If you have the money and want to spend it somewhere, go ahead. A fool and his money are soon parted.

The subject gets raised every year and it always comes back to this: nobody will recommend it, but you may want to have it regardless of what people say.

Might as well keep the shareholders happy. And the salespeople. And their managers. If it helps you sleep well, and be happy too. Glad to have met you. See you around.

How much do they want for the warranty? Generally it's a better idea to save the money and pay repairs out of pocket although people who have had serious problems will chime in about how much they saved. They're more popular now, particularly with all the electronics in appliances these days. Generally they're just extra profit for the retailer or they wouldn't be selling them.

I buy my appliances from Lowes and I always purchase their 4 yr extended warranties that start AFTER the manufacturer's one year warranty. They include parts and labor. The warranties have been anywhere from $79 to $99. With today's appliances (lack of quality control and all the electronics) I'm ALWAYS going to buy the peace of mind an extended warranty gives me. My latest appliance purchase was a KA top of the line dishwasher. I feel good knowing that I'm covered for the next five years. ONE service call would be more than I paid for the 4 yrs of coverage). Same for my Whirlpool Cabrio washer. My KA top of the line range (or close to it) wasn't browning evenly towards the end of the 5th year. Warranty covered parts and labor to replace the door seal. I'm sure it depends where you buy your appliances and who they use to warranty their products but I've ALWAYS had good care with Lowes. In fact, it was two days before my warranty was up when I called about my range. Even tho a tech couldn't get here till after the expiration date, I was still covered since I called in the claim before the warranty expired. It was another 10 days before they fixed it and told me to call if I had anymore problems with it (the seal). Obviously my answer is yes, they're worth it :) If you're buying a whole kitchen of appliances, you could probably bargain for a better deal (appliances AND the warranties).
Oh, one more thing. Our 7 yr old GE Artica fridge died about a month ago. It was out of warranty. A computer board had to be replaced. Cost...$435 :o
Monica

The bigest problem with extended warranties is that A&E does the bulk of the service for extended warranties and they have yet to fix anything, show up for scheduled employment or finish a repair in 1 visit without blaming the repair due to user neglect or misuse

I'm like monicakm. I bought my appliances at Lowes. The salesman gave me an almost 30% discount on the appliances and I bought the extended 4 year warranty. I think it was $149 so I covered the three most expensive appliances: induction cooktop, refrigerator and microwave/wall oven combination. That leaves only the dishwasher without the extended warranty. Hopefully I won't need it but I think it was well worth it. Had it been much more money than that, I don't know that I would have.

May I jump in with a question? I have purchased extended warranties for small appliances and have found when I try to get a repair or refund I am ALWAYS told the problem is my own fault and thus the warranty is void.

Does this happen with appliances too? Could "they" say, you shouldn't have....1.2.3 and leave me with a worthless warranty?

Yes, they can and often do - a friend of mine had that happen with an extended warranty on a car. The goal of insurance is to collect premiums and not pay out on claims. It really depends on the company - you many be better off with a manufacturer's warranty than a third party one but not necessarily.

The ugly truth behind extended warranties is that it is the way the store makes higher profitability on appliance sales.
The profit margin has gotten so low on most appliances that selling extended warranties makes a big difference in a stores profit ratio.
It's simple, if a store makes 18% profit on a $400 appliance sale they made $72 dollars. If you buy a 4 year extended warranty for $100 that they buy at $20 from a warranty company they get an additional $80. So out of a total $500 sale they net $152 dollars in profit or 30%.

Now for the uglier truth.
The warranty company that sold the extended warranty knows that they will sell more than 100 warranties for every one or two that they have to pay out on. They also only allow servicers who they have a low contracted rate with to work on your appliance so the average they are paying out is only around $100 dollars per service. so for every $2000 dollars they take in they only average a pay out of around $200.

Now the Ugliest truth.
Sales employees are fired if they don't sell contracts on at least 50% or more of all the appliances they sell.

thanks for your opinions and personal stories...

a few of the electrolux items we selected are wave-touch (use an electronic touch screen) which is why i'm considering it.

we got our order in before the end of the 10% sale but need to sign the paperwork.

i'm mainly thinking the fridge or wall oven might be worth it.

Read the terms of any contract carefully. Some cover repairs only if the machine is completely dead/non-functional.

TO JAKVIS...YOU ARE CORRECT!

MANGOTOO

I guess I'm just one LUCKY gal. I buy extended warranties on everything from computers and printers to heating/AC units to kitchen and laundry appliances. Anytime I've ever had to use them, they paid off (fixed or replaced the item). My Dell computer blew up about a week before an extended warranty expired. I had even forgotten I had an extended warranty! Dell tech support told me. They said they'd send a comparable or better replacement computer. It was light years better! Not new, refurbished but less than a year old. I paid $13 (I think) for a 4 year warranty on my HP All in One Printer/fax, etc from Sam's. It'll be well worth it if something goes wrong. Maybe I'm making warranty companies rich but they're fixing and replacing expensive electronics and appliances for much MUCH less than it would cost if I didn't have these warranties. My new $40,000 car that is more a computer on wheels than a car :o has an extended warranty. Ford wanted $1895 for 7 yr/100,000 miles (and other perks). I found the exact same Ford ESP warranty on line for $1085. The dealership sold it to me for $1085. Since we keep our cars much longer than the average person, again, this is well worth it to us.
Monica

monicakm - clearly on any given warranty such as your computer you've come out ahead - but I'm curious if you're ahead overall - that is, if you total up the costs of ALL your extended warranties, are they more or less than the costs of the repairs/replacements they've covered?

Monicakm please look at the aggregate numbers.

Sum all insurance premiums received.
Sum all payouts made to claimants.
One product that IS a good deal for the buyer is Life insurance.
I bought a lot.
Extended warranties are not a good deal for the buyer.

Anecdotes are not good enough information to be helpful.
I have wonderful stories to relate, also, about my experience with insurance in general.
Not relevant to the financial analysis.

If you win at the casino, get out while you're ahead.
If you buy lottery tickets, and win, get out while you're ahead.

On the other hand, if you want to help make white collar work fun and profitable for everyone who has ever had an idea and called it a product, then by all means buy everything that you ever come across. It's a great way to finance innovate and contribute charitably to other people's success.

hth

I, wondered what a store makes on a refrigerator. Because a manager, told me, they only make 10%. I, think they make alot more because I, just bought a 3000.00 refrigerator KA, for 2250.00. And I, see refrigerator's, that people bring back marked down alot. Just saw one that retail's for 3200.00, marked down to 1300.00. How could they mark it so low. If the mark up is only 10 to 18%. Just wondering. sharaz

After having been burned by warranty companies refusal to cover anything, I now take the money I would have spent on warranties and put it in a savings account. I draw off that account to pay for repairs. You should end up with money left over at the end of the warranty period after paying cash for repairs out of that account.

Pay for your purchase with an American Express card and you get an extended warranty automatically. Not sure if any other cards work the same

Here is a link that might be useful: AMEX Warranty

I may or may not be ahead overall. I can tell you that the cost of the fridge repair was double what I paid for my range, dishwasher, clothes washer and printer warranties combined. My KA range had 3 or 4 warranty calls (surprise!...I don't recommend KA ranges). I paid $79 for the warranty. Wonder how much 3 or 4 service calls would have been?? We never had any warranty work on our combined purchase of a 65" tv, surround sound system and DVD player. I'm thinking that was about $250. That's ok. Peace of mind is worth something (to us). One trip to the service dept for a computer, AC or transmission problem could pay for the $1085 Ford extended warranty. May not be what everyone wants to do but it's benefited us. People complains bitterly about how nothing is made "like it used to be" and quality control. More parts and more complicated parts mean more to go wrong but by all means, don't protect your investment?? Thanks but I think I'll continue to be an fool and part with my money :) When we were much younger and just starting out, we didn't buy extended warranties. Just simply could not afford it. I completely understand if someone's budget just won't allow for it and they have to take that chance. We did it for years.
Monica

In my case it's not that my budget won't allow me to buy an extended warranty, it's that my budget will allow me to pay for a repair or replace something out of pocket if I need to. I'd rather pay as I go than pay up front for something I may not need. Now I do have health insurance because I wouldn't want to pay out of pocket for surgery for example, but if one of my appliances were to die prematurely, I'd probably grumble a lot but I'd be able to replace it. But as you said, for peace of mind it's worth it to some people. You've also been lucky that you've been able to actually get your extended warranties to pay up - some people pay for them and then find they're SOL.

I pay about $20 a month for a service plan through our gas co. that covers my range, dryer, furnace, and hot water heater. Those are the items that make the house "go" so it's worth it to me. Over this year, I've had a service call on the dryer and the range - total cost to repair both would have been around $500, so I made out like bandit (so far). I like that I don't have any of the warranty run around. I don't need to locate my receipts. I don't have to register anything. No one argues with me about "improper usage." No one points out that my repair needs are excluded (using language I didn't understand at the time, like "no coverage for the xyz module." And I'm covered as long as I keep paying.

I've had extended warranties on three cars. It ended up being a good deal on one - my repair needs were covered. On the other two, repair needs were excluded. And no, I'm not talking about maintenance needs, I'm talking about repairs related to the airbag (apparently not covered) and to the computer (apparently not covered). We've decided that we're done buying extended warranties.

Its the same as personal health insurance. You are making a bet. You place a bet(pay) that you will have a problem, or you skip the bet(payment) and hope you don't have a problem. They're both a joke to me

Insurance is for catastrophes.

High cost events
Unlikely events
Events that are beyond your control
These conditions make it worthwhile for both the insurer and the buyer.
Both parties are in a win-win situation.

It does not create a win-win for either party when coverage is broadened to include smaller costs.

Appliances and their repair are not high cost, compared to a catastrophe.
Repair is not high cost, compared to a catastrophe.
An extended warranty is an expense.
You choose to pay it in advance.
Talk about easy!
You remunerate strangers who aren't there when repairs need fixing, and who've kept your money as sales commissions and administration fees.
Talk about being easy!

Psychologically, if you have extended warrantees you are willing to face life's most minor challenges, like rearranging the deck chairs on the Titanic while it scrapes the iceberg. Why sweat the penny stuff?

Paying for any insurance = paying someone to pay you = exchange of money for money = make it subject to unlikely, high-cost situations = catastrophe.

If you have lifelong coverage on your ability to earn, you are willing to face bigger challenges. Choose where you exchange your money.

Hiring a butler is an expense, not insurance.
Maintenance and repair is an expense.
Manage your own repairs.
Manage your own expenses.
Manage your own repair expenses.
Don't act "I can afford it" and "I'd rather have the peace of mind."

Or, do the opposite and let them have your money now.
Why not now?
"It sounds good; it makes sense," you may believe
Think about the bigger things that can hurt you.
Instead.
It hurts.
Just to think about what can hurt, is painful.
Isn't it?
Then, call the insurers who already know you, and improve the features in your coverage shielding you from more significant events.

Now which kind of peace of mind do you want?
The kind that tells you someone will be available to do small things for you?
The kind that tells you someone will be available to do big things for you?

Insurance is defined as the "equitable" transfer of the risk of a loss.
Health insurance is not "equitable" and neither are warranties. I did not compare warranties to home owners insurance or car insurance, just health. Everyone I know that has had a health catastrophe, and had insurance, is broke. In fact they are so far under they will never see the light of day. What's the difference between between oweing a couple million or owing a couple hundred thousand. Either way it's a burden that will break you

Warrantees are a minor form of risk transfer.

If you want to discuss health insurance here, go ahead.
It works sometimes.
I agree it will work better in the future when people organize a better system.

Personally I've been able to get insurances to work for me, when catastrophes happened.

With health insurance it all depends which insurance company you're with and how sleazy they are. It's true that some people with serious medical problems and wlth insurance end up with financial problems but many don't. That why health insurance should not be run by for-profit insurance companies.