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6fthook 07-04-2011 09:03 PM

opinions on extended warranties
 
We just put a down payment on a refrigerator, stove, washer, dryer, dishwasher from PC Richards. Delivery and the balance of the payment won't be until we move into the house around mid August hopefully (currently remodeling).

The salesman (very nice guy) sold us on the 10 year extended warranties for everything except for the dishwasher, and prices came out to about $250/item. He explained that EVERYTHING is covered, for the exception of something that we do to the unit to break it like hit it with a sledge hammer. He also explained that the manufacturers are obligated to keep parts for any appliance for a minimum of 7 years after it is discontinued, and if it is unfixable within the 10 year warranty, we would get the original price of the unit in store credit to buy anything else.

In my mind I see the 10 year warranty as beneficial, even for the price tag of $250 per appliance. I'm thinking the typical cost of having someone come diagnose and fix an appliance would be around that price, so one house call would pretty much already pay for the 10 year warranty for that unit.

What are your thoughts? This is our first house, so we have no idea how often these appliances break down, etc. We can also take back the extended warranty if we want to. What do you think?

Thanks for any advice!

vsheetz 07-04-2011 10:40 PM

Extended warranties are huge profit makers for the seller - and salesman are often compensated for selling them.

It's nearly always cheaper to be self-insured (extended warranties are a form of insurance). That means no purchase of extended warranties. Over your lifetime, the money saved will far exceed the amount of money paid for repairs. Sure, folks will often point to a perticular instance where they were glad they purchased a warrantly and it covered a repair. But taking the long term view, it is cheaper to be self-insured.

Jackofall1 07-04-2011 10:45 PM

If I read that right you paid 1250 for extended warranties, I have a rule, never buy extended warranties on anything, as the poster before me, if analysed over the warranty period it is just not worth it. For 1250 you could replace the entire unit, the chances of having more than one issue in 10 years is slim to none.

Mark

Jacques 07-05-2011 06:34 AM

Why not the d/w? that's as liable to break as the others. $1000. for ten yrs. what's the chances of you spending that on service? -slim. Up side; PC-R' does their own service so it should be ok [no bottom feeders-working for peanuts]. Downside; in-hse contract, so if they go under or pull out of your area-you're stuck, if one or more of these appl are a lemon-now what-constant parade of service appt's. can't just replace after spending the $ for contract....from a purely $ standpoint-better off self insuring. but depends on your personality. if you're a worrier-buy the contract. in any event, do whatever and don't look back. Happy New Home. P/S, had to laugh "salesman was very nice guy". the money's in the contract for them. cancel the contract and see if he still loves ya!

AandPDan 07-05-2011 08:54 AM

I'd say no to extended warranties as well.

From Consumer Reports, the average lifespan of these appliances:

Refrigerator - 13 years
Electric stove - 13 years
Gas range - 15 years
Washer - 10 years
Dryer - 13 years
Dishwasher - 9 years

I've seen many of these go MUCH longer. My washer/dryer are almost 25 years old and except for changing a leaky pump myself ($50) I've done nothing to them except to keep them clean. They still look brand new.

Self insure is the way to go.

DexterII 07-05-2011 12:04 PM

I have to confess that the only extended warranty I ever puchased did pay for itself; our first color television, which we purchased in 1986, had a "weak link" that failed twice, and the first time alone was enough to pay for the extended warranty, so, when it failed a couple of years later, we were ahead of the game. That aside, I agree with the above comments. They benefit the store and the salesperson, but beyond that, I can safely say that, except for that television, I have never spent the equivalent of what an extended warranty would have cost on any major appliance.

genie01 07-05-2011 02:36 PM

So far, I've never bought an extended warranty. It's just like insurance. If you don't take it, you have to accept a certain level of risk that repairs will cost more money than extended warranty.

havalife 07-05-2011 04:40 PM

The only extended warrinty I have done was when I bought my truck, I got the 100,000 mile warrenty which included free oil changes all that for $2500.00 Sounded like alot but when I figured out the oil changes it paid for itself on that alone. So far 97,000 miles and nothing wrong yet so maybe it is just a wash. I did pay for 1 oil change on my own and it was $75.

mcnutty 07-05-2011 05:03 PM

If you are an intrepid DIY guy who isn't afraid of getting your hands dirty and relatively advanced in electrical knowledge, then just keep the money and forget about the extended warranty. Otherwise, you could potentially save a lot of hassle by paying the store the extended service fee.

My friend bought a Roper electric ranger 12 months back, it died 6 months later; so he bought another one, same model, and it "kind of died" last week (it turned out one of the breaker jumped). He didn't buy the warranty, and in both cases he didn't get any help from either the store or the manufacturer. He suffered a lot of stress from this.

hardwareman 07-05-2011 05:28 PM

Quote:

Originally Posted by mcnutty (Post 680313)
He didn't buy the warranty, and in both cases he didn't get any help from either the store or the manufacturer. He suffered a lot of stress from this.

all the more reason NOT to buy the extended warranty, I quarantee the only good extended warranties come from the mom and pop stores that do their own service and stand behind those warranties.

vsheetz 07-05-2011 07:19 PM

Quote:

Originally Posted by vsheetz (Post 679971)
Extended warranties are huge profit makers for the seller - and salesman are often compensated for selling them.

It's nearly always cheaper to be self-insured (extended warranties are a form of insurance). That means no purchase of extended warranties. Over your lifetime, the money saved will far exceed the amount of money paid for repairs. Sure, folks will often point to a perticular instance where they were glad they purchased a warrantly and it covered a repair. But taking the long term view, it is cheaper to be self-insured.

One has to take a long term, life time view - not dwell on individual instances... Extended warranties are great deals for the seller - not the buyer. One of the worst is extended auto warranties - which are long term and come into affect after the standard warrantly - but paid in full up front and added into the financed amount and you pay interest on it!

Let me put it another way. If everytime you bought something you put the amount of money for extended warrantly into a savings account instead. Then every time you need service on one of those items pay out of the saving account. Over lifetime, you will have a substantial amount of money remaining in the savings account.

loneframer 07-05-2011 08:02 PM

My opinion of extended warranties?

Take the money that's equivalent to the cost of the extended warranty and use it to buy rub-off lottery tickets. You have about the same chance of breaking even over the lifetime of the warranties.

You might have a greater chance of coming out ahead.:laughing:

6fthook 07-05-2011 08:48 PM

Thanks for all the advice! Looks like the consensus is no extended warranty.

The pitch that got us interested in the extended warranty was the salesman explaining the average cost of a house call for a fridge with the diagnostic, parts, labor, etc. being around $200-250, which one call would pay for the extended warranty cost.

Being first time home owners, we had no idea how much appliance repairs cost or how often they need repairs.

loneframer 07-05-2011 09:43 PM

Quote:

Originally Posted by 6fthook (Post 680479)
Thanks for all the advice! Looks like the consensus is no extended warranty.

The pitch that got us interested in the extended warranty was the salesman explaining the average cost of a house call for a fridge with the diagnostic, parts, labor, etc. being around $200-250, which one call would pay for the extended warranty cost.

Being first time home owners, we had no idea how much appliance repairs cost or how often they need repairs.

Hence my reference to the lottery.:laughing:

Any appliance can have a failure prematurely, but most do not.

I bought the house I'm in now 9 years ago. New fridge, microwave, washer and dryer from Kenmore. Passed on the warranties.

I replaced the microwave about 2 years ago, with a Magic Chef that after a rebate ran me about $120.

The dryer needed a belt replacement that I did myself for about 20 bucks.

So far, I'm out $140 and about 2 hours time.

BTW, I forget, but I think the extended warranty offered was only 4-5 years from date of purchase, so I would've not been able to cash in anyway.


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