Consumer tip: Service contracts are not extended warranties

When purchasing a product, typically one with mechanical or electric parts, you may be offered a service contract. A common consumer response is that the product already has a warranty so why would one need a service contract?

A service contract, often referred to as an extended warranty, is not a warranty at all. It is an agreement between the purchaser and typically an unrelated third party whereas a warranty is between the purchaser and the manufacturer or seller. In a service agreement, the service provider agrees to provide certain repairs beyond what is covered in a warranty and only for a specific time period, usually after the warranty expires.

Many consumers will ask about the cost first and the terms second when it should be the other way around. Don’t get lured into entering into a service contract by a seemingly low price if the terms would make it impractical or useless. And service contracts typically don’t need to be purchased at the time you purchase your product.

More information at marincountyda.org or 415-473-6495