| Consumer
service plans: Worth the cost? | | |
| "When
my daughter spilled a whole glass of Coke into her laptop, the service plan didn't
cover it," he says.
"At the time of the accident,
her attention was elsewhere; she didn't see the spill until brown liquid was flowing
out the CD slot in the side of her computer. Strangely, when she took it in for
service under her service contract, they said the insides were full of evidence
of the spill and that her service contract didn't cover it." Generally,
if you spill a double latte or drop your laptop on the kitchen floor, no service
plan will help you. But for other
problems, a plan can step in. Do
you need a plan?
Service plans "can be very
sensible, depending on how much equipment you have and how much maintenance they
require," says Dan Heilman, editor of Computer User magazine in Minneapolis.
That's especially true if you're
buying for a small business. "If your company
has got more than a couple of networked PCs, but isn't big enough to employ a
full-time IT person, they can be a good way to get the security and the expertise
without paying an extra salary." But
for individual consumers, it's a different story. Heilman would tell a friend
not to shell out $249 to Best Buy or Dell for three years of service. "I
wouldn't, because the manufacturer's warranty will cover you if you've bought
a lemon. And the way price points are dropping, before too long $249 will get
you a new machine."
The exception is the small business with many
machines. "Again, I think it depends on how much hardware
you're talking about. For one laptop, I wouldn't bother, but if you have a 50-person
sales force that's always traveling and beating up their equipment on the road,
then it might be a good idea." When
you definitely don't need a plan
Before you sign anything, look at the
dollar value of what you're buying. Some electronics stores operate the way some
jewelry counters do, selling insurance at a cost that doesn't jive with the product. If
the cost of your desktop has decreased by 20 percent this year, or if your digital
camera is half the price it was last year then you don't need a plan. Even
the sales guys will admit that, if you push hard and ask directly. And
you may want to look into the reputation of the electronics store or computer
vendor before you sign up for their plan. Consumer Reports
has detailed information on where to buy a computer, and it's worth checking out
before you make the double investment of a plan. Saved
by the plan
Some consumers swear by their service plan. "I
paid the extra money for the two-year service plan when I bought my Dell Latitude
laptop, and it paid off a couple months ago when my USB port suddenly stopped
working," says Maggie McKnight, a graduate student in Iowa City, Iowa. "Within
24 hours of my calling Dell, a guy came to my house, took my laptop apart on my
desk, replaced the USB port, and cleaned up after himself. | 
