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June 2, 2022  |  Education

Can a warranty save you money?

How does a warranty save you money?

For some people, a warranty means the length of time you can expect to use a product without troubles — an expensive repair always seems to be required just after your warranty ends. However, there’s much more to a warranty than that. A warranty is a legal agreement that not only protects you from inferior products, but it can save you money as well.

What is a product warranty?

A product warranty is a promise. It extends from the warrantor to the consumer and outlines what can be expected of a product and what recourse the consumer has if the product fails prematurely. There are two types of warranties: implied and express.

Implied warranty

An implied warranty is created by state law, not the warrantor. It’s an unspoken, unwritten promise that the product will function as intended at the time of purchase. For example, if you buy a space heater, it must do what it says it can do: produce heat. If the product can’t perform as it was advertised to perform, the merchant must remedy the situation at no additional cost to the consumer.

Furthermore, an implied warranty covers the fitness of a product. If, at the time of purchase, the consumer was promised by the merchant that the space heater was sufficient for a 400 square foot garage, but in reality it can only warm a 200 square foot room, the consumer won’t be stuck with a product that doesn’t perform as promised.

Express warranty

An express warranty is voluntary. It isn’t governed by state laws. It’s a specific promise that the warrantor makes regarding its product. The express warranty is often in the form of a document that has many points. However, it could simply be part of the advertising found on the product’s packaging. For instance, if a container of bleach is labeled “color-safe” but it contains actual bleach that damages your clothes, the consumer will be protected.

Full vs. limited warranty

The Magnuson-Moss Warranty Act was passed in 1975. It’s a federal law that was written to protect the consumer, and it was also enacted to promote competition among manufacturers. One stipulation of this comprehensive act is it requires every product that costs more than $10 to be clearly designated as having either a full or limited warranty.

Full warranty

To be considered a full warranty, five conditions must be met:

  1. There is no limit on the duration of the implied warranty.
  2. The warranty is transferable.
  3. There is no charge for the warranty.
  4. The consumer can receive a replacement or a full refund if the product cannot be repaired.
  5. There are no preconditions required for the consumer to receive service.

Limited warranty

If one or more of the conditions of a full warranty are not met, it’s a limited warranty. When this is the case, the manufacturer must clearly state this fact. While a limited product warranty isn’t always a reason to be wary, it does mean the consumer isn’t getting all the benefits available. For example, when a product with a limited warranty is sold, the warranty coverage may end with the transfer of ownership.

How a product warranty saves you money

There are several ways a product warranty can save the consumer money. These benefits fall under three broad categories: protect the buyer from inadequate products, reduce the cost of ownership, and reduce the cost of medical bills.

Protect the buyer from inadequate products

If you purchase an appliance such as a washing machine, a dryer, a refrigerator, or an oven and it doesn’t work as intended, a warranty keeps you from being stuck with the expensive item. This might seem obvious and you would never expect to take the loss on a faulty appliance, but some people forget you get the same protection for low-price items. If you buy a $15 waffle maker that doesn’t work, a warranty ensures you don’t lose that $15. 

Reduce the cost of ownership

The cost of ownership is any costs that you incur from owning a product. For instance, filling up your vehicle with fuel is a cost of ownership — you wouldn’t be spending money on fuel if you didn’t own the vehicle. A good warranty may save you money in this area. If a product needs repair prematurely (and the part is covered under the warranty), the consumer is not responsible for the cost of that repair. Some tools, such as Craftsman, have a lifetime warranty. If you have a bow saw, for example, and the blade breaks due to normal use, you may be entitled to a free replacement blade.

Reduce the cost of medical bills

While it isn’t pleasant to think of the money saved because of an injury, this is another area where a warranty can help save you money. The warranty outlines the expectations of a product and how it should perform. If a consumer suffers an injury that was caused by a defective product, the warranty can help verify that you were using the product as intended and the manufacturer is liable.

FAQ

Does the manufacturer have to put a warranty in writing?

A. Putting a warranty in writing is a voluntary act; the manufacturer does not have to do so. However, even if a warranty isn’t set in writing, the consumer is still protected by the implied warranty.

Does an express warranty have to be made available to the consumer prior to the sale?

A. If the manufacturer is offering an express warranty, it must be made available if the consumer would like to read through it before purchasing the product. If the transaction is not being carried out in person, there are provisions that dictate how this is to be accomplished.

Can a manufacturer refuse to honor its warranty?

A. An express warranty is a contract. If a manufacturer refuses to honor its warranty, you can sue for breach of contract. How this is handled varies from state to state, but it gives the consumer a way to settle any disputes that may arise. However, there a few reasons a manufacturer might deny your warranty claim, so make sure to read the warranty carefully.

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Allen Foster writes for BestReviews. BestReviews has helped millions of consumers simplify their purchasing decisions, saving them time and money.

BestReviews spends thousands of hours researching, analyzing and testing products to recommend the best picks for most consumers.