A couple of years back I purchased a new outboard. A few weeks ago I received an offer from the manufacturer that enabled me to extend my “warranty” by 1-year, 2-years, 3-years or 5-years. As I was researching online the “ins and outs” of the offer I came across this article that ties directly into extended warranties in the marine industry. This was originally published by Tow Boat US in 2013 but all facts remain pertinent today. I found this on the Tow Boats website under informative articles and found it to be quite helpful so I wanted to share here.
Should You Buy An Extended-Service Contract?
By Charles Fort
Offerings from manufacturers can take some of the risk out of service contracts, but make sure you know the facts before you buy any contract.
It used to be that deciding whether or not to buy an extended-service contract on your engine (erroneously called extended warranties by some) was pretty easy. Until recently, our answer to the question was simple: Don’t. Service contracts of old were more profit centers for dealers than benefits for buyers, and navigating the exclusions and other confusing small print was downright scary. But manufacturer-backed service contracts have raised the bar; the question now deserves a second look. Here are some facts to help you decide if buying one makes sense for you.
Fact 1. Extended “warranties” you have to buy aren’t really warranties, they’re service contracts.
A warranty is a promise by the manufacturer that their product will be free of defects for a period of time. Warranties, by law, are included in the purchase price. A true warranty offers broad coverage and has the weight of state and federal warranty laws behind it. Problems with your new boat or engine, aside from wear and tear, accident, or abuse, will be covered under a manufacturer’s warranty. Service contracts, on the other hand, are really insurance policies generally underwritten by third parties, not manufacturers, and are regulated as such in most states. They are simpl