Should I add an extended service plan (ESP), also known informally as an extended warranty, with an equipment purchase?

This is a question many of us now face when adding new equipment to our business, as many large manufacturers offer this premium option.

So, what is an ESP? It is an agreement that covers the cost of equipment repairs for a set period of time. This plan can be in addition to, replacing, or in conjunction with, the original product’s factory warranty and provide print shops with peace of mind beyond the device’s limited warranty to keep equipment running like new.

What is Covered in an ESP?

An ESP can come in many forms, spanning from total product and parts coverage to partial coverage, with some plans covering all parts that could be needed for a repair, and some only offering a reduced price on parts. Before purchasing an ESP, consider your needs — would you need total coverage, or would you be willing to pay a little out of pocket and receive partial coverage? Are there some minor repairs you’re willing to do, and will you be trained by the manufacturer to carry out those repairs?

Before purchasing a plan, read the agreement that is offered and understand the details to ensure it’s a service plan you are comfortable with. It’s important to keep in mind that most OEM manufacturers do provide ESPs that include coverage of the unit with genuine OEM parts, specially trained service technicians familiar with the unit, and remote support.

We all know that at any given time equipment is going to break, and it usually happens at the most inopportune time. Having an ESP in place gives peace of mind to know that equipment will be repaired in a timely manner with little or no unforeseen cost.

In most cases, ESPs are sold at a cost that is much less than what it would cost to repair the equipment out of pocket. It’s easy to do a cost benefit of an ESP — simply ask the equipment seller how much the most expensive part on the machine costs and the cost to replace and repair it. If the repair is around the same cost or more than the ESP, then you have your answer.

Repair Response

Repair response time is always a concern as an inoperable piece of equipment generates no revenue. This should be a main focus when researching ESP options. Always ask what the average response time is in the event a technician must come on site for a repair.

Additionally, ask about the availability of repair parts. Larger companies usually have a sizable inventory of repair parts, and it’s better for you if the company that manufactures the machine also makes the parts. When comparing ESP agreements, remember it’s only as good as the company that stands behind it.

Limitations

There can be limitations on ESPs. For example, if the machine has been neglected, poorly maintained, or misused, the ESP provider can refuse service. Also, regular maintenance and appearance items, like machine covers, are not usually covered. A good ESP agreement will clearly detail what is and is not covered. And remember, get the service agreement in writing.

You have insurance on your car and even on your business, so why not insure your equipment against a devastating break down or the threat of costly repairs? The proper ESP can give peace of mind for not having to worry about the possibility of a future problem or a major repair issue with your equipment.

Conclusion

An ESP protects your equipment investment and your business from unexpected and untimely repair costs now and in the future. These agreements can usually be purchased on a yearly basis or at other intervals of time.

Some machine manufacturers have so much confidence in the durability of their products that they offer ESPs for up to five years of coverage, mirroring equipment depreciation schedules. Many customers choose this total option when leasing or financing equipment. Some equipment companies even offer an ESP on their brand of used equipment once it is brought up to a certain operation level. A good ESP helps you to manage costs and set your equipment budget.

If you’re still not convinced that an ESP is for you, ask yourself one question: If I don’t have an ESP on my equipment, who will repair it and how much will it cost for that repair?