Service plans are contracts. Consumers that opt in will pay an added fee in order to get coverage of a purchased product, usually something of perceived value. These contracts are much like extended warranties but with some key distinctions. Extended service plans are widely available in many varieties.

These contracts are different from warranties that are given by the manufacturer of a product. Usually these kinds of contracts will require preventative and routine maintenance in line with the manufacturer warranty. Still, there does not have to be product failure or malfunction in order for these to be activated. These plans start on the purchase date, which is different than extended warranties that become active when the manufacturer warranty expires.

A big distinction that can be made between these two contracts is that warranties are strictly designed to cover the defects in workmanship or materials used. In contrast, the service plans will cover the failure of a product, regardless of the cause. Usually there are some exclusions outlined in the policies of the plan. Most come with extra benefits, such as: accidental damage, technical support, no lemons policy, priority service, and theft.

How the products will be serviced is determined by the plan itself. Some will say that the work is to be done by technicians that have been hired by the retailer. Others may call for the product to be sent somewhere else to be fixed, which could add to cost because of cost to ship. Retailers may also choose to give the consumer a store credit or a new replacement from their inventory. This usually happens when the product proves to be non-repairable or too costly to fix.

Ultimately, the consumer is the person who decides whether this is needed and worth the money. Many times this is based on what the product is and the perceived value it has. Most standard contracts will cover the average repair costs and are given to those as a way to keep customers from hiring competing companies to do the repair work.

As the name would suggest, these contracts tend to last for a while and sometimes include added perks. People who do not know much about the product that they are purchasing should consider choosing a plan that includes customer support and similar benefits. Still, this is a decision that should be left up to the consumer only because these are in no way required.

Plans are accessible in many parts of the worlds, through many different sources. These are most popularly paired with products that are thought to be valuable or fragile, for instance: devices that are electronic. Some goods sold at stores do not earn retailers that much money so it is important that these parties sell contracts of this sort and accessories to bring in more money.

Extended service plans refers to contracts consumers may opt to have when purchasing certain goods. These are much like extended warranties, but there are some notable differences between the two. In general, they are used to replace or fix products that have malfunctioned or failed. These will vary in cost and coverage.

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