InCharge Institute of America, Inc.
Looking for a new car or appliance can be stressful. Worrying about whether your purchase will work properly or how long it will last makes it an even more stressful experience. But, if the product has a good warranty, you can be more confident in your purchase. In this article, we describe what a warranty does, why it is so important, and explain the different types available.
Warranties are an important consideration in comparison shopping, as they are assurances by the seller that the item you purchase is as promised. The proper warranty can save you a significant amount of money in the long run. If the item you purchase is damaged or does not work properly, the warranty may guarantee that specified steps would be taken to fix your purchase. Your warranty can cover the cost, or partial cost, of the repairs. Depending on the type of warranty, you may be eligible to receive a replacement for the item, if it cannot be repaired.
When shopping for an item, it is also important to consider what type of warranty is offered. Below are summaries of several available warranties:
- Express warranties. These warranties are offered by manufacturers on a voluntary basis to encourage customers to buy a product. These assurances can be both written and verbal. Companies that offer written express warranties must do so under the provisions of the federal Magnuson- Moss Warranty Act if the product is sold for more than $15. This 1975 law states that any written warranty offered must be classified as either a full warranty or a limited warranty.
- Full warranty. The full warranty includes three stringent requirements: (1) the product must be fixed at no cost to the buyer within a reasonable time after the owner has complained; (2) the owner will not have to undertake any unreasonable task to return the product for repair (such as ship back a refrigerator); and (3) a defective product will be replaced with a new one or the buyer's money will be returned when that product cannot be fixed after a reasonable number of attempts.
- Limited warranty. The limited warranty offers fewer benefits than a full warranty. For example, it may offer only free parts, not labor. Note that one part of a product could be covered by a full warranty (perhaps the engine to a lawnmower) and the rest of the unit covered by a limited warranty.
- Implied warranty. Under an implied warranty, the product sold is guaranteed to be suitable for sale. This means all parts work effectively and it does what it was designed to do, whether or not a written warranty exists. Implied warranties are required by state law and the only time they are not in effect is when the seller states in writing that the product is sold “as is.” If you buy a used vehicle “as is,” you have little legal recourse should it fail to perform, even if the salesperson made verbal promises to take care of any problems.
When making a major purchase, be sure to read written warranties carefully, and note that both full and limited warranties are valid for only a specified time period.