Lipstick on a pig?

Last week I noted that Best Buy announced a new Black Tie service plan. This announcement raised (for me and for many of you, it seems) a difficult computer-buying question. As I said, I don’t advocate buying a warranty in response to a hard-sell in the store — whether that store is Best Buy, Circuit City, Sears, or someplace smaller. I think the post-purchase hard-sell on warranties is the low point of every purchase: car, cell phone, washing machine, or computer. Sure, I take a brochure home to compare against my other options. But I do not like to be pressured into adding 20 percent to the purchase price after the fact. But computers are expensive and not everyone is comfortable going warranty-free.

So I was pleased to hear from Steve Abernathy, CEO of SquareTrade.com. And not only because he said Best Buy’s Black Tie plan was “like putting lipstick on a pig.”

That was pretty good, but I was also glad to hear that he had a solution to my problem question: He offered his company’s warranties, which are sold online and not as an arm-twist in the store, as an option.

“Our first premise,” said Abernathy, “is that for a warranty to be a sensible purchase, it has to be reasonably priced.” SquareTrade.com warranties run, typically, about 12 percent of the purchase price, says Abernathy. “But the industry standard tends to be about 20 percent,” he says, “sometimes a lot more.”

I love comparison shopping, and it’s usually difficult to do with warranties, so I went to the site to check this claim out. I bought a new cell phone last week. I declined the warranty on it because it cost $5 a month. At SquareTrade.com, a three-year-warranty for that phone was $23 — or what my cell phone provider wanted for just 5 months. I could even add accidental damage coverage for another $47. A laptop I bought a few months ago could be covered for $77 for a year. If I’d bought the warranty within 30 days of my purchase, though, I could cover it for three years for $90. My fancy DSLR camera? $102 for three years (if the camera is new). That new washing machine I covet? Three years for $70. OK, that’s pretty interesting.

But just as interesting is the online purchase model. I have spent too much time in my life keeping track of those scraps of paper they hand you when you buy a warranty, lest the day ever come when I need it. So a Web site where I can check what’s under warranty and how to file a claim is almost as intriguing as the price.

“We have created the first transparent warranty,” says Abernathy. “You can see where you bought the warranty, and you can follow your goods online when you have a claim.” To go with this, the company offers a five-day guarantee. According to the site, “Your item is repaired or you’re paid out within five days, or your service and the warranty are both free.”

And to judge from the ratings at Epinioins and NexTag.com, the company is doing something right.

OK, I’ll bite. I’m going to buy that warranty for my new phone. Of course, I hope never to have a claim but, if I do, I’ll let you know how it goes.

And here’s a question for you: Do you buy an extended warranty on your new computer, camera, and phone purchases? Why or why not?