5 Reasons Why Expired Warranties Are Costing You More Than You Think

Imagine you work as an IT manager at an enterprise-level firm. A software engineer’s laptop breaks down suddenly while they are working on a product launch. They turn to you to find out what the problem is. 

You check the device’s serial number only to discover that the manufacturer’s warranty expired two months ago, and now the laptop requires repair and maintenance; no extended coverage was purchased either. 

You are held accountable for the additional cost, while you are left with only a couple of options:

• Repair delay and cost: The out-of-pocket repair cost for the motherboard failure is quoted at $600, and the repair is expected to take 10–14 business days due to parts availability.
• Unplanned budget hit: The IT team is forced to expedite the purchase of a new laptop for $1,400 to minimize downtime, eating into funds allocated for upcoming network upgrades.
• Reputational risk: The delayed launch triggers employee dissatisfaction, forcing the marketing team to scramble with revised communication plans.

An operational hurdle as simple as this turned into a cross-functional issue due to a lack of visibility into the device expiration dates. 

Let’s help you understand how to avoid a similar situation and overcome technological inefficiencies through strategic planning.

The true cost of expired warranties 

Warranty expiration comes with its risks and hurdles. It’s not a one-off thing, but rather remains a consistent issue if not resolved immediately, creating a domino effect. One of the reasons why expired warranties occur is the over-reliance on manual and fragmented systems that lead to data silos. 

Information about IT devices and their warranties exists in disparate systems with no means to reconcile the data. This way, companies only take action when a device breaks down unexpectedly. 

Now the question arises: What are the actual costs associated with these breakdowns? 

1. Unplanned costs from emergency purchases

When a warranty expires without any forthcoming signs, the chances of unexpected spending increase significantly. These emergency purchases cost more than regular purchases as vendors are expected to provide the equipment on demand. 

The overall impact falls on the budget, however, which increases more than expected, pushing you as an IT manager to justify to the leadership why a specific breakdown occurred. 

Spending on these emergency purchases is just the tip of the iceberg. The ripple effect also impacts other operations. The end user may experience productivity delays while the device is being sent for repair or replacement. 

A software engineer unable to code, a content writer unable to write, and a sales rep missing virtual meetings add up to lost productivity and delays, and even lost revenue for the company. 

Companies might not have enough resources to make such frequent purchases, potentially disrupting IT operations. 

Result: Out-of-warranty = Out of budget repair expense

2. The constant loop of repair and maintenance

When organizations do not frequently invest in equipment repair, the IT team ends up spending more time fixing issues in a “reactive mode” rather than focusing on handling them strategically.

This happens when warranties are not tracked on time, and devices are not sent for maintenance under the free coverage period. This holds for aging IT equipment and those that remain untracked. 

Inability to track equipment’s age and its warranty keeps adding to costs. 

Expired warranties also necessitate emergency support, and budget adjustments necessitate IT’s ability to plan and forecast effectively. With the IT team at the forefront, their ability to handle such situations well becomes questionable, impacting the leadership’s confidence in the team. 

The team has to stay on their toes to ensure timely maintenance that also doesn’t cost the company a fortune. Therefore, managing aging equipment without warranty tracking becomes a real concern with the fear of reactive maintenance looming over the team. 

Result:  Equipment aging without warranty tracking = More reactive maintenance

3. Increased software costs 

Software assets, such as SaaS tools, have software licenses that can lapse easily if deadlines are missed. If a SaaS license expires, costs multiply manifold, as a tool may serve as the backbone of the organization; for instance, CRM tools and integrations with other technical platforms. 

If their license expires:

• It can break downstream processes or integrations with other apps.
• You might become non-compliant with security or privacy standards (e.g., SOC 2, GDPR) if a key tool loses audit logs or encryption access.

With limited visibility into software licenses, IT teams will be unable to anticipate SaaS renewals and may end up spending more on unplanned renewals. These unplanned renewals inflate the Total Cost of Ownership, as last-minute renewals typically cost more than those made through a detailed analysis.

This is the software equivalent of “downtime due to expired warranty” in hardware.

Result: Missed software licenses = unplanned costs and security risks 

4. Increased total cost of ownership (TCO)

TCO does not only include the initial purchase cost. It also includes the costs associated with its upkeep and maintenance, emergency replacements, repair costs, and depreciation. 

Most physical IT equipment—including laptops and servers—comes with warranties that cover their repair and maintenance for at least one year. However, as a warranty expires, the cost of bringing equipment back to work increases, as immediate repairs often cost more than anticipated. 

Third-party service providers like Best Buy usually charge premium rates for diagnosis and repair, which can also exceed the actual cost of the equipment. For example, replacing a laptop battery or motherboard without warranty coverage can cost as much as 40–60% of the original device price

TCO also includes depreciation cost, especially when assets are no longer of use and need to be disposed of before their full depreciation. If the warranty has expired and the device breaks in year 2 of a 4-year depreciation schedule, it may be removed from service early. 

The company has to write off the remaining value of that asset, even though the financial model expected it to last longer.

Result: Expired warranties = Higher chances of early equipment breakdown

5. Increased equipment downtime 

Missed refresh cycles are one of the primary reasons why equipment might stop working on site. For instance, warranties are usually valid till the standard 3-year mark—the same as refresh cycles. 

Suppose your organization has a policy to provide new IT devices to employees after every three years. In that case, not recording the date of issuance of their current device or tracking warranty dates can cause delays in device replacement. 

This can also increase the chances of equipment downtime because the device will no longer be eligible for a free repair after the warranty period has lapsed. Not getting an IT device repaired through its valid warranty not only affects an asset’s lifecycle but also forces the IT team to find workarounds that waste their time.

Result: Missed refresh cycles = Increase in performance bottlenecks

Ways to handle expiring IT warranties

Missed IT warranties or approaching deadlines can potentially impact IT workflows. The Data Center Reliability Matrix is a standard framework used by IT companies to assess the reliability and availability of their data center’s infrastructure. 

This means that the data center, which could be your IT infrastructure, needs to be available and working 99.671% of the time, and even a small amount of downtime can cost you a lot. Expired warranties, if not rigorously tracked, can impact your data center’s and, similarly, your devices’ uptime. 

Let’s explore ways to track warranties seamlessly and avoid IT device downtime:

1. Log warranties at the time of procurement

If you use an IT asset management system, the process of tagging warranties right at the time a device is procured becomes more streamlined. This can be done by simply integrating with the service account of your device provider, such as Dell, Lenovo, and Apple. 

Your centralized IT asset management platform—such as EZO AssetSonar—will automatically fetch warranty data and populate your account with the start and end dates of the warranty based on your device’s serial number. 

This way you can:

• Gain real-time visibility into the state of the assets provided by that specific vendor
• Know at all times a device’s warranty period and schedule renewals
• Stay updated with the approaching warranty deadlines 

The status or tag of a warranty will change automatically based on when it was logged into the system. Expired warranties are tagged as “Expired,” whereas warranties that are still ongoing will be marked “Active.” 

This level of visibility into your warranty ensures that you never miss a warranty deadline and can avail yourself of free repairs under your warranty plan. 

2. Set up warranty expiry alerts in your ITAM tool

Most modern ITAM tools enable you to set up alerts for expiry dates of warranties, so you stay updated about a warranty’s expiry. These alerts can be set to occur at intervals of 30, 60, or 90 days, so the system will trigger alerts after the number of days you define. These alerts will give ample time to your IT team to:

• Evaluate a device’s condition
• Decide whether to repair, extend the warranty, or replace the asset
• Initiate the refresh cycle in alignment with budget and procurement schedules
• Communicate with vendors for warranty extensions or coverage options

Staying updated enables you to avoid paying extra and always know if a warranty is about to expire, so a corrective measure can be initiated. 

Imagine a company laptop used by your software engineer is due for warranty expiration in 45 days. Your ITAM tool sends a notification at the 60-day mark. The IT team assesses the laptop, finds minor hardware issues, and uses the still-valid warranty to repair it, saving hundreds of dollars and preventing disruption to a key business function. 

Isn’t that convenient? 

3. Build a threat matrix

IT teams often build a threat matrix to assess risks associated with expiring warranties. It helps IT teams assess how an expiring warranty can impact their operations in the long run. 

Here’s how you can easily build a threat matrix:

1. Build an in-depth IT asset repository that centralizes both hardware and software data, along with their warranty details.
2. Determine, based on past numbers of similar devices, how frequently a device is likely to break down. Mark the thresholds as high, medium, and low depending on a device’s usage, wear and tear, and the number of times it has been used.
3. Assess what impact a failing device has on the overall operations to assess the risk level.

You can easily manage warranties and ensure quality IT asset lifecycle management through workflow-based automations. You can define how a change in warranty status will affect the way you manage your device; for instance, automatically change a device’s warranty to “Active” as soon as it is procured and recorded in your ITAM tool. 

Building a threat matrix is a proactive approach toward streamlining warranty management and ensuring that your devices are well accounted for. 

You can use the attached Threat Matrix Questionnaire to assess where your IT devices stand in terms of warranty and whether you need to take action. 

Note: This threat matrix has been generated with the help of Canva AI.

4. Automate warranty management

You can easily manage warranties and ensure quality IT asset lifecycle management through workflow-based automations. You can define how a change in warranty status will affect the way you manage your device; for instance, automatically change a device’s warranty to “Active” as soon as it is procured and recorded in your ITAM tool. 

You can also automatically create a field to populate relevant warranty information. You can adjust the warranty days, i.e., increase or decrease the warranty period if a particular action is taken or an asset with a specific property is recorded.

5. Build data-backed dashboards

Building visually-rich and statistical dashboards that showcase warranty data is helpful for both the IT team and relevant stakeholders, with clear visibility into your warranties. You can pull data by creating customized reports, particularly for warranties, or use pre-built reports to better assess what warranties are nearing expiration and which ones are not. 

Dashboards consolidate multiple data points—such as warranty status, expiry dates, asset type, vendor, and location—into a single, central view. This ensures that:

• IT teams know which devices need attention
• Finance teams understand upcoming replacement costs
• Procurement teams can plan renewals or negotiations in advance

You can create elaborate graphs and charts to present data in a digestible format. Populating your dashboard with this data will enable you to plan more effectively and avoid missing critical details. 

For example, your ITAM dashboard might indicate that 15 Dell laptops will be out of warranty in 60 days. You can check those devices in the system and estimate the replacement costs. This lets IT and finance proactively schedule a refresh round and avoid downtime or emergency spending.

Don’t let expirations expire your budget

Expiring warranties are an issue that must be addressed at all costs. Warranties past their dates easily translate into increased costs, operational hassle, and economic device repair in case of any issue. 

Missed warranties constitute a significant mistake in IT lifecycle management as they impact your budgets in unimaginable ways. 

Think of this: Would you rather spend a thousand dollars on getting an employee’s MacBook fixed or utilize its warranty for free repairs? However, if you purchase a device and don’t record its warranty details in an ITAM tool, the chances of getting it fixed under Apple’s warranty are slim. 

As organizations expand and develop complex workflows, it becomes increasingly difficult to ensure effective warranty management without an ITAM tool. Centralize your warranty data today, specify it to each device, and create a stronger IT ecosystem.

Frequently asked questions (FAQs)

1. What happens when an IT asset is out of warranty?

Once an IT asset goes out of warranty, the responsibility to repair the IT asset falls entirely on the company. Vendor support is available, but it can cost your company considerable money. 

2. How can I effectively track warranty expiration dates? 

You can log a warranty into an ITAM tool as soon as you purchase an IT device. Once recorded, you can periodically track it to assess whether it’s nearing the expiration date. You can also receive alerts, set at intervals, to stay updated on the most recent status of your warranty. 

3. How often should companies review their warranty expiration dates? 

Ideally, quarterly, or set automated alerts for upcoming expirations 30/60/90 days in advance through your ITAM tool.

4. What is the impact of expired software licenses?

Expired software licenses can result in compliance issues, data security risks, broken integrations, and higher renewal costs. It’s important to track and renew licenses before they expire.

5. How do I avoid costly downtime due to expired warranties?

Ensure that you track warranties for all devices in your ITAM system, set up expiration alerts, and take action (repair, extend warranty, or replace) before the warranty expires. 

6. What should I do if I don’t have an ITAM system?

If you don’t have an ITAM system, start by creating a manual tracking system for warranties, monitor expiration dates closely, and consider investing in an ITAM platform for more efficient management.