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Service contract renewal-Yay or Nay?

sinclairgraphics1

sinclairgraphics1

Sinclair Graphics & Installations
I'm sure this has been discussed at one point on here. HP is contacting me about renewing my service contract on my HP Latex 330. The monthly fee isn't bad but just trying to decide if it's really worth it. $160 per month for 2 years. I think I have a tech out 1-2 times a year, usually minor stuff. Just thought I'd throw it out there and see what other shops do with service contracts.
 
bob

bob

It's better to have two hands than one glove.
Service contracts are seldom, if ever, a good deal. If yours is priced at $160 per month then HP is betting that you won't do $160 per month worth of violence to your machine.

Just so you know way back in the day I worked for HP for many years and at one time was directly involved in designing and pricing service contracts. They made more money from these than they did from the product itself.
 
Billct2

Billct2

Active Member
I have had HP aqueous printers forever. On the old ones I would let the warranty expire and do the repairs myself. With the manuals and youtube tutorials it was possible to fix most anything, but it did take time, sometimes lots of time. On my newer ones I decided that I would rather make signs than fix printers so I re-upped when the warranties ran out. It has proved to be a good decision. Both machines have needed service a couple times so the warranty has paid for itself. Also I will now call about minor issues that before I may have ignored till they were a real problem.
 
J

Joe House

New Member
A service contract will allow you to budget your maintenance expenses target than let them surprise you all at once. This known, fixed expense is easier to incorporate into your calculations for shop time as well, allowing you to be more accurate when pricing your products.
Most service contracts also get you a faster response from the vendor as well and any troubleshooting with parts is on their done. Like Bill says, you'll call them for the minor things, before they become major things.
And things will happen, I guess if you'd rather deal with them hands on or make a phone call is your preference.
If you just look at the cost of parts and do the work yourself, then it doesn't make financial sense. But if you factor in reduced down time, plus time you can spend making signs rather than playing technician and posting help me posts pin signs 101, it makes more sense. You should also factor in a little pieces of mind that comes from knowing the vendor had your back.
Don't get me wrong, I support a diy mentality, and have helped many in here towards that end. But as to the question of whether or not to get a service contract, it should be thought of a little deeper than if the vendor makes money on the deal.
Another way to look at it would be that, most likely, a lot of your customers can source supplies and make their own signs, but it will likely lack in quality or not be nearly as cost effective if they (not really knowing what they're doing) try to do it themselves.

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Solventinkjet

Solventinkjet

DIY Printer Fixing Guide
As a tech I have seen my fair share of service contracts.The best service contracts will have regular maintenance built in. I wouldn't recommend purchasing one if it doesn't include at least a 6 month checkup and cleaning. I don't understand why companies don't offer this type of service contract. It's in the company's best interest to keep you up and running and not have to spend money on expensive parts because the machine was never maintained.
 
papabud

papabud

Lone Wolf
I have an HP 360. its now 3 years old. it came with a 1 year service contract. i never renewed it. i never had a reason to call service during that first year.
fast forward to recently. i just had to have service out for a maintenance service the machine was calling for because of the lifetime counter on parts. had to have a maintenance kit 3 preformed.
this was a cost of roughly $1100.00
so if i would of paid 150 a month for the last 2 years i would of spent $3600. so i saved $2500 by not having one.
this is so far the only bill i have had for the machine.
if your machine is full of problems or in a bad environment. i would suggest having one. but if its well maintained and clean. they will run nice for a long time.
 
T_K

T_K

New Member
For service contracts, I'm undecided for or against. I don't personally pay for the equipment I use, so I don't have a stake in it right now. But thinking about the stuff I do pay personally, like insurance, I usually ask myself three questions:

1) What's the worst that can happen, and do I have cash available to pay for it?
2) Can I cash flow this on a monthly basis, or create my own sinking fund, before I should need to pay out for this?
3) Will paying a monthly bill for the service contract/warranty/insurance bring me more peace of mind than not having it?

If I can cover the worst possible scenario with cash, I don't typically pay for the service. Typically, this isn't an option for me.
If I can work the maintenance into my own monthly budget, I could save some money in the long run. Also, if I don't expect issues for a couple years and can create a sinking fund to cover expenses in two years, I'm making interest on my money sitting in a bank account.
If I *could* financially handle the expenses, but having it "taken care of" helps me focus on other parts of my life, it's worth considering.

In the end, it all depends on how much risk I'm willing to take. I buy life insurance hoping that I'm throwing that money away. I don't like the payments, but I like the peace of mind that my wife and kid will be financially stable should I die unexpectedly. There's a lot of risk there I'm not willing to take. But I don't buy extended warranties on my computer or accessories. I put replacement costs into my monthly budget and hope it doesn't have a catastrophic failure before I've accrued enough to replace it. That is a risk I'm willing to take.
 
sinclairgraphics1

sinclairgraphics1

Sinclair Graphics & Installations
VanderJ said:
As a tech I have seen my fair share of service contracts.The best service contracts will have regular maintenance built in. I wouldn't recommend purchasing one if it doesn't include at least a 6 month checkup and cleaning. I don't understand why companies don't offer this type of service contract. It's in the company's best interest to keep you up and running and not have to spend money on expensive parts because the machine was never maintained.
Click to expand...
Yes this particular contract includes an inspection of the machine to make sure it's up to snuff. Normally that's $399 but they will wave that just for me.
 
J

Joe House

New Member
sinclairgraphics1 said:
Yes this particular contract includes an inspection of the machine to make sure it's up to snuff. Normally that's $399 but they will wave that just for me.
Click to expand...
I think Vander was referring to regular preventative maintenance visits by a tech. I whole heartedly agree with that from a service provider's point of view.
It sounds like their giving you a free qualification inspection to prove that you don't have any pre-existing conditions.

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