One of the more common questions we get from business owners when purchasing new computer hardware, be it desktops, laptops, servers even network equipment, is "do I need an extended warranty?".
Most of the time when people think about extended warranties, they're thinking of the extra add-on garbage that they're offered when they buy a new appliance or even a vehicle. Most of the time these are provisioned through some third-party company and dealing with them is more headache than if you didn't have the warranty at all.
But computer systems can be a little different, especially as it pertains to business. So is buying an extended warranty actually a good idea?
How to determine if more warranty is worth it
If you're looking for a simple "yes or no" answer to the question, I'm afraid there's a little bit more to it than that. There are actually several factors that come into play when determining whether or not to go for additional warranty coverage for a device and the way these factors combine can heavily influence the decision.
What is the base warranty?
The first factor to consider is what warranty comes with the device by default. Most devices have a fairly basic 1-year warranty that states "if it breaks and it wasn't damaged by neglect or abuse we'll cover it". However, some computer systems will up that to a 3 year period. This is one of the reasons it pays to look at everything when purchasing as warranties are sometimes easy to overlook. Especially when your head is already likely swimming with system specs and pricing.
Is the warranty first or third-party?
This one is a big one. If the additional coverage is being offered by a third party, it's usually best to just say no thanks. Third-party warranty companies have a stigma that is hard to shake and for good reason. We've dealt with numerous clients who have purchased 3rd party warranties when previously buying systems at box stores only to find out they're next to useless when they go to file a claim.
If you're needing to claim warranty, it's likely because something isn't working. And the last thing you want is to be stuck on the phone for hours trying to find support. First-party warranties from trusted manufacturers provide this support and are always the way to go.
What is your life-cycle plan?
Next, you need to consider how long you plan to keep the device around. "As long as we can" is usually the answer we get but that isn't always the most efficient answer. It's typical for many businesses to replace/refresh IT devices (computer/server/network) every 3-5 years. For small businesses like mom-n-pops you can stretch that closer to the 5-year mark but, beyond that, you start to get into territory where the device can end up costing you more than you'd spend on replacing it.
Luckily, many device manufacturers tend to offer extended warranties that fit within that 3-5 year window. This means, as long as you refresh your devices regularly, you can effectively always be under warranty.
How expensive is the device?
Many people tend to look at the price of the warranty when deciding whether or not they want it. But what you really need to be looking at is the price of the devices you're buying. Say you're buying a $150 monitor. If it comes with a 3 year warranty out of the box then buying an extended warranty probably isn't worth it as you can easily recoup $50 a year and any extended warranty would need to be well under that. If it's a $1500 laptop however, extending that warranty from 3 to say 5 years is definitely worth it as recouping $300/year is a very different story and often makes the investment worthwhile.
Are there any extended features?
Sometimes it's not so much a warranty you're buying as extended protection for the device. Some extended warranties come with additional features like Accidental Damage Protection (ADP) or faster/higher levels of service and response. Be sure to take these factors into consideration as well and pair them with the purpose of the hardware. Buying laptops for field workers, it may be wise to add in ADP to help cover events of said laptop getting dropped or otherwise damaged. Likewise, for critical systems, ensuring you can get the issue resolved as quickly as possible should be high on the priority list.
It's important to read the fine print on these types of features however as there are often small "gotchas" hidden in them. For example, some ADP warranties will offer to fix or replace the device one time, but after that, the warranty is effectively over and void. This means, even if the replacement model malfunctions of it's own accord, you'll be stuck replacing it on your own.
So is it worth it?
By now, you're probably thinking one of two things: You're either thinking "this is too crazy and complex so I'll just forget about it" or you're thinking "so what would you do?". Well, here are our general guidelines for most devices:
- For expensive devices with a short default warranty, a factory extended warranty is likely worth it.
- For inexpensive devices (monitors/keyboards/mice/etc), you can pass.
- For mission-critical devices, always go for it (as long as it's factory)
Regarding that last point. Mission-critical devices such as firewalls and/or UTMs will typically have a subscription that includes warranty tied to them. Ergo you should keep that subscription current and don't let it lapse. You'll also notice we said most devices. It's certainly feasible to want additional warranty coverage for say, a $2000 monitor or not want coverage for a $1000 computer if the coverage is $800. But situations like that tend to be outliers.
Still not sure?
We get it. Sometimes these decisions are just plain hard. That said, if you're stuck on a project and would like some assistance, we're here to help.