Extended Warranties, Are They Warranted?

You have probably purchased something when you get to the checkout and the cashier asks you if you would like an extended warranty with that. Whether you are working to eliminate your credit card debt or not, you might want to think twice about that. As a cashier at a part-time job that I have, I am required to ask. Is it worth it?

It depends.

If you insist on having an extended warranty, make sure that the purchase price of that warranty is not more than 20% of the cost of the item (according to Dolans). Personally, I have had a mixed bag with them. The lawn mower that was purchased 5 years ago I purchased an extended warranty with it for $19.9. Granted, I will usually purchase one that is not self-propelled and will make sure that it has a Briggs and Stratton engine on it. I also take the mower in to have it tuned up each an every year. Mine is still going strong after 5 years and will probably last another four years at least (and it gets used twice a week during heavy growing season). That extended warranty was ...

... a complete waste of my money and pure profit for the store that I purchased the mower from.

On the other hand, we purchased a refrigerator three years ago and purchased an extended warranty so that we were covered for three years instead of one. Luck had it that it more than paid for itself because the water line for the ice maker was poorly placed and we had to have a call for that (normally $100 service call) and then the freezer side door (or a side by side) refrigerator had to be replaced (would have cost over $250). That warranty was ...

... completely worth it.

When purchasing appliances it may be worth it to have one, but we purchased on in which the back of the unit was dented. We saved more than the cost of the warranty, so it was purchased. You might be able to negotiate on the price of the appliance. So it has a "ding" in it. If you keep all of your appliances in pristine condition, you might have a problem with one that is scratched or imperfect. My family has a tendency to end up with a scratch or two on the appliance anyway, so why pay more for an item that is going to get a dent anyway?

Make sure that you understand what the warranty covers and what it doesn't. If you purchase the warranty, it may end up costing more than the cost of the item itself and you may not be able to use it in the first place.

Have a great day! Thanks for reading!