Whenever you make a purchase these days, there’s a good chance you will be offered an extended warranty on the product. For some products a warranty can be a good investment, but should you buy one for your new home appliance? In this blog we will give you our opinion on that matter and tell you everything you need to know about home appliance warranties.
There are two reasons a store could be selling a warranty. Reason #1: The retail store wants to help their customer enjoy the product longer, or reason #2 : They want to make more profit. From my experience the usual answer is reason #2. Although there are some stores who value customer satisfaction more than profit, they are pretty rare. Most stores see the bottom line before anything else!
According to Consumer Reports, the majority of stores earn 50% or more gross profit margins on the extended warranties they sell. That is more than twice what most stores gross on actual merchandise sales. Warranties result in huge profits for these companies. If these warranties are that profitable for the people selling these appliances, then chances are they are not going to be so profitable for you.
Besides being overpriced, there are other reasons to reconsider buying an extended appliance warranty. You may feel protected when you buy one, but in reality there are a lot of problems and issues that most warranties do not cover.
When you are offered a warranty, the seller makes sure to point out the problems the warranty DOES cover, but what they hide in the small print are the things their warranties DON’T cover. For example, most policies won’t cover problems that they decide are caused by “misuse” -a term that can be used for a lot of things, and “customer education.” They also rarely cover any breakage or failure that does not cause the appliance to malfunction, such as a broken crisper drawer or a busted door handle. This can be a nasty surprise when you think you are covered.
With all that in mind you should also know that the price of repairing an appliance is usually lower than what the warranty will end up costing in the long run. If you want to know if this is the case with the appliance you’re considering, then you should compare the price of the warranty you’re looking at with the average price of repairs for that appliance. You should be able to gather this information with a few clicks of the keyboard online. While you’re looking into that, you should also research the
average failure rate for the appliance you’re buying. Chances are the failure rate is pretty low, especially for the period of time the warranty covers. But, of course, they will surely contact you prior to the end of the warranty to sell you another extended warranty, at an even higher price. Don’t bite!
So to sum things up, it is our opinion that most extended warranty policies are not likely to save you money. You are better off setting aside the sum of the extended warranty price for that rainy day. Whatever the case, do your research and you’re much more likely to be satisfied with the decision you make.
Summary
Article Name
Should I Buy an Extended Warranty on My Fridge, Oven, Washer Or Dryer?
Description
Are appliance warranties a good deal? We answer that for you here.
Author
Patty Husk
