Extended Warranties - Worthwhile, Worthless or Worth Considering?

[SinceThe70s]

 

For many years I was of the opinion that extended warranties were a sucker play. Now I feel like they're almost a necessity. Why? My parents had appliances that lasted for decades. The appliances I purchase often have issues within 5 years and sometimes issues recur in spite of repairs within warranty.

 

As mentioned in another thread I recently purchased a used car for the first time ever and opted for a third party warranty so it goes beyond appliances

 

Interested to hear how others approach the decision to pay for an extended warranty.

 

 

 

 

 

 

[Not at the table Karlos]

7 hours ago, SinceThe70s said:

 

For many years I was of the opinion that extended warranties were a sucker play. Now I feel like they're almost a necessity. Why? My parents had appliances that lasted for decades. The appliances I purchase often have issues within 5 years and sometimes issues recur in spite of repairs within warranty.

 

As mentioned in another thread I recently purchased a used car for the first time ever and opted for a third party warranty so it goes beyond appliances

 

Interested to hear how others approach the decision to pay for an extended warranty.

 

 

 

 

 

 

I was thinking about this the other day. Pretty much same line of thought. Things used to last so much longer. But now with all the shortages and issues I feel like it's a good idea to get some type of warranty.

 

Wife wanted an elliptical, I passed on the warranty, few months later the thing is making all types of weird noises. Had to pay out of pocket to fix it. Started making noises three days after factory warranty ended. 

 

I immediately went and bought an aftermarket warranty on my car even though it's still under factory warranty for another year. Good thing I did because a part failed like a week after. They weren't going to honor the factory warranty for some reason. I showed them the aftermarket warranty and they fought each other for a while until the car company agreed to repair the car under warranty. If I didn't have the other warranty I feel I would have been SOL. 

[SinceThe70s]

33 minutes ago, Not at the table Karlos said:

I was thinking about this the other day. Pretty much same line of thought. Things used to last so much longer. But now with all the shortages and issues I feel like it's a good idea to get some type of warranty.

 

Wife wanted an elliptical, I passed on the warranty, few months later the thing is making all types of weird noises. Had to pay out of pocket to fix it. Started making noises three days after factory warranty ended. 

 

I immediately went and bought an aftermarket warranty on my car even though it's still under factory warranty for another year. Good thing I did because a part failed like a week after. They weren't going to honor the factory warranty for some reason. I showed them the aftermarket warranty and they fought each other for a while until the car company agreed to repair the car under warranty. If I didn't have the other warranty I feel I would have been SOL. 

 

20-30 years ago an uncle told me that extended warranties weren't worth the paper they were written on and for years I took that to heart. For the past decade or so I've had or heard of so many issues with new appliances that I get the extended warranty more often than not.

[davefan66]

Appliance warranties I’ve purchased, have never used. I figure the cost into what I’m willing to pay for appliance.  I did try using it on a Westinghouse fridge, but the inner shell isn’t covered. Biggest POS fridge I ever bought.

 

Cars? Every time on a used car.  I work out what I feel the car is worth via Kelly Blue Book and Edmunds. Make my offer including the extended warranty at half the quoted cost rolled into one number.  As long as I feel comfortable I’ve gotten the deal I want, I’ll get the car with the warranty.  Use it once, it probably pays for itself and then some.

[Nextmanup]

I just bought a new refrigerator and did not buy an extended warranty because it's a sucker play as you say.

 

Note that I did not buy the cheapest thing I could find with an "LG" or "Sanyo" brand name at Best Buy however.

 

I got a gorgeous Miele unit that is expensive, but gets impeccable reviews, and that makes sense: it's German.

 

The good stuff being made today will last for a long time just like the old days.

 

You have to avoid cheap crap.

 

You get what you pay for.

 

 

[Miyagi-Do Karate]

10 hours ago, SinceThe70s said:

 

For many years I was of the opinion that extended warranties were a sucker play. Now I feel like they're almost a necessity. Why? My parents had appliances that lasted for decades. The appliances I purchase often have issues within 5 years and sometimes issues recur in spite of repairs within warranty.

 

As mentioned in another thread I recently purchased a used car for the first time ever and opted for a third party warranty so it goes beyond appliances

 

Interested to hear how others approach the decision to pay for an extended warranty.

 

 

 

 

 

 

I was talking to an appliance repair guy not long ago. He said even the really nice appliances now aren’t going to last more than like 7 years or so. That’s also consistent with our experience. 
 

So, the options are to buy something cheaper— knowing you will have to replace it— or get the warranty. The problem with the warranty are the limitations on it and the claims process. 
 

After cycling through appliances, I have realized that the warranty isn’t a bad deal for something like a microwave (which will 100% die on you now by like year 6), or fridge. But otherwise we are just rolling the dice. 

[WhoTom]

In general, extended warranties are good for the company, not for the consumer, otherwise, the company wouldn't offer them. Statistically, if a product is going to fail, it usually does so during the standard warranty period. If it doesn't fail by then, it'll probably outlast the extended warranty too.

 

A good rule of thumb: If the extended warranty is more than 10% of the product price, then it's a rip-off.

 

[Just Jack]

I bought the 5-year extended warranty on our Sharp TV when we bought it just over three years ago, because I had read some reviews that the screens are made by TLC, and those TVs started crapping out after just a year.  I'd rather have the peace of mind that I can get it fixed/repaired than buy a new TV.  Meanwhile my 27" tube Philips/Magnavox TV is still going strong about 25 years after I bought it. 

 

[\GoBillsInDallas/]

Wow, you stepped into a minefield for this topic!

 

In general, do NOT get an extended warranty, mainly because of the fine print in the contract. Extended warranties do not cover problems/failures due to accidents, abuse or misuse. And the warranty companies themselves make that determination. That is why you see the other posters talk about "fighting with the warranty company".

 

For example, let's say that you buy a new dryer. You use it for 18 months and it stops working. The warranty company will say something like "you didn't do any yearly maintenance on the dryer, therefore, we won't pay". They will point out the maintenance requirements (ex. interior cleaning) in the owner's manual and ask for evidence that the maintenance was done. Therefore, you "abused" the dryer by not doing regular maintenance. Same thing with other appliances, cars, exercise equipment, etc.

 

[SinceThe70s]

7 hours ago, \GoBillsInDallas/ said:

Wow, you stepped into a minefield for this topic!

 

In general, do NOT get an extended warranty, mainly because of the fine print in the contract. Extended warranties do not cover problems/failures due to accidents, abuse or misuse. And the warranty companies themselves make that determination. That is why you see the other posters talk about "fighting with the warranty company".

 

For example, let's say that you buy a new dryer. You use it for 18 months and it stops working. The warranty company will say something like "you didn't do any yearly maintenance on the dryer, therefore, we won't pay". They will point out the maintenance requirements (ex. interior cleaning) in the owner's manual and ask for evidence that the maintenance was done. Therefore, you "abused" the dryer by not doing regular maintenance. Same thing with other appliances, cars, exercise equipment, etc.

 

 

Interesting that you used a dryer as an example. We had a repair on our dryer a few weeks ago and didn't have any issues using our extended warranty to cover it - which isn't to suggest that what you describe doesn't happen, just not to me - yet.

 

My fave warranty story was our microwave. It was trouble from day 1 and we had it 'repaired' multiple times while it was under warranty and then it died shortly after whatever coverage we had expired. Problem was the model was discontinued so we couldn't just replace it and the mounting kit was flush with the backsplash tile and I couldn't find a model that I could hang on the same mounting kit. I ended up buying an extended warranty. By the terms of the warranty I couldn't make a claim until 3 months passed. So I waited 3 months, made the call and by a stroke of luck we finally got the unit fixed.

 

 

[f0neguy]

Bought a dehumidifier on Amazon a few years ago and the reviews said they died after two years or so.  Got the three year extended for $40-50 bucks.  (Print and save the paperwork).  Unit died,  filed a claim and had an Amazon gift card in amount of purchase emailed to me immediately.  Bought another one with extended warranty 👍.

[Punching Bag]

I bought a third party warranty for my new vehicle a number of years ago.  It was a 7 year warranty and if we did not collect on it at end of it we got 85% of money back.  Not a bad deal for company I thought since got 15% for doing nothing other than paperwork if no claims on it.  At end of year 6 we were sent notice of bankruptcy notice and I thought that that was odd for I had seen advertisements for it recently.  Research showed me that the same group of people had formed a company each year in a limited partnership and miraculously their company went bankrupt each time in 6th year.  There were discussions on net on whether it was their model was just failed in that business year (leases, etc) or whether it was designed to take out money and fail.  I received a postcard on a lawsuit against them but nothing came out of it.   Basically it was designed to take out the money before paying out so there was no chance of collecting at end if you had no warranty claims.

 

I had a Toshiba laptop which seemed to be designed to fail after 2 years - if you did not buy the extended warranty they stalled you until you were past warranty period.  Repeated models has same issue with motherboard power connection but they just repeatedly changed model numbers to keep ahead of people searching for reviews until they no longer make them.

 

Right now I pay using American Express which doubles manufacturer warranties but never pay for any 3rd party warranty.

 

 

[Fleezoid]

I never get extended warranties. The way I see it, you either get extended warranties for every big purchase, or none. You simply don't know which item will last and which will break. Most big appliances come with 1-year warranty and I figure (right or wrong?), if its faulty or defective, you'll find out year 1. The money I save by not buying any extended warranties will go towards repairs if I need them. but that's just me. 

 

A quick story about 3rd party warranties; I bought a used vehicle many years ago and opted for a 3rd party extended warranty. While I was on vacation in Texas (in July), the A/C went out. I took it to a dealership where they diagnosed the faulty part, condenser I think. Turns out it wasn't that, but something else. When they tried to get authorization from the warranty company for the 2nd repair, the warranty company wouldn't authorize it until they sent out an adjuster, which would take 3 days. I was heading home in 2 days, so I had to delay the repair and drive more than 2 days through the south with no A/C. I was fuming, literally and figuratively. Never again. If it was a manufacturers warranty, they would have repaired it on the spot. 

 

 

[Mark80]

They are, by definition, a losing proposition.  Otherwise, they wouldn't be in business.  You are paying for piece of mind.  If you can afford to replace the item you should never get an extended warranty.  If you cannot, then the piece of mind may be worth it.  I'm buying them for my cars almost every time knowing I probably won't need it and am wasting the money, but perfectly fine with it knowing there is no chance I'm going to have to drop $25k on a new engine or my $50k car is worthless.

Edited February 14, 2023 by Mark80

[Augie]

On 2/11/2023 at 9:58 AM, Nextmanup said:

I just bought a new refrigerator and did not buy an extended warranty because it's a sucker play as you say.

 

Note that I did not buy the cheapest thing I could find with an "LG" or "Sanyo" brand name at Best Buy however.

 

I got a gorgeous Miele unit that is expensive, but gets impeccable reviews, and that makes sense: it's German.

 

The good stuff being made today will last for a long time just like the old days.

 

You have to avoid cheap crap.

 

You get what you pay for.

 

 

 

We just got a new dishwasher. The one in the house we bought a year ago was a PITA.  Our old house had a Bosch, and we went that route again. We never had any problems with it and got great performance. The new one is so quiet there is a soft red light that shines on the floor to warn you so you don’t open it while it’s running. It’s that hard to hear.

 

Buy good stuff, get better results. Most things like TV’s I just consider disposable these days. 

 

As for warranties, I have a tale of warning. Not to say it’s a bad idea, but you should hear my experience just to consider the point. The previous house we bought had older AC units. We went back and forth, got the price down a bit, and ended up settling (despite knowing better) for a home warranty instead of getting the price down farther. Sure enough, a few months in the AC goes bad. They come out and patch it up and top it off, while we pay a $200 or $250 deductible. (See where this is going, yet?) A week later, we need them back. They top it off again, we pay again, and I see the error of my ways. They would top it off and collect the deductible until the end of time, but despite all the noise we made, we would NEVER get it properly repaired (it was beyond that) or Heaven forbid…..REPLACED.  I think replacing both was $15-20k (excluded furnaces).

 

There may be a place for warranties, but my experience made me feel like a sucker. 

 

 

[WhoTom]

2 hours ago, Augie said:

We went back and forth, got the price down a bit, and ended up settling (despite knowing better) for a home warranty instead of getting the price down farther. Sure enough, a few months in the AC goes bad. They come out and patch it up and top it off, while we pay a $200 or $250 deductible. (See where this is going, yet?) A week later, we need them back. They top it off again, we pay again, and I see the error of my ways. They would top it off and collect the deductible until the end of time, but despite all the noise we made, we would NEVER get it properly repaired (it was beyond that) or Heaven forbid…..REPLACED.  I think replacing both was $15-20k (excluded furnaces).

 

We had a similar experience with our current house. The sellers threw in a home warranty, and after the first winter, the furnace died. The company sent a repair guy who said the parts he needed weren't made anymore, but he could "rig something up" for us. I said, "If they don't make the parts to repair it, then it should be replaced." The home warranty company didn't see it that way. Eventually, they gave us the amount the guy quoted to "fix" it, which we applied to a new furnace.

 

A few months later, they contacted us to ask if we planned to renew. We got a good laugh out of that.

 

[Just Jack]

I recently bought a phone mount for my work van.  They asked if I wanted to buy the extended warranty.  No thank you, I think I'll be able to afford another one when it breaks.  

 

[Punching Bag]

16 hours ago, Mark80 said:

They are, by definition, a losing proposition.  Otherwise, they wouldn't be in business.  You are paying for piece of mind.  If you can afford to replace the item you should never get an extended warranty.  If you cannot, then the piece of mind may be worth it.  I'm buying them for my cars almost every time knowing I probably won't need it and am wasting the money, but perfectly fine with it knowing there is no chance I'm going to have to drop $25k on a new engine or my $50k car is worthless.

 

Bought a used car with a warranty from dealer.  I had an issue in less than 3 months and brought it back to dealer and was told it was not covered by warranty (computer I think) and asked if I wanted it fixed and I said yes.  A month later same issue and same response not covered and paid again.  A month later same issue AGAIN so I went to a different dealer and I was told told it was a cracked engine block and covered - and from oil buildup it was at least 6 months earlier meaning issue was there when I bought car.  I asked for used parts. Later found out that when dealers offer warranties they need to contribute to repairs so it dealer I bought it from was stalling until car was out of warranty.  I contacted manufacturer and manufacturer paid part of my first two repairs.  I did spent one day off on sidewalk outside dealership with bullhorn telling customers to not trust dealership.  Told to leave and I said it was freedom of speech and if they had an issue call a cop and I'd call newspaper who evidence and copy of repayment check from manufacturer.  Never had a cop come.  Used car ran many years after that.

[Gugny]

On 2/11/2023 at 8:58 AM, Nextmanup said:

I just bought a new refrigerator and did not buy an extended warranty because it's a sucker play as you say.

 

Note that I did not buy the cheapest thing I could find with an "LG" or "Sanyo" brand name at Best Buy however.

 

I got a gorgeous Miele unit that is expensive, but gets impeccable reviews, and that makes sense: it's German.

 

The good stuff being made today will last for a long time just like the old days.

 

You have to avoid cheap crap.

 

You get what you pay for.

 

 

 

If you actually spent upwards of $8000 for a refrigerator, then you're a bigger sucker than anyone who buys an extended warranty.