Extended Warranties - get them or not, and why?

Parent Cafe
21

Bought two new cars and purchased the longest manufacturer warranty available (10 years) for each. Both have zero deductible and are fully transferable to any new buyer. (Although no longer available, includes a provision covering the tires. Believe it or not, there is no mileage warranty from the dealer or car manufacturer or tire manufacturer for the tires on the new cars. Important for AWD vehicles as tire shaving is often needed to avoid damaging the differential if fewer than all 4 tires are replaced at once.)

I bought these due to concerns regarding supply chain issues and the fact that new cars are highly dependent upon electronics & computer chips–both of which can mean expensive repairs. Also, want to feel comfortable only using dealership(s) to service these cars as the increasing sophistication often leaves independent mechanics bewildered.

22

ON AVERAGE, no - you do not need an extended warranty. The pricing of the warranty is their average losses on fixing things plus an administrative fee and profit. So on average paying out of pocket when/if something breaks you avoid the administrative fee and profit that the warranty company makes.

Warranty companies have also become all to clever at the fine print. You think you’re covered until something happens only to find “oh, that situation/part/service” is excluded. I carried the protection plan on a cell phone once only to find I needed to use it and there was a $150 deductible and the warranty company solution was to ship me a refurbished/used phone that I could have bought out of pocket for ~$150.

However it does come down to personal situation. If that washer/dryer/car/etc broke, do you have the financial reserves to pay out of pocket to execute the fix.

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23

Usually no but did when we bought our refrigerator. It had problems just a few months before the expiration date. They weren’t able to get a repair person to my house in a timely manner so ended up refunding me the purchase price of the fridge. (I figured out how to fix it myself just a bit later.)

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24

No, and I have not had a situation where a vehicle or appliance had an expensive failure beyond the included warranty but within the time that an extended warranty would include.

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25

We’ve never gotten them, but just purchased one for our 2022 F150. My H is aware of multiple expensive issues people are having and was worried because we use it for towing frequently.

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26

We do not purchase extended warranties, but have been lucky with a few manufacturer warranties.

Our HVAC unit happened to come with a 10 year warranty (if serviced regularly). For this reason, we used the same contractor that installed it, for regular service. Their price is higher than most local HVAC service fees, but it paid off. The unit needed a new motor in 5 years! They replaced at no cost. Furnace was made by a quality company that USED to be manufactured in USA, but left just before we purchased.

I laughed when a poster on another thread mentioned their DW died at 10 years. Our Bosch quit almost exactly on the 10 year “birthday”. We had 2 appliance companies check it out. Each determined a different cause per computer codes, but could not fix it, or suggested new because the fix would be 1/2 the cost of new. We had a ‘hunch’ about the issue; hired a plumber to correct; and it has been working just fine since. I’m beginning to wonder if the computer knows the 10 year date, and is programmed accordingly :wink:

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27

We got our Frigidaire refrigerator in a package at Home Depot. (We had had previous problems with the GE refrigerator which is a piece of junk.) So when Home Depot mentioned that Frigidaire, was included in the same “family” as Maytag, we said OK, but I didn’t trust it so we bought the warranty.

Refrigerator was installed on January 6 refrigerator freezer broke on March 22.

With Frigidaire we had four service people try to fix this lemon of a refrigerator. The first idiot looked about 13 years of age said that we needed Freon and left. I lost about $800 worth of meat and food for two weeks!
The Square trade people said that we needed to deal with the Frigidaire people first.

Every week, we had issues with the freezer and fridge. I had to buy a $200 freezer from Best Buy to keep my food cold. There were technicians in and out and canceling appointments because they didn’t have parts as it was a newer model and I never knew if anyone was going to show up.

I called local Home Depot in July, frustrated and pissed off, and they called the Square Trade people and when Square Trade realized that we had been dealing with biweekly visits from Frigidaire, they told me “don’t call Frigidaire anymore, we’re going to deal with it”. One of the Square Trade guys said that he was blown off by Frigidaire!
Square trade/Home Depot refunded our full original costs. Square trade paid for the freezer that we had to buy. Because I didn’t have receipts for the groceries I had bought I couldn’t get full refund for the food but they gave me an additional $200.

We went to an appliance store to get our new Maytag fridge. We did buy the extended warranty because the Maytag guy had said these refrigerators are not made to last 10 years. We had a little bit of a hiccup with the Maytag, but the serviceman came out immediately- had the parts- based on what I described, that was wrong with the fridge, fixed it and haven’t had a problem since then.

So this has been a horrible experience and my husband and I are now going to buy the extended warranty when we originally buy any appliance or car. The heating system came with a warranty of 15 years. They’ve been out a couple times; it was a local company -very familiar with the warranty and there is no charge for the service calls.

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28

I haven’t kept score but it seems that MANY who have bought an extended warranty for a pricey item have used it and it has paid for itself. Certainly not always, but quite often.

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29

Right - but how many people are putting up their hands that they spent $150 on an extended warranty and saying “yeah, never used it”?

The warranty (and insurance) companies are not in the business of losing money. They are taking in more money on the warranties than they are paying out for claims.

If you bought zero extended warranties you may at some point have a breakage that a warranty would have covered but the cost of that repair is less than if you bought warranties across all your appliances/vehicles/etc.

If you knew X brand or Y model was prone to issue - what are you doing buying it to begin with? :slight_smile:

30

Because you couldn’t afford the high end model? And you wanted to try and protect the investment of your mid-model? Because money doesn’t come easy for many people?

Edited to say that sure, insurance overall can be a real racket. We don’t buy homeowners insurance cause we are sure we will have a house fire. But better to have it as protection than not.

Said with a personal belief that extended warranties are something I’ll invest in for some things and not for others. And depending on the circumstance, $$, etc.

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31

If you look at the response I gave further up - and maybe I should have restated it


However it does come down to personal situation. If that washer/dryer/car/etc broke, do you have the financial reserves to pay out of pocket to execute the fix.

Yes, you/we carry homeowners insurance in case the house burns down or some other catastrophic thing happens. You wouldn’t be able to come out of pocket to replace the house. A powertrain warranty on a used car makes sense if it’s a primary vehicle and the person wouldn’t be able to pay a $5-$8K repair bill to replace a motor. A bumper to bumper warranty is, usually, overpriced and wasted.

32

The problem is that “they don’t make 'em like they used to”.
The “brand names” are now being shipped and sold from various/multiple companies world wide for the cheapest price. A good name means next to nothing these days. Even “made in the USA” means it might be assembled in the USA but the parts could be a piece of crap of dubious quality to keep it cheap.

When I had my 15-20 year old refrigerator fixed I asked the appliance guy (older man) if it wouldn’t be better to just buy a new one. He said absolutely not. The chances that he could repair it and it would keep on ticking were much better than me buying new and it lasting for any time. It lasted another 5 years (while the new one that replaced it finally lasted 5 years and then I had to figure out how to fix it because there wasn’t anyone to fix it.)

Trying to keep track of who is manufacturing what and where out of what materials is next to impossible.

Another lament was that while their business was very busy they couldn’t find anyone willing to put in the time to learn the business. He said they were willing to teach anyone willing to put in the time and the pay was really good. They just couldn’t find responsible people who wanted to put in the work to learn.

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33

Completely agree with everything you say but the argument there is “is it better to put some $$ into my old XYZ to fix it or replace it with something new” - less to do with if carrying an extended warranty is worth the cost or not.

The extended warranty companies have all the information about the reliability and cost to repair. When you go and shop for something and are deciding between two models ask about the extended warranty cost on both of them and it may give you an indication which one is prone to breakage and/or cost to repair.

34

My point really is that “I’ve had a BRAND name and it’s still going! I’ll buy another–they last forever!” no longer applies.

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35

Exactly. If doors now fall off airplanes, what can we expect from appliances? :laughing: :wink:

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36

There is an old adage, that says they won’t offer an extended warranty on products likely to need it and there is truth to that. As others have said, it really depends on your personal situation and how much does the warranty cost and what would it cost to repair. If you are generally cash poor, where you couldn’t lay out 2 grand to fix your hvac unit, then an extended warranty would be warranted for example. It also depends on how much you value piece of mind, too.

I will tell you on cars that these days if you maintain a car and don’t overtax them, major things like the engine and transmission don’t fail that often, when I have seen them fail it is because the people quite honestly were often responsible, like towing something at the weight boundary of the vehicle’s engine and drive train.

I also would be careful about who is offering it, those places that advertise on tv don’t have a good reputation, and there is fine print that needs to be looked at, like "proper care’ (ever lease a car, turn it in, and you find all these things that aren’t normal wear and tear
same idea).

With things like my heating system, ac (when I had central AC) and the like I have a service contract through my utility. Unless it is a major issue like the heat exchanger cracked, they do the work either for free or for a nominal charge. It isn’t much, and generally they have been pretty good.

If a unit has a reputation for being crappy likely they won’t insure it, or if they do it will be a lot. Like any kind of insurance, they use actuarial tables to figure out expected losses , and that is how they make their money.

I think if the plan is good (which is the clinker, if it is good), for piece of mind it is worth it. We have hard water, and with our Bosch dishwasher I got the extended warranty (I have found that if the unit is going to break, it is likely just outside the main warranty, and if it then keeps working, if it is likely to break, it will be before the extended warranty ends).

I don’t think it is necessarily stupid to have insurance, we do on our cell phones and I get apple care on computers. The display on Mac computers have a tendency to have problems with burned in images and other issues because of the Iris display.

We do try and have reserves to pay for repairs, and for us in most cases it has worked out well. I also try and do research on products in terms of quality, like the heating units we have, and about repairability. For example, I would never recommend a Lennox unit , not because they aren’t good, but because they use proprietary parts that are hard to get and expensive to replace. I am careful with things like cars to get them regularly maintained, even if people think a lot of it is a waste, and so far it has paid off for us, the only major incident I had with a car was when my garage got invaded by rodents and they did unspeakable things under the hood (to the tune of 15k), but because it was a new car with full coverage, insurance paid for it.

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37

I decided not to get an extended warranty on a new wall oven. It took multiple calls to find out that the “authorized technicians” required to provide service were based in a city 1.5 hours away and the reviews for that company were abysmal. If I used a local service they would not reimburse the expense. It’s important to read the fine print, and in this case, make some phone calls so you know what you are getting.

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38

OTOH that is the reason I got a new refrigerator because they couldn’t get an “authorized repairman” timely.

39

I have a home warranty. It’s kind of funny, we lived in a 40 yr old house and hardly anything broke. I wondered if it was worth it. This “newer” house I bought has had issues. The warranty company has spent a lot more money than we gave them in premiums. It seems sometime in the 1990s and 2000s, houses turned into garbage.

40

You get what you paid for. Not a problem with our 1999-built house in 18 years. Sold it without any inspection issues. An ounce of prevention is worth a pound of cure, as they say. Fixing a loose caulk in a timely way will prevent a rot, for example.

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