Are All Warranties Equal?
Recently we had a customer tell us they were choosing another siding over the siding product we offered. The reason was simple - they had a better warranty.
People are inherently lazy and unfortunately this laziness can lead to misinformation. Take the media, both traditional and social, for example. How often do we see a catchy headline or title and form an opinion on the subject without fully reading the information provided, or even check to see if it is true. An example this would be a recent article on how housing starts were down from the previous month; the headline states "HOUSING MARKET DOWN 15%". The way it was written you would think that the housing market was crashing but upon further investigation it seems that this was a normal trend during that time of year. Also if you compared that month to the same month the year before you would discover that housing starts had increased on a month-to-month comparison. In fact year-to-date, housing starts were up significantly.
Warranties can be just as misleading.
"Buy our product we have a 50 year/ 25 year warranty. The competition only has a 50 year / 15 year warranty."
Based off of this information and thin information alone, I would choose what seems to be the stronger warranty. However, without naming the two products, let's do an actual comparison.
PRODUCT 1 (50 years on the Substrate / 25 years on the Finish)
If the product fails within 50 years of the date of installation Company X will do the following:
In the first 5 years they will pay to repair and replace the defective product or compensate the owner of the structure on which the product is installed for 100% of the purchase price of the defective product, exclusive of installation, labour and freight costs associated therewith.
After that the owner will be compensated for the purchase price of the defective product (no labour or other charges will be paid) on a prorated basis declining at a rate of 2.22% per year until the end of the 49th year.
Prorated...what does that mean. That means the value of the warranty decreases year after year until you are given a quarter, told to find a payphone and call someone who cares.
The 25 year portion of the warranty is very similar. The product is warranted against excessive fade (as defined by "a change in color greater than 5 delta E’s") up to $1.00 per square foot for the first 5 years. After that the warranty also is prorated anddrops by 15% from year 6 to the end of year 10. It then drops 1.5% per year until the end of the 24th year.
...and the warranty is non-transferable meaning if you sell the home the next homeowner doesn't get the warranty.
PRODUCT 2 (50 years on the Substrate / 15 years on the Finish)
If the product fails within 50 years of the date of installation Company Y will do the following:
In the first 5 years they will pay to repair and replace the defective product or compensate the owner of the structure on which the product is installed for 100% of the purchase price of the defective product. This includes labour and freight costs. The cost cannot exceed the original purchase price and cost to install.
The remaining 45 years they will pay to repair and replace the defective product or compensate the owner of the structure on which the product is installed for 100% of the purchase price of the defective product but no labour or freight.
This is a non-prorated warranty. The value of the warranty doesn't change for the cost of material and only the labour portion changes after the first 5 years.
The 15 year finish warrant is very similar in principle. The first 5 years include bother material and labour. the subsequent 10 years only include material but non-prorated. You are warranted against peeling, blistering and cracking as well as excessive fade (as defined by "a change in color greater than 3 delta E’s").
...and this warranty is transferable.
So, which of the two would you prefer now? On the surface Product 1 seems like the better warranty but once you dig into it you soon discover that this isn't really the case.
Other attention grabbing claims:
"Buy our product it has a NO FADE warranty."
We feel so strongly about the performance of our Product that we have improved our warranty to prove it! We are excited to announce that our Product Z Pre-finishing Limited Warranty is now a 15/30 Year No-Fade Warranty.
That's a pretty great claim - "NO FADE". Well, almost no fade as long as you define "no fade" in terms of it's allowed to fade but not over three delta units: Excess fade is defined by a change in colour greater than three delta E's. Wow, that sounds familiar. Maybe Company Y should have made the claim that they have a "NO FADE" warranty, even though it allows for some fading.
"Buy our product and receive a Lifetime Warranty."
...as long as you don't live longer than 20 years because that's what we consider a "Lifetime".
I'm not trying to beat up everyone's warranties. A lot of these tactics are pretty common and in fact a lot of the product I represent use them. The point I am trying to get across is that when you are about to make a significant purchase, like siding, a deck, a car etc. Do a little more reading then just the headline on the warranty. Make sure that the warranty suits your comfort level and is comparable to other products.