Something is just not right with these numbers.August 1, 2019
- Homebuilding Warranty Report: Warranty expenses are rising but so are new home prices, keeping the average amount of money accrued industry-wide after each closing relatively steady, and allowing the accrual rate as a percentage of revenue to actually decline a bit. But many homebuilders continue to raise and reduce their warranty accruals rather impulsively, and sometimes skip them altogether.June 28, 2018
- Commercial Service Contracts, Part 1: The importance of extended warranties sold to commercial customers is steadily increasing, as measured by the percentage of revenue they represent for manufacturers, and by the amount of business they represent for insurance companies. And in response, industry leaders have launched a new trade association for commercial service contracts.December 7, 2017
- 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: 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
- Appliance Protection Plans: When it's all counted together, a huge amount of money is being set aside to pay for product repairs. Manufacturers finance their warranties and consumers can purchase additional protection through either service contracts or home warranties. It all adds up to about $6.77 billion spent last year on protection plans.January 28, 2016
- U.S. Automakers' Warranty Expenses: Because there were so many big recalls in 2014, the amount spent on warranty soared. Last year, things began to get back to normal, but expense rates are still at elevated levels. Nevertheless, unit sales totals smashed a 15-year-old record in 2015.January 7, 2016
- Top Warranty Acquisitions: Every once in a while, a manufacturer or retailer is acquired and ceases reporting its warranty expenses, while the acquiring company reports the amount of warranty reserves it gained through the purchase. What follows are some of the largest transactions of and by U.S.-based warranty providers in the past 18 months.November 12, 2015
- Warranty Accruals for New Homes: When a new home is sold, the builder sets aside a specific amount of money in the form of warranty accruals to cover its predicted warranty costs. Some builders do a consistently good job, accruing roughly the same amount per home sold from one season to the next. But others raise and lower their accrual rates over incredible ranges that seem to have little to do with predicted warranty costs.August 13, 2015
- International Consumer Goods Warranties: One good reason that not much is ever written about the expense of covering consumer electronics with product warranties: costs generally aren't that high. Except for laptops and smartphones, the expense rates for most consumer electronic products are generally quite low. But there are some big gaps in the amount of warranty data that's available, outside of a handful of top industry brands.July 30, 2015
- Electrical Power Equipment Warranty Report: While the warranty expenses of most of these manufacturers are generally low, there hasn't been much of an effort to drive them even lower. However, some companies that are seeing costs increase are still cutting the amount they set aside for the future.June 25, 2015
- Apple's Extended Warranties: Every once in a while, someone sues Apple over its sales of extended warranties. But they never quantify the amount of money involved. Turns out, it's huge, based on some assumptions we made using figures from the company's own annual reports.January 17, 2013
- Warranty Estimates, Part 3: Companies in the building trades are supposed to carefully estimate the size of their warranty liabilities. But sometimes, their estimates are too low, and the amount they set aside is too meager to pay all their expected claims.November 21, 2012
- Warranty Estimates, Part 2: Automotive companies are supposed to carefully estimate the size of their warranty liabilities. But sometimes, their estimates are too low, and the amount they set aside is too meager to pay all their expected claims.November 15, 2012
- Warranty Estimates, Part 1: Companies are supposed to carefully estimate the size of their warranty liabilities. But sometimes, their estimates are too low, and the amount they set aside too meager to pay all their claims.November 8, 2012
- Average Warranty Costs per Industry: One can get a good idea of the industries where warranty is most important by looking at both the amount they pay and the percentage of sales that those payments represent. And the data suggests that automotive, computers and appliances are at the top of the list.May 31, 2012
- Solar Warranties, Part 1: They can last up to 25 years, but what does that really mean when the technology is changing so fast? And even if a company really expects to pay claims in 2036, how do they prepare for them now by making the right amount of accruals at the time of sale?December 1, 2011
- Auto OEM Accruals per Vehicle: Measured as a percentage of revenue or as an amount of money set aside per vehicle sold, warranty accruals have declined dramatically for Ford and GM. Some warranty metrics even put Ford slightly ahead of Toyota, though Honda remains the low-cost champ.July 8, 2010
- Sports Equipment Warranties: Everything from StairMasters to snowmobiles carries product warranties, and cost their manufacturers a significant amount of money for warranty work. But compared to the billions spent by GM, HP and others, it's easy to overlook their corner of the warranty industry.December 11, 2008
- RV & New Home Warranties: Sales are declining so claims rates are rising. But a few homebuilders have radically cut the amount they set aside per unit sold, raising suspicions that they're intentionally estimating low. Meanwhile, homes on wheels continue to show higher warranty costs.June 20, 2008
- WCM Workshops, Part Two: The day before the opening of the Warranty Chain Management Conference next month, attendees have a chance to hear experts talk about how to reduce warranty-related litigation and how to cut down on the amount of warranty fraud.February 21, 2008
- The Warranty Reserve: With 18 months of data in hand, it's now possible to begin defining a normal range for the size of the warranty reserve fund, expressed as a multiple of the average amount spent per month on claims.September 14, 2004