On Sun, 24 Jul 2005 07:04:25 GMT, David Taylor <(E-Mail Removed)>
wrote:
>> The best things in life are free. You'll have to settle for 2nd best.
>
My gripe is towards Dell to be honest. It's up to them to provide
>support for their products a little longer than something like a year to
>18 months post sale.
>David.
I'm bored. Might as well pontificate on the topic.
Dell sells extended warranties on most of their products. Prices and
terms vary but the usual rule of thumb is 10-25% of the purchase price
to go to 3 or 4 years. The cost/benefits vary depending on product.
I usually advise my customers to purchase the extended warranty on
high usage equipment (servers, primary office workstations). Laptops
are a problem because Dell has a separate "accidental damage" service
contract, which I find to be rather expensive.
The calcs are a bit messy, as it is necessary to estimate the
replacement and repair costs 3-4 years in advance. Give me a sample
product, initial cost, and I'll work the numbers for you. However, I
can also predict the results without grinding the numbers. The value
depreciation and replacement cost of a product 3-4 years out is often
cheaper than buying the extended warranty. The exception is laptops,
which have a much higher incidence of failure than desktops. You can
tell that Dell knows the MTBF numbers in advance because their
extended warranty costs vary considerably from product to product. In
most cases, extended warranties are like lottery tickets. They're a
tax on the mathematically deficient public.
I've rarely had to use Dell's warranty service. Unfortunately, my
results have been spotty. Onsite service was outsourced to a local
company that methinks has serious competence problems. Replacement
parts are often unobtainable. Next day service is typically 2 weeks.
Yet, when I can get Dell's attention, I can get them to ship me the
parts quickly and be done with it.
Also, you should understand that extended warranty service is not a
sign of a quality vendor. Quite the opposite. Extended warranties
are what is required to convince large customers that the vendor will
not implode leaving them hanging, and that the product is not a piece
of junk.
More often, extending the warranty is cheaper for the manufactory than
introducing the necessary quality in the product required to extend
the lifetime. If a unit has a 10% failure rate over a 4 year period,
but it costs 10% more to increase the product lifetime to 4 years
(which must be applied to ALL production units), it's much cheaper for
the manufactory to simply extend the warranty than to fix the problem.
Even better if you can get the customer to pay for the warranty.
That's why Dell pushes and telemarkets their extended warranty so
aggressively.
Dell could probably offer a lifetime warranty if they wanted. The
catch is that they must exclude accidental damage and customer abuse.
My guess is about half of the real warranty issues appear within the
first year. The out of box failures are usually a great predictor of
future reliability. Past about 3 years, moving parts start to fail
(fans, hard disks, drives). The rest are almost always abuse, lack of
required maintenance, and accidents. If Dell excludes all those, they
will have very few failures to deal with past the first year.
Methinks it would be more honest to call an extended warranty
"insurance". Effectively, you and the manufacturer are gambling on
the reliability of the product. If it fails, and you're not insured,
your repair costs will exceed the cost of the insurance. As with all
insurance policies, you only insure those things that you cannot
afford to lose and destroy (i.e. catastrophic losses). Whatever, the
name, the cost/benfits are calculated exactly the same way.
--
Jeff Liebermann
(E-Mail Removed)
150 Felker St #D
http://www.LearnByDestroying.com
Santa Cruz CA 95060 AE6KS 831-336-2558