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6 Reasons Why You Should Never Purchase an Extended Warranty

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This article must have been written by a person who rents. Any homeowner who has to purchase appliances will tell you that in the span of a year at least one major home appliance will have issues. A year being the most factory warranty you get these days, the repairs then must be paid out of pocket. I wish I had bought the extended warranty on my "top of the line" Samsung dryer and Refrigerator as both broke in the 13th month of ownership. This was after doing research and finding that these product had great reliability and consumer satisfaction ratings. Incidentally, the cost of repairs was much higher than the extended warranty would have cost at the time of purchase.

K Dobkin of FL 9:28AM May 12, 2013

I agree with the vast majority of these comments.
Some misstatements:
1. The necessities of repairs is rare????
In the past 3 years we have lost 2 televisions, a microwave twice fixed before finally dying within 2 years, a washing machine fixed twice (glad whirlpool sent invitation for warranty extension the day after it crapped out), a refrigerator with a broken door requiring $200 in repairs and then it started freezing everything. See below about 2 laptops and don't get me started about over $3,000 in repairs to an 18 month old Chrysler minivan that were not covered because we had 38,000 miles on it. From 1 bad chip and several resulting fried parts. The computers in things today mean one tiny part can cost you thousands! I wish I had been suckered into the extended warranty on that van. And who can charge a car to their credit card?
2. You will lose money because these are depreciating assets.
What good is a dead asset? I have 3 junked laptops and a cell phone that would cost more to fix than buy a new one. In the past year, having learned my lesson, I have had my purchase price refunded on a $650 laptop and a $450 laptop, each going from year 2 to year 3. I took that money and bought a better laptop and a tablet from my $150 investment.
The manufacturers warranty is RARELY sufficient. Yes. I am sure there are some rip-off warranties out there and you should be careful, but Best Buy and Square Trade have bailed me out when LG, Westinghouse, Fridgidaire, Toshiba, Lenovo and Asus have failed me. Oh yeah, the hose broke on our 2 year old dishwasher, but fortunately a neighbor knew how to fix it.
My GE range top blew up after 2.5 years. $900.
American Express has helped me once, on a $150 iPod, but the only other item that qualified was the microwave, and they wanted us to drive it to a participating repair facility where it could take weeks to get back. Forget that.
I too used to say that extended warranties were sucker bets. But now, with many reputable companies offering decent rates, I will almost never turn one down for anything with a price over a few hundred dollars.

Get Real of MD 10:31PM March 30, 2013

My previous TV blew out a $500 chip after 13 months of purchasing it (one month after manufacturers warranty expired), my fridge started growling loud constantly just after my warranty expired, my washer started leaking (flooding) just after the warranty expired.
All of the above I did not have an extended warranty for. I will NEVER go without an extended warranty again!
I then bought a new blue ray player & the extended warranty with it & it ended up going bad & I got a new one because I had the extended warranty. Yes, it paid for itself!

Jerry of WA 1:57PM March 07, 2013

I purchased a 2 year warranty known as a Care Pack for my HP Pavilion p7-1235 for $69.99.I purchased the computer with a 1 year warranty on 09/12/12 and it at least gives me piece of mind.My question was it worth it to purchase the Care Pack for my desktop.
Sincerely,
Michael Lee

Michael Lee of CO 8:54PM March 01, 2013

I work for Home Depot and ran stores and been there for a while. Worked for Lowes and have friends that Manage Lowes, Best Buy and HH Gregg. This article is not accurate. I used to get 40 calls a week on appliances going bad right off the bat..and others indicate the same. I fair to say 70 percent of appliances have to be fixed or reparied in the first 3 years. Look at these company web sites and all the negative things on them...MOST are on appliances as GE ownes Maytag, Kenmore, Wirlpool and LG pays them to take care of their products warranties. NOT like it used to be and a lot of things go wrong on them and do frequently. MOST customers soon find in contract agreements with the appliance companies they have the RIGHT to go make 2 repairs on the SAME issue before a replacement will be granted. The average consumer does not want to deal with that...they want a NEW one. In addition, the margin on these appliances are LLOOOOWWW and really not worth selling. I, personally, wish my company would not sell them due to all the headaches. Yes...they make top lines sales look good, but with competition and margin...average profit is 8 percent...and they STILL are made overseas and junk. It is what it is and get the extended warranty and protect yourself and your investment. I have 4 kids and I have had to have my washer fixed 2 times (LG) and my Fridge once (GE) in the last year...and they are new.

Dont be fooled by people that dont know of GA 6:32PM February 22, 2013

This article came across as pretty shallow.
1. "Manufacturers warranty is sufficient..." - No, it's not after 365 days.
2. "Extended Warranty not effecctive..." - Of course there will be exclusions from coverage.
3. "Products Depreciate in Value..." - In home appliances, prices go up. $500 Washer now costs $675
4. "Repairs are Rare..." - Where do you get your information? And when you do need service, it's not cheap!
5. "Not cost effective..."??? - $1400 Stove - Just a diagnostic alone costs around $125. Most parts will cost over $100, plus labor of $225. Subtract the original $120 and you are left with a bill of $350.00 - The warranty only cost $149.95 (Paid for itself)
6. "Credit Cards" - Typically offer to reimburse you for service calls. But you have to do your own leg work.
Extended warranties can be a ripoff, but just read the exclusions. And pocketing the extra money won't help you when you need repairs or replacement.

David of CA 5:25PM February 11, 2013

I guess if you have 2 kids or less than this article might help you but we have 4. Every single extended warranty we have purchased has paid for itself time and time again. The quality of appliances had gone down hill in the last 15 years. Things that used to last forever simply don't. I will note that I purchase all of my extended warranties through www.squaretrade.com and almost always with a 20-30% discount.

Jan of GA 3:15PM January 21, 2013

They're for the likes of chumps and suckers!

Naldspar17 of TX 9:44PM January 10, 2013

Bob,
In the appliance service business for years and years. As we are a significant retail outlet we do not make money on warranities rather view it as a necessary evil of offsetting the costs of taking care of valued customers when their appliances break. We have 38 service techs on our salary every day not because appliances are working well, but quite the opposite. We actually loose significant money in service unlike the car industry where this is where they make money. It is a cost of building a brand rather than a profit center.
I agree no appliance/or dvd player is life threatening...However I have been on the end of many customer service calls where at that particular point when a refrigertor, washing machine, or stove is broken before a family holiday, birthday party or other...It might as well be.
If you look closesly at the appliance business there are very very few actual producers of products. It is an OEM and conglomerate machine. The problems become the idea of growing up with a refrigerator that lasts 25 years is not the case any longer. It is a designed obsolecence appliance world with 7.5 years being the average. The numbers are the numbers.
As a company we never believed or sold extended warranties as we saw very little value as many manufacturers covered the first 5 years in some form or capacity. In the last 7 years the manufacturing companies have merged and cut back on their coverage to one year only in most cases. The problem is the consumers have not been educated to this. Therefore you are faced with great long term valued customers feeling cheated when it breaks in the first couple years only to find out that they were now no longer covered. Hence our change to warranties being sold in our store as we were stuck with great loyal customer retention or considerable loss of profit absorbing the costs of the manufacturers failed committment to quaility products.
Ultimately look for a self servicing dealer that ideally actually escrows and backs the warranty itself. This way you don't deal with the red tape of a 3rd party servicer and have a written warranty on a piece of paper that is just that...paper... with nothing standing behind it.

Dmac of MA 10:49AM December 01, 2012

While the peace of mind may be worth it never forget that extended warranties are sold at a profit, that means statistically that they are a better bet for the seller than the buyer. This is true of course for all insurance, so the decision to buy is based somewhat on factors other than the cost of the policy, do you carry full auto insurance or just liability for instance? Would you choose to go without health care insurance? Does a broken DVD player threaten your life or livelihood?

Bob Palin of UT 11:41AM November 29, 2012