Customer Review

1,126 of 1,175 people found the following review helpful
4.0 out of 5 stars To buy or not to buy (an extended warranty), that is the question!, August 23, 2010
Bought a Gen2 Kindle for my wife (she loves it) WITH an extended warranty ("EW"), on which I based my rating, but to be completely accurate, its true rating won't be known unless and until I ever have to make a claim. I have on order a Gen3 for my daughter and am debating (with myself) whether to order an EW for her Kindle. My general feeling about insurance (I know, I know, an EW isn't insurance, but I think the decision making factors are the same for both) is that one ought to insure only those risks one can't afford to assume. In other words, if you happen to be Bill Gates you don't have to insure your $20+ million house because if it burns down you can afford to replace it. Insurance is always a bad deal because (1) the premium is based on risk of loss, which the insurance company knows very precisely; (2) the premium includes its cost of doing business; and (3) the premium includes its profit. Therefore, the premium cost is greater than the risk of loss and you should not buy insurance if you can afford to shell out the cost of buying a new Gen3 should it break or be damaged.

So, for $50 you/I get "protection" (I'll use that word to avoid the "not insurance" argument) only for the second year, since the first year is covered by the warranty, plus Accidental Damage for two years. And keep in mind that the EW doesn't seem to include loss or theft, and only includes one battery replacement. For that you/I would be paying MORE THAN 25% OF THE COST OF THE GEN3 KINDLE!!!! Are one out of every 3 or 4 Gen3 Kindles going to break in the second year or be damaged in the first two years? That seems extremely unlikely to me and, since I can afford another $180 if I lose my "bet," I have made up my mind, as I write this, not to buy the EW and I will insure it myself. (I can call it insurance if I want to because I am the one insuring it. I can call it anything I want to, including "covering my own bet."

I have had the EW item in and out of my cart for a while due to my indecision, but I am now going to remove it permanently. Even if I have to buy a new one within the next two years, I think I will have won the "probability game," and I would not be surprised if a Gen4, at a lower price, will be available by the latter part of the two year period if I do have to buy a new one.

Thanks for helping me make up my mind.

BTW, in case you're wondering why I don't have an eReader, it's because I listen to audiobooks when I commute. I found it difficult to read and drive at the same time.
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Comments

Tracked by 7 customers

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Showing 1-10 of 46 posts in this discussion
Initial post: Aug 27, 2010 1:28:29 PM PDT
E. Lindgren says:
This is a good example of how writing out your own thoughts and sharing them with others can help you make a good decision.

In reply to an earlier post on Aug 29, 2010 11:31:55 AM PDT
C. E. Smith says:
I agree with your assessment and explanation of an EW...not just for Kindle, as you noted, but for anything...especially small investments. The "Price Point" is different for everyone but as you noted, most items come with a one year limited warranty. I want to get years of service from the products I purchase, but depending on the initial cost, if I get a few years use out of them, I usually feel I got my money's worth and at that point the item is disposable. On the other hand, I had EW on my SUV and the transmission went up in it! Woo Hoo! Got my moneys worth on that EW! After a $50.00 deductable I was on the road again with a new transmission! So yes, we should choose wisely! Long live our K-3s

In reply to an earlier post on Aug 29, 2010 5:06:54 PM PDT
MikeCG says:
Years ago I bought the EW on a car, that really paid off. Can't recall how long ago, but it had airbags at a time when not all cars had them. My two sons were going on a cross-country driving trip, so I let them take the air-bag equipped car for safety's sake. Well, the lower radiator hose broke, the coolant departed the engine, the red overheat light went on, but the boys didn't know enough to stop!!! They thought they would continue driving until they came to an auto repair facility. They finally stopped when the engine turned into a collection of metallic junk. The EW covered the total cost, less $50 deductible, of a new engine, $9000, just within the mileage expiration of the warranty!!! Win some, lose some, but I won in spades that time. My feeling now is that cars are quite reliable, but, again, the main decision factor is whether, if disaster strikes, you would be able to absorb the loss.

In reply to an earlier post on Aug 29, 2010 5:28:36 PM PDT
C. E. Smith says:
Awesome! Score one for the Home Team! Rock On! Yes, your last line says it all...and car problems tend to be pricey! They do not fall in my disposable category! Love to hear when we, the everyday people, prevail! Best Wishes!

Posted on Sep 1, 2010 3:37:21 PM PDT
Lucy P says:
When I bought my K1 I didn't buy the EW, but with my K2 I did and I'm glad I did. My K1 lives on with my daughter, but for some reason my experience with the K2 has been more problematic. My first K2 died -- it would delete a book I was reading when I turned the page -- after about 7 mo, which was within the Amazon warranty time period. Amazon sent a refurbished one out the next day and it lasted until a few days ago when the joystick became wonky. Yesterday I called Amazon and because my EW was still good until Feb '11 I also got another K2 which arrived today. But this one is, I think, a new one. My K3 will arrive mid this month and I bought the EW for it as well.

In reply to an earlier post on Sep 3, 2010 4:57:00 AM PDT
[Deleted by the author on Sep 3, 2010 5:03:50 AM PDT]

Posted on Sep 3, 2010 5:03:19 AM PDT
Last edited by the author on Sep 3, 2010 5:05:18 AM PDT
Regarding the Kindle last generation, I was also having the same dilemma, regarding EW. I like the points you made, and think you should also have added, that by the time this kindle's warranty is up, a newer better version will be available, perhaps, and it would be saving you $49 towards that.Going with the theory that you can afford to replace it, should something happen to it. ( replying to MikeCG's post)

Posted on Sep 4, 2010 8:15:11 PM PDT
Taylor Rand says:
Ordinarily, I'd pass on any Extended Warranty on a (relatively) inexpensive item like the Kindle 3. I can't recall every buying or needing a warranty on a minor electronic device; they've been either old-technology reliable (television), easy to replace (cellphone), rarely moved (stereo), or just low-tech (toasters, for example). Besides, I can easily see how even an organized person like myself could lose track of a warranty a year or two later.

But the Kindle is a new technology device that frankly may have a few kinks to work out and it's a gizmo that I'll be carrying around here and there (with the small but not trivial possibility of my dropping it). If I were going to just read the Kindle while relaxing while on the couch or in bed, I'd not bother with the extended warranty's additional protection. I'd save the $50 for something else.

So, for $2/month extra, it might be worthwhile to be assured that should I, in my clumsiness, drop the Kindle while walking to the kitchen or accidentally place it at the edge the edge of a table or bed and have it tumble to the floor, that I can replace the device without having to buy the whole thing again.

It's the mobility insurance for me then: a $180 device that I wasn't moving around (like say, a microwave oven) I wouldn't buy extended warranty for. Or a $45 MP3 player for audiobooks that I do carry around and do drop, I wouldn't buy an extended warranty for it 'cause I can replace it without much regret.

The Kindle though I will be carrying with me very often. That - and the other issues I noted - makes considering the Extended Warranty more than a question of examining the statistical probability the Kindle will malfunction.

I do think 27% of the Kindle 3 price is a bit much though. That's what makes me wonder if I should pass on the whole thing. :)

In reply to an earlier post on Sep 5, 2010 10:27:52 AM PDT
Susan Santo says:
Square Trade warranties are a better deal. Check into them. I crushed my iPod and I did not have accidental damage protection. They REFUNDED the amount of the warranty!!! I bought a new iPod and this time I made sure I got the accidental damage coverage.

Posted on Sep 11, 2010 2:15:57 AM PDT
L. Hawkins says:
too funny!!!
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