A lot of home ownership stuff is still new to me.
For instance: Just after buying the house, we bought two new dishwashers and a new refrigerator from Sears. The appliances came with a one-year warrenty for all parts and labor. The dishwashers are fine, but we had to have the Sears repairman come out twice to fiddle with our fridge before the icemaker (which we use a lot) worked properly.
Now the one-year warranty is running out, and Sears has sent us the “don’t you want to extend the warranty?” letter. And I have no idea. Extending the warrenty for all three appliances costs $370.20 for 3 years, $252.68 for 2 years, or $140.38 for a year. Does anyone have any experience with this? Should we extend the warranty or not?
Update: Spelling of “warranty” corrected. Yeesh, sometimes I amaze myself.
well, if I could get my mom to post she could explain it a lot better. Read the really fine print on the Sears warrenty. My bet is you would be paying a lot of money for very, very little coverage.
Icemakers: thumbs down! They detract from efficiency and they’re impossible to keep in good working order. We tend to get warranties only for high end appliances (which I would define as costing more than $800), because for less than that the warranty ends up not being worth it; you just replace the appliance. I also get warranties for my clothes washing machine, because I can’t live without it. The dishwasher — well, even I do the dishes by hand now and again. So it all depends.
It depends.
Home Depot has this rule that if they have to come out more than three times, you get a new appliance. So since you already been visited twice, it might be worth it to take it for another year, banking on getting a new frig (without this problem). Then again, ice markers are the parts that break the most, so you might find it best to take it for all the years.
Another thing to do is compare the $$ you spend on the warrenty to the price of a replacement. If you’re spending more than 1/2 of the original purchase price on the warrenty, forget it. By the time it breaks, you’ll probably want a new one or at least won’t feel guilty about getting a new one.
One other thing to consider is the warrenty extended coverage you get with your credit card. We put all big items like this on our Amex because Amex automatically doubles the manufacture warrenty on all items. For most times, this means we won’t bother buying more coverage.
another thing to try is to google for your models of applicances and see what others are saying. If they have a high breakage risk, it might be worth it. Also see if you can get the report from Consumer Reports and see what the repair history is for those brands. If this doesn’t work, call around to the local repair people and see what they say about repairs for those models and what the prices are like for the common repairs.
We just bought a frig (side by side with ice maker) and will be buying a washer and dryer soon. We got extended warrenty on the frig because side-by-sides are the worst, but I doubt that we’ll do that for the washer and dryer since they tend to break a lot less.
S. Ellett: Actually, having used the one-year warrenty a couple of times, I’m highly satisfied with Sears – they completely replaced the icemaker and didn’t charge me a dime. And I did read the fine print, and it looks pretty good.
Barbara: You may be right, but it’s too late to replace the fridge with an icemaker-less model now. But for what it’s worth, we did pay attention to energy efficiency when choosing which model to buy.
Morrigan 25: We used Consumer Reports to choose brands that had good maintenance records, but as you say, side-by-side with icemaker fridges are problematic. Maybe I’ll call Sears and see if I can get coverage for just the fridge, rather than covering all three appliances.
they wouldn’t sell warranties unless it was a money-maker for them, so on average you should expect to lose out. however, if (1) an unexpected need to replace the appliance would represent a hardship, or (2) you have reason to think you have a lemon, then it might be worth your while. both of those can only be judged by you.
good luck
acm
the typo fairy says:
“warranty”… not “warrenty”
My understanding is that, as a general rule, warranties are not a bargain for consumers. Of course, you’re happy you have one should the warranteed appliance fail, but most don’t.
Icemakers can be a problem. I’ve had one, and it was fine. But, really, the rest of the fridge rarely breaks down or fail.
Don’t do it. Extended warranties are rarely worth it. Unless you’re one of those people (like my dad) for whom extended warranties work really, really well. Think of extended warranties on a small scale & extrapolate.
Example:
I bought a $20 answering machine (before CD’s were the medium of music choice – random thought) and they wanted me to by an extended warranty that would guarantee replacement. 3 yrs, $30. Hmmmm, cheaper to get a new one if it breaks. What are the chances I’ll need one every year? I’ve never had an appliance (other than the crappy stackable washer/dryer) need repair after the initial warranty that cost more than the warranty.
But that’s just me. And I’m an opinionated and crotchety old bag.
Oh, I was HOPING someone would ask – I LIVE for this!
Public Radio’s “Sound Money” program just did a story on extended warranties. Check it out at http://soundmoney.publicradio.org/ As others have reported, they note that extended warranties are very lucrative to the seller, and therefore pretty lousy for the consumer. And they say that people facing a hurricane should climb inside their dishwashers because they’re indestructible! Ok, that’s an exaggeration, but they did say that your dishwasher will practically never need repair so long as you rinse your dishes.
Consumer Reports goes one step further, saying to stop rinsing your dishes; it’s a waste of water. According to Consumer Reports, the only time to get an extended warranty is for treadmills and laptops. http://www.consumerreports.org/main/detailv4.jsp?CONTENT%3C%3Ecnt_id=359191&FOLDER%3C%3Efolder_id=162679&bmUID=1095457480724
In January 2003, Consumer Reports also did a *delightful* article saying when you should fix an appliance, and when you should replace it:
– Freezer-top fridge? If it breaks w/i first four years, fix it; if it breaks after seven years, dump it. They cost $80-185 to fix, but $500-800 to replace (based on 2002 data).
– Side-by-side fridge? If it breaks w/i first five years, replace; if it breaks after seven years, dump. They cost $100-200 to fix, but $800-1400 to replace (again, based on 2002).
Consumer Reports also acknowledges that the Achilles heel of refrigerators is the ice and water dispensers in the doors of side-by-sides. Readers report that 15% of Sears side-by-sides with through-the-door water-and-ice dispenser required repairs.
So what do I conclude? Assuming a 15% likelihood of incurring a $200 repair bill, I’d be willing to pay $30/yr to avoid the risk. They want $140 for three appliances, two of which will never break? Screw’em, I say. Even if the ice dispenser breaks, you can always turn it off and disconnect the water on the back; the fridge will still run.
Companies make money off of warranties (and insurance), therefore on average, they are a bad deal.
BUT it depends what your risk profile is:
If you’re flush with cash now, but think it likely you won’t be able to cover the repair if it is required, (or if you have personality that will feel good, knowing it is covered) then having the warrantee is probably a good idea.
If you happen to know that you’re much rougher on the product than the average consumer, then the warrantee might also be a good idea.
Right now we only get extended warranties on cars, not because we think that they are a good deal, but because we think that the insurance that our car repair bills have a maximum cap is worth it. And since our financial situation is getting better, we probably won’t bother with that for the next car…
psst, amp, not to nitpick, but it’s spelled “warranty”. :-)
Extended warranties are ALWAYS a waste of money.
From Consumer Reports member page:
“Extended warranty? Ho, ho, no!
At this time of year, salespeople are apt to offer peace of mind and good will in the form of an extended warranty. But such warranties–about $60 to $300 for three years’ coverage, depending on the product–are rarely a good investment. The main reason: Most big-ticket items are very dependable. For example, only 8 percent of analog camcorders, electric ranges, dishwashers, and top-freezer refrigerators were repaired in their first three years, according to 38,000 Consumer Reports readers surveyed in 2000.
The odds are heavily stacked against your collecting on an extended warranty. In fact, the operating profit margins on such warranties are nearly 70 percent, vs. 10 percent on the products they cover, says Laura Champine, a consumer-products analyst at Morgan Keegan, a Memphis investment bank.
Even for products more likely to need repair, such as projection TVs (14 percent repair rate in their first three years), an extended warranty is a poor bet. The average cost of a projection-TV warranty was about the same as the repair cost.
Two exceptions: If you’re buying an expensive treadmill with a standard warranty of less than two years on parts and one on labor, consider an extended warranty for two years. For laptop computers, consider a one- to three-year extension of the standard one-year warranty (buy from the maker; that extends tech support). If you travel with the laptop a lot, consider screen and accidental-damage insurance, too. ”
Don’t do it Amp.
Many many years ago as a college student I sold those extended warranties for Sears. That was before we called them telemarketers. And the only one that was worth the money was for the sewing machines. At least you could get it cleaned and oiled every year, which you need to do at least once a year if you use it much.
If you did not use a platinum/gold visa card or AMEX I would get the warranty for the washer. It does not go out, but when they do it will cost more than the warranty to fix it. However, if your credit card comes with an extended warranty then use that. I lost a $300.00 watch one month after buying it. AMEX replaced it without a hiccup.
By the way, this problem would not exist in the EU, where a minimum 2-year warranty is obligatory these days, with no extra charge or painful decisions involved.
It might be cost-effective to consider an overall home warranty, instead of simply warrantying those three appliances.
Oh, gadflies no. Not a home warranty. Read that, you’ll see it is totally worthless. When I bought my home, they offered a home warranty with it. I looked at the deal and it sucked so badly that we turned it down and asked for the money they would have paid for it instead.
Generally speaking, they’re a bad idea. However, not only do you need to analyze what they cover (which it seems like you have done), you need to assess your risk tolerance.
An extended warranty can be a good deal for your personal psychological profile. Basically, how much does running a risk bother you?
Paying for a warranty means, in essence, pre-buying the service. If you are worried that when the refrigerator breaks, coming up with the $200 to fix it might be a huge problem, then consider the warranty. If you’re not concerned about that, then it makes little financial sense. The higher your risk tolerance, then the less sense it makes.
(For most people, it makes little sense. Refrigerators don’t break that often, and when they do they don’t cost that much to fix.)
Okay, y’all convinced me: No warranty.
If my fridge dies next month and needs to be replaced, I’m blaming it on my blog!
of course now you’ve jinx it, the frig will die within 24 hours of the warrAnty expiring ;)
They are a crap-shoot for sure. We got one on our Sears dishwasher and we actually had to use it the first year for a major repair. We came out ahead on that one. (Otherwise it has been a terrific and quiet machine.)
We have a side-by-side with ice and water dispensor and have had zero problems. Seems we had a warrantee on that but didn’t renew after the three-year mark.
Another warrantee we went for was on a fairly expensive cordless phone which included coverage for lightening strikes. We have a problem with that at our house and while we didn’t have to use it, we were covered for several years. So I feel we got our money’s worth even though we didn’t actually collect. It would have replaced a $90 phone at any time over three years for $35. Not too bad…thekeez
MAKE SURE THAT WHEN YOU HAVE A SEARS WARRENTY YOU ALL THE FINE PRINT ESPECIALLY WHEN IT COMES TO YOUR HEATING AND AIR COND. EQUIPMENT. YOU MAY THINK THAT YOUR YEARLY CLEANING ON YOUR OIL FURNACE OR BOILER PARTS ARE COVERD AND IT IS NOT!!!! SO PLEASE READ THE FINE PRINT ON ALL YOUR WARRENTYS, THIS WAY WHEN THE SERVICE MAN COMES YOUR NOT SUPRIZED!!!!!!
And it’s probably late in the game for this, Amp, but I would really recommend disconnecting the icemaker completely. As has been said before on this thread, they are the most unreliable part of the fridge, and even though it’s too late to avoid the purchase this time around, you don’t have to use it. Our icemaker developed a stealth leak (i.e., it only leaked when the icemaker was empty) and over time the leak rotted out the floor under the cabinets next to the fridge and dripped down the basement wall underneath the fridge. After 5 years, when we finally discovered the leak, we had to rip out and replace the whole kitchen floor, the subfloor, and two base cabinets, plus we had to replace the carpet and the padding under the carpet around the leaked area in the basement. This was kinda expensive and also absolutely not covered by warranty or by insurance.
i’ve worked in the consumer electronics field for 30 years, both in retail and marketing. i do not buy an extended warranty on any of the products i purchase, with one exception – my apple computer. and that’s only because i’m new to macs, and all my computer knowledge is on pc’s, and it’s a laptop, and i’m scared to open it up.
from my experience, an extended warranty can only be justified on higher end models. for less expensive models, the point at which the price of the warranty equals the price of replacement comes way too soon in the life of the product.
further, with an extended warranty, you are locked into using a specific repairman. if they’re booked up for two weeks, that means you have to go two weeks without your fridge. otherwise, you can look through the yellow pages, and get the local repairman to come out in a day or two. assuming you opt for a repair as opposed to a replacement.
as an aside, i’ve found that more expensive products are no more reliable or long lived than the less expensive siblings, and in fact, the additional features are often what will break. the “guts” of the machine are usually *exactly* the same regardless of the cost. it’s much cheaper for the manufacturer to produce the same internal components, and just add on features and nicer looking “shells” for the higher end models.
for further consideration, realize that even a 5% failure rate for any product can be an acceptable ratio in consumer manufacturing. with a retail giant like sears, who must sell like a million washing machines every year, that means 50,000 of them will fail before the average life span is reached.