Is it ever worth buying the Extended Warranty?

[NuclearNed]

I would never buy an extended warranty.

I worked at Sears for ~7 years. In all that time, I saw lots of people buy them, but very few people who actually benefitted. Generally, if something is going to break, it usually happens pretty soon after the purchase (i.e. within the warranty period).

 

[waggy]

i get them if the price is not to bad. i purchased a $2k tV. the extended warranty was $200. so yeah i think it was fair. if it was $500+ (wich i hear people getting charged) heck no.

also if i am buying a $200 DVD player no way in hell am i getting a $50-70 warranty. if it goes out the odds are it will be in the 1 year warranty it has or a few years down the line where something better is out.

 

[Capt Caveman]

Originally posted by: Marlin1975

Originally posted by: Capt Caveman
Marlin - that's what I'm doing. I'm pricematching against Home Depot to get $110 off each appliance and then getting the extra 15% off and free delivery.

And yes they will give you both. On Black Friday, I price matched a LCD TV and got a 10% cash back mail in rebate(same as the current appliance rebate). I just got an email from Sears yesterday that my rebate was approved and being processed.

edit - the reviews/ratings on the product have been very good compared to other brands. However, these models haven't been around that long so long-term, it's hard to tell of their reliability.

Check out bestbuy as well depending on your model. I foudn the fridge at BB cheaper so i will use them to pricematch.

Also the free shipping is ONLY if you pay with a sears card. the rebate is for any payment.

Thanks, I didn't think about checking BB. Their prices are the same as Home Depot but the washer I'm interested had 21 5-star reviews which was nice to see.

Also, note the Sears sales ends 1/5.

 

[iamwiz82]

Stores price the warranty so that they make money in the long run, so it makes sense not to buy them, IMHO. I use my AMEX to double mfg. warranty and that is it.

 

[Alistar7]

Do a thorough review on the model you are looking to buy. I would also suggest using a CC that doubles the manufacturer's warranty.

 

[Miramonti]

Extended warranties are insurance. Sure its profitable to sell the insurance, but may be well worth it to buy it for expensive items and/or risky items (low reliability products, new technologies, items with moving parts that are expensive to fix.) Make sure its from a reputable retailer tho that you know will be around for a long time.

I'd definitely go with one for the front load washer. Even the more durable commercial ones that have been around for a long time sometimes need semi-frequent repairs.

 

[Xavier434]

Originally posted by: bsobel

Originally posted by: BoomerD
Does the equipment always break down during that period? Nope, but when it does, the repair cost usually exceeds the warranty cost, so I guess it's a gamble...

Yes, and if you put aside the cost of warranties for everything you bought you'd have the cache to pay for that repair and the profit that you would have paid for the plan in your pocket and not there's. The only reason these are popular is people dont actually put the money they would have saved into savings, they spend it. So, when there is a problem, it becomes a cash crunch for them.

Bill

You are right in some sense but there are a lot of dependencies to this idea:

1. This is under the assumption that the buyer purchases enough products which even offer extended warranties. If you only buy one or two expensive products which even offer an extension over the course of 3-5 years then the odds of the math working out in your favor are less since your logic is based on ratio of the products which break to those that last through the warranty period.

2. You are also assuming that people are financially responsible enough to let that money sit in the bank for that long which i realize is fully under their control but let's face it...most people are not that good at it.

3. The logic also revolves a lot around the cost to repair a product and that the cost is minimal in comparison to purchasing a new replacement. This is not always the case. For example, it is not impossible for a $3000 HDTV to break and cost $1000 to repair after standard warranty is expired. I realize those scenarios are less likely than others but they still happen sometimes. If you don't like that example then use cars as another.

4. Lastly, extended warranties are not just there to minimize the amount of money you spend in order to maintain a particular appliance or device. They are also there to prevent unexpected expenses whether you have the savings for it or not. Personally, I am usually willing to fork over a little extra cash for that peace of mind rather than store it in savings which I may need to tap into should other emergencies come up. Normally, it isn't that much extra but it depends on the product. For some people, the peace of mind and convenience is just worth it.

 

[SuperNaruto]

I bought lg front loader, washer & dryer.. total was around 2200, the 4 year extended warranty was only 83 a piece from home depot which was ge warranty..

For 20 something bucks a year... it'll be cover.. i probably wont use it but from all the horror stories that people did not buy extended warranty and a huge repair bill.. i think i can afford 20 bucks a year

 

[BoomerD]

The circuit board went haywire in our Kenmore washer 2 years ago. (still worked, but the cycles were whacky) The tech came out, troubleshot the problem, found that the rubber seal on the washer tub was also going bad. Ordered the parts, came back and installed the new parts. The bill for that was just over $500. My cost...$0. Made the $100 we paid for the warranty a good deal. (this is a Kenmore version of the infamous Calypso...which has been rampant with breakdowns...we haven't had any of the major problems that would have qualified us to be in the class-action suit...but since we weren't out of pocket, we really didin't need to be)

 

[Miramonti]

Originally posted by: SuperNaruto
I bought lg front loader, washer & dryer.. total was around 2200, the 4 year extended warranty was only 83 a piece from home depot which was ge warranty..

For 20 something bucks a year... it'll be cover.. i probably wont use it but from all the horror stories that people did not buy extended warranty and a huge repair bill.. i think i can afford 20 bucks a year

Now that's an example of a no-brainer. 3.5% of a very expensive 'wear-susceptible' purchase for coverage over an additional 4 years is outstanding. As long as there is no ridiculous 'fine print', that's a great financial decision imo.

For that matter, perhaps cost and terms of extended warranties as a rule should be included in the overall decision on whether or not and where to buy a particular purchase like this, since they seem to vary in cost quite a bit.

 

[bsobel]

1. This is under the assumption that the buyer purchases enough products which even offer extended warranties. If you only buy one or two expensive products which even offer an extension over the course of 3-5 years then the odds of the math working out in your favor are less since your logic is based on ratio of the products which break to those that last through the warranty period.

Agreed, but I believe you'll find most people do. But if he was buying only this washer/dryer and definately nothing else for the warranty period the math is different.

2. You are also assuming that people are financially responsible enough to let that money sit in the bank for that long which i realize is fully under their control but let's face it...most people are not that good at it.

Also agreed. I just point it out for those who can be responsible enough to do it, its always better for the money to be in your pocket than theirs.

3. The logic also revolves a lot around the cost to repair a product and that the cost is minimal in comparison to purchasing a new replacement. This is not always the case. For example, it is not impossible for a $3000 HDTV to break and cost $1000 to repair after standard warranty is expired. I realize those scenarios are less likely than others but they still happen sometimes. If you don't like that example then use cars as another.

Also agreed, its a cost averaging thing (see point 1). If you buy enough products, you basically become your own insurance company vs paying someone else for it.

4. Lastly, extended warranties are not just there to minimize the amount of money you spend in order to maintain a particular appliance or device. They are also there to prevent unexpected expenses whether you have the savings for it or not. Personally, I am usually willing to fork over a little extra cash for that peace of mind rather than store it in savings which I may need to tap into should other emergencies come up. Normally, it isn't that much extra but it depends on the product. For some people, the peace of mind and convenience is just worth it.

This one I disagree with, especially the 'have the savings for it or not' statement. Remember, that savings was from not buying the warranty in the first place. Your no worse off spending that savings to repair the item. People do weird things with money and put it into different buckets and assign different values (your paycheck is your base income, but bonsus are 'mad money', etc). This is just another example of that. The same amount of money moves, you just control the timing if you manage savings yourself. Of course, if your like most people (see #2) they will never do it. But if one or two people 'get it' and save some money, I think thats a good start.

Cheers,
Bill

 

[lokiju]

Consumer Reports recommends against pretty much all extended warranties with the exception of Mac's and Rear Projection TV's due to their bulbs.

I tend to agree with them but do wish I had gotten one for my digital camera since I broke the LCD on it a few weeks after getting it and to buy just the replacement LCD and replace it myself, it cost me half of what I paid for the new camera.

http://www.macobserver.com/article/2006/11/16.9.shtml

 

[bsobel]

Originally posted by: lokiju
Consumer Reports recommends against pretty much all extended warranties with the exception of Mac's and Rear Projection TV's due to their bulbs.

I tend to agree with them but do wish I had gotten one for my digital camera since I broke the LCD on it a few weeks after getting it and to buy just the replacement LCD and replace it myself, it cost me half of what I paid for the new camera.

http://www.macobserver.com/article/2006/11/16.9.shtml

Why it doesnt help now, look at places like Costco and others known for their after sales support, better to pay closer to average price than wholesale + warranty.

 

[Xavier434]

Originally posted by: bsobel

4. Lastly, extended warranties are not just there to minimize the amount of money you spend in order to maintain a particular appliance or device. They are also there to prevent unexpected expenses whether you have the savings for it or not. Personally, I am usually willing to fork over a little extra cash for that peace of mind rather than store it in savings which I may need to tap into should other emergencies come up. Normally, it isn't that much extra but it depends on the product. For some people, the peace of mind and convenience is just worth it.

This one I disagree with, especially the 'have the savings for it or not' statement. Remember, that savings was from not buying the warranty in the first place. Your no worse off spending that savings to repair the item. People do weird things with money and put it into different buckets and assign different values (your paycheck is your base income, but bonsus are 'mad money', etc). This is just another example of that. The same amount of money moves, you just control the timing if you manage savings yourself. Of course, if your like most people (see #2) they will never do it. But if one or two people 'get it' and save some money, I think thats a good start.

Cheers,
Bill

That's a valid point for sure. #4 is much more based on an individual's opinion rather than math. For example, I like to have some money in savings for a rainy day. However, I do not like to rely on those saving for those reasons because it still makes me nervous. I include the extended warranty as part of the cost rather than it being optional so that I can simply buy it and forget about it without having to worry. Now, is that always going to be the most money efficient choice? No. Will I make that choice with every product I buy? No. However, it is my best option for convenience and to keep peace of mind when whatever I buy glitches occasionally. I can't keep that peace of mind even if I have money in savings dedicated to it, but I can with a warranty. I know that it's mind over matter in a lot of cases and worrying about those "big" repairs that I mentioned in #3 are not very necessary but I can't help it. So, in the end I am buying myself a stress reliever more than I am buying insurance which is worth the extra dollars to me and I have cashed in on in the past more often than most. I don't know if that makes me lucky or not lol.

 

[Chryso]

If you are looking for the wise thing they don't buy one of those overpriced front loading washers.
The old fashioned top loading models that run about $350 get clothes clean just fine.

 

[thepd7]

Originally posted by: Anubis

Originally posted by: homercles337
Extended warranties are *always* a rip off for the consumer. If you feel like tipping your salesman $150 then by all means do so, because that is what you are doing with the extended warranty.

no they arnt,

my rents got the extended warrenty when they had their new furnaceputin/fixed, they just had to have work done cause something buggered up, because of the warrenty they only paied 200$ for the part and saved the 1000$ or so on labor and such

Just because it helped one time doesn't mean it's not a rip off to the customer when you factor in fail rates.

If there is a 3% chance your item will break but you pay 25% of the purchase price is that worth it? hell no.

 

[bsobel]

That's a valid point for sure. #4 is much more based on an individual's opinion rather than math. For example, I like to have some money in savings for a rainy day. However, I do not like to rely on those saving for those reasons because it still makes me nervous. I include the extended warranty as part of the cost rather than it being optional so that I can simply buy it and forget about it without having to worry. Now, is that always going to be the most money efficient choice? No. Will I make that choice with every product I buy? No. However, it is my best option for convenience and to keep peace of mind when whatever I buy glitches occasionally. I can't keep that peace of mind even if I have money in savings dedicated to it, but I can with a warranty. I know that it's mind over matter in a lot of cases and worrying about those "big" repairs that I mentioned in #3 are not very necessary but I can't help it. So, in the end I am buying myself a stress reliever more than I am buying insurance which is worth the extra dollars to me and I have cashed in on in the past more often than most. I don't know if that makes me lucky or not lol.

Nothing to disagree with, each person has to put a value on that comfort value. I tend to look at things from a pretty straightforward spreasheet view (is x less than y, then x is better) but I do realize many people do pay for peice of mind.

 

[Vette73]

Originally posted by: Chryso
If you are looking for the wise thing they don't buy one of those overpriced front loading washers.
The old fashioned top loading models that run about $350 get clothes clean just fine.

Front loaders have been shown to clean clothes better, use less water, and use less power. So in the end it pays foritself and some by reduction in water and power. And your clothes are handled better.

So tell me how it is overpriced again?

 

[BurnItDwn]

For MOST items, extended warranties are only worth buying if you are capable of making the item "break" without voiding the warranty right before the extended warranty ends and if they discontinue the model and wind up having to give you an upgrade.

However, intentionally damaging something just so that you can replace it with something new is obviously very unethical and shady.

Thus, in general people who buy extended warranties are either criminals or stupid.
(OK, most of them probably just want to get the salesperson to STFU or have "good idea at the time" momments.)

 

[GoPackGo]

Back in the day, when Best Buy sold a 4-year warranty on computer monitor AND printer for 99 dollars, that was a good deal.

 

[Excelsior]

Originally posted by: Anubis

Originally posted by: homercles337
Extended warranties are *always* a rip off for the consumer. If you feel like tipping your salesman $150 then by all means do so, because that is what you are doing with the extended warranty.

no they arnt,

my rents got the extended warrenty when they had their new furnaceputin/fixed, they just had to have work done cause something buggered up, because of the warrenty they only paied 200$ for the part and saved the 1000$ or so on labor and such

I wish I got that kind of money for selling EWs. I only get 5%. Hardly enough incentive...

 

[randym431]

The ARE for esprcially washer and dryers!!!!
I got a 3 year on my front loader and used it twice.
One time they had to replace the whole cage thingy and cost me zero.

I just renewed for another 3 years and expect to use it at least once.
Front loaders are very nice, but very picky to leaving things in pockets.
Can jam up the whole system.
Front loaders are great, save a lot on water and energy cost, and very quiet.
But... get the warranty!

 

[jagec]

Washers/dryers, microwaves, vacuum cleaners, and cars are almost always not worth buying new. The used market is just too good to pass up.

 

[RossMAN]

When I bought my gold plated Monster HDMI cables from Best Buy for $129 (on sale), I opted for the 4 year warranty at $49.95

 

[Sluggo]

We generally never buy them, but did buy one for our Samsung DLP TV we bought last September. The BB warranty gives you one bulb change with their plan, so I figured at $400 for 4 years, the bulb change made it almost worth the cost.

Well the TV took a dump a week or so ago, and we are stuck waiting on parts, they are having to replace one of the circuit boards inside, and they arent even sure if that will fix it. They may still have to order more parts. I figure without the warranty, we would be taking at least a $400-500 hit for this repair, so I am glad we bought the warranty.