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6 Reasons Why You Should Never Purchase an Extended Warranty

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I couldn't disagree more with comments made above. 28% of all home appliances fail within the 1st year of warranty. Most appliances today only have a 1 year full parts and labor warranty and different from times past there are very few extended parts only coverage. In the first 5 years of ownership that number jumps to almost 51%. The average service call today is 199 for labor and parts addtional with a completed repair or roughly 264.00. If an extended warranty costs on average 200.00 for 5 years of coverage seems like a safe bet. Third party warranties never make sense but if the dealer you bought appliances from are self servicing. In an economy where everything is being outsourced and quality control and value engineering are at an all time high. A little piece of mind seems like a good decision.

Dmac of MA 1:10PM November 26, 2012

I agree with everything but a lap top. Lap tops have always gone out on me every few years... LT over heat. I've always got my $$ worth

lynn of AK 7:06AM November 23, 2012

I do not agree with this article, sure, some items wouldn't benefit from and extended warranty, however, Companies like Squaretrade offer Accidental Damage from Handling warranties that cover drops and spills for 10%-15% of the items purchase price. They also cover shipping the damaged product and will handle your claim almost immediately.

Ernesto of CA 2:50PM November 07, 2012

I purchased a laptop today, along with 2 year extended warranty. Do you know i fI wouldbe able to cancel the warranty?

Shirley of FL 11:00PM October 27, 2012

Agree with the advice you've given above. Definitely read the fine print before making your decision.
Remember: you can negotiate a better price if you do want to buy and extended warranty.
We've got some additional tips on extended warranties too:
http://www.handlemycomplaint.com.au/free_insider_tips/extended_warranties.php

Jo Ucukalo 10:52PM October 14, 2012

I bought a Jeep Cherokee...it had a problem with the axel. It was repaired to the tune of $2400...because of the warranty. Then, it had an air conditioning problem...it was repaired to the tune of $800 because of the warranty. The axel went out again...again repaired...altogether, over $5,000 in repairs...glad I had the warranty.
I bought a vacuum...it didn't work. Took it back. Bought another...didn't work after three weeks. Took it back. Got it replaced. Got another...died after 13 months. Took it back. Next one died after a year...so glad I bought a warranty for $22.00.
I always buy warranties on any purchase over $200 Its worth the $20 to $30 because today, EVERYTHING has a motherboard and when those go out, there is always a repair cost of over $150

Linda of CA 10:51AM August 15, 2012

I appreciate the info on extended warranty as I previously have always purchased one. And it has been for the peace of mind. Now I will carefully weigh the options that you voiced about them. But, could you answer your reasons for purchasing a used car? Please give the pros and cons of buying one.

Dale Porter of NC 11:03AM May 05, 2012

Dear Mr. Bakke,
As executive director and general counsel of the Service Contract Industry Council (SCIC), I must respectfully disagree. As technology and products have become more complex, the value of a service contract, often referred to as an extended warranty, has increased accordingly.
Here are 6 reasons why you should buy an extended warranty:
1. Manufacturer’s warranties typically offer very basic protection, covering parts and labor costs for defects in materials and workmanship, for one to two years. Some manufacturer’s warranties are split – giving one year for parts but only 90 days for labor. If your product fails due to faulty workmanship after 90 days, you will pay the labor cost associated with the repair.
2. Most extended warranties cost between 10 and 20 percent of the retail purchase price of the covered product. For many products, even the simplest repairs can cost more than the price of the service plan.
3. Portable technology often results in frequent breakdown and accidental damage.
• PC World (2010) urged consumers to consider an extended warranty for children and students: "If you think they have a high probability of destroying their laptop within a couple of years."
4. An extended warranty includes reliable online and over-the-phone product support and pre-screened service providers for product support and technical assembly; set up and integration of components for home entertainment systems, video game consoles, etc.
5. Costly product repairs are covered:
• Blu-ray DVD machines most frequently experience laser or main board failures, leading to possible repair costs of $245 or $320, which is nearly double the cost of product replacement. The average cost of an extended warranty for a Blu-ray DVD machine is $30.
6. For almost 25 years, the SCIC has been instrumental in working with state regulators and legislators across the country to insure the integrity of service contract providers and regulate providers of service contracts on consumer goods, motor vehicles, and homes. Specifically, the SCIC has worked with the National Association of Insurance Commissioners to enact laws for the benefit of consumers. Through our efforts, state laws are in place to protect the consumer and ensure the viability of a service contract should a retailer or dealer go bankrupt. In addition, a substantial majority of licensed providers purchase insurance from heavily regulated insurance companies to guarantee the performance of all of their service contracts sold through their retail partners.
Timothy J. Meenan,

Timothy J. Meenan of FL 12:09PM May 01, 2012

You missed one of the biggest reasons not to buy an extended warranty: It comes with mandated service providers who already have your money and therefore don't have any incentive to do anything for you. Basic economics tells you that the service you get under those conditions won't be any good.
We bought a Maytag dishwasher that failed repeatedly in the two years we had a service warranty on it. I know, I know...we should never have bought Maytag. For warranty service, Maytag had contracted with the lowest priced service provider in our area, and it showed. The technicians were obviously incompetent, since they couldn't fix the problem so it stayed fixed. Maytag clearly paid per service call. because every instance of service required two visits, each requiring at least two weeks wait. If the service providers had a paying customer, we were, of course, pre-empted: No-shows were frequent, and when I called to find out when the technician was coming, the scheduler always told me that the technician had "gotten sick" and wouldn't be coming and, of course, they'd have to reschedule for two weeks later. No matter how little the extended warranty costs, you aren't getting good value from a repair that lasts three weeks and takes six weeks to accomplish.
I've had similar experiences with warranty service on cars: the Honda dealer kept my car for five days for a warranty repair for a common part that takes thirty minutes to install. I finally got my car back thirty minutes after I showed up at the service desk and started telling waiting customers my story.
It's interesting how many defenders of extended warranties cite repeated problems with new products. I bet that if I'd called the best repair company in the area to fix my dishwasher, I wouldn't have needed six repairs in two years!

MaryL of IL 11:11AM May 01, 2012

Extended warranty on my 98 VW Passat saved me a small fortune. I cried when it expired.I had no deductible and it covered over $5,000 total in repairs when the manufacturer's warranty ran out . Bought the car brand new. Although it was a major headache, I really liked the car. Bought a 2011 Jetta w/extended warranty. Will not buy a car w/o an extended warranty. Not good to be butt naked with a car and no warranty. Been there. Not pleasant. Just my experience and my opinion.

PeterJ of NY 9:06AM May 01, 2012