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Manufacturers who would like to extend their warranty, more from a product `attractiveness` angle will offer a prorated warranty. It's another way of saying that they'll cover the warranty 100% for a short period, but as the product ages, they'll assume less and less responsibility for the quality of their product over time and you, the consumer will start to have to bear a greater portion of the repair bill as time passes.

Prorated warranties can range from as short as a year to three years on average. For instance, the manufacturer will cover 100% of the costs of repair (usually minus shipping) for a period of maybe one year. Then for the next two years, the portion that they'll cover becomes less and less until by the end of the third year, you will bear 100% of the repair costs.

They usually do this based on the expected value of the unit projected over a period of time, and usually based on past history from previous models and past performance.

To create a prorated warranty for an item is an enticement to purchase, giving the consumer a sense of security from the manufacturer. It's also a good way to capitalize on an extended warranty plan from the retailer because they know that for the same reason, they will; be reimbursed a portion of their costs should the consumer need to use the extended warranty plan.

The only problem with the extended warranty plan is that it almost always runs concurrent with the manufacturer's warranty, providing full reimbursement for the manufacturer's 100% warranty period and the retailer can pocket that money as pure profit. Not so good for the consumer, but plenty lucrative for the extended warranty companies.

So if you want to create a prorated warranty you have to take into consideration the quality of your product (how long will it last before repairs are expected), what your product is and how it'll be used as well as the expected repair costs over say, a one to three year period.

Some manufacturers will cover items 100% for 90 days and then prorate for the first full year. Others will extend the period up to three years and some, even longer.

Hope this Helps,


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โˆ™ 2007-08-30 19:08:26
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Q: How do you create a prorated warranty?
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If the unit has a "full" warranty, then 100% is covered. If the unit has a "prorated" warranty, then 8% is covered (1/12).

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How would a person calculate a prorated contract?

Calculate the amount of money you make per day, then multiply it with the amount of workdays you have completed and that should give you the prorated contract.

What recourse do you have to collect the full amount when an extended warranty was put on a contract for a 1981 vehicle without your knowledge and the refund was prorated after you requested a refund?

Suggest you contact your local Better Business Bureau (BBB) and let them handle it. It's free and they'll know just what to do.

What does prorated mean?

For the sake of argument, let us say you are talking paying rent. If rent is $100 a month, and you move in half way into the month, the prorated payment would be half the rent - or $50. Does that answer your question ?

What does prorated means?

For the sake of argument, let us say you are talking paying rent. If rent is $100 a month, and you move in half way into the month, the prorated payment would be half the rent - or $50. Does that answer your question ?

Should depreciation on a 40 year shingle be the same as a 20 year shingle in OKlahoma on a roof 6 years old?

Is this to calculate the value of the roof for a warranty replacement? Generally a roof warranty is only for the materials and is prorated based on the warranty period of the roof and the time elapsed. For a 20 year roof the depreciation would be 6/20 or 30% of the original material price of the shingles. For a 40 year roof it would be 6/40 or 15% of the replacement cost of the shingles. Read the warranty that came with your shingles to get the details of how it would be applied in your case. Local laws may also change how the warranty is applied.

What do you think about the sleep number beds?

great for about two years then they start to fall apart, ironically right when your 20 year warranty begins to be prorated. warranty only covers the first two year 100%. too many problems, bad pumps, leaking air chambers, and start to roll to the middle each of your numbers are drastically different. I would stick to a good uality innerspring personally.

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