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Are warranties and service contracts the same thing?

On Behalf of | Sep 16, 2019 | Consumer Protection

When you purchase certain products in Charleston, the expectation often is that the maintenance of that product is covered under a warranty. In many cases, you may indeed be right. What may seem to confusing to you, however, is to see a company that offers products supposedly covered by warranties than also offer service contracts. Are extended services not covered under warranty? If so, what is the need, then, for a service contract? Or are service contracts and warranties essentially the same thing? 

First and foremost, it is important for you to understand that warranties and service contracts are not the same. Per the Federal Trade Commission, service contracts are known as “warranty pieces.” This use of the word warranty can cause confusion (in fact, some service contracts are even marketed as “extended warranties”), and the fact that the also cover many of the same things (e.g. repairs, replacement parts, routine maintenance) can serve to compound that. Yet the distinction between the two is that a product warranty should be included in the purchase price, while a service contract is typically only available at am additional cost. 

Your manufacturer’s warranty covers defects with a product itself, while retailer warranties may cover damages to the product. Both, however, are only valid for a certain period of time. A service will often continue on after the end of the warranty’s protection (hence the designation “warranty piece”). This means that unless a retailer promises that a service contract is included in your purchase, you cannot demand that repairs or maintenance be done after the warranty expires. Conversely, if you pay for a service contract, a retailer can not then say that they are not obligated to address issues with a product due to the warranty having expired. 

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