Are Extended Appliance Warranties Worth it?
You’ve probably stood at the check-out counter of an appliance retailer before and wondered if you should spend extra money on an appliance protection plan. Just in case you’re standing there now, we’ll give you the short answer: extended warranties on home appliances are usually a waste of money.
These plans are known by many names including appliance insurance, extended warranty plans, service agreements, protection plans, and service contracts. No matter what it’s called, it’s probably not worth buying. Here are a few reasons why.
- You Probably Won’t Need ItWhile 41% of consumers purchase service contracts, the vast majority of them go unused. This is because residential appliances don’t typically fail during the usual five-year extended warranty period. Why spend money on something you’ll probably never use?
- It Could Cost More Than RepairsEven if your appliance does break during the extended warranty period, there’s a good chance repairs will cost less than the extended warranty. In fact, many appliance manufacturers warranty some or all parts of machine well beyond the first year. Of course, some people do save money by purchasing an extended warranty, but the odds are not in your favor.
- Repairs may not be CoveredMany extended warranty plans exclude certain types of failures such as broken belts, shattered glass, or cosmetic items. Other plans don’t cover the most expensive components like compressors or transmissions. Breakdowns caused by misuse, power surges, or water damage are rarely covered, and warranty claims can also be denied if an appliance has not been maintained as required by the warranty agreement. All too often, consumers are forced to pay out of pocket because repairs are not covered by the extended warranty they purchased.
- You Lose ControlYour service agreement may require your appliance be repaired by a certain service company. It may also leave you with no other option than spending weeks without a working refrigerator. Here at Michigan Appliance Repair, we’ve encountered many customers who choose to pay out of pocket for repairs because they were dissatisfied with the company selected by their warranty provider or their ability to repair the appliance within a reasonable amount of time.
While an extended warranty may help prevent unexpected appliance repair costs, it’s not likely to pay off in the long run. Keep in mind, there’s a reason that so many retailers push these plans, and it’s because they’re so profitable. A 2014 study found that consumers routinely pay over a 100% mark-up for extended warranties. So, instead of spending your hard-earned money on an extended warranty, we recommend you buy the most reliable, high quality appliances you can afford. Consider brands like Aga Marvel, KitchenAid, Miele, Northland, Sub-Zero, Thermador, and Viking.