article

Are Extended Warranties Worth the Cost?

By Blanche Evans via Realty Times

bluehammer

Extended warranties offer consumers longer terms of coverage on service, repair and replacement for their home's appliances than the standard out-of-the-box warranty from the manufacturer. These warranties are highly profitable for retailers, as they can run up the total cost of your purchase by $100 or more, with very few claims being filed per year. Are they actually worth it?

You can argue the benefits both ways.

In the fast paced world of home electronics, by the time the extended warranty expires, future technology will far outclass today's. Digitaltrends.com states that household electronics have seen great improvements in product reliability, making the price of most extended warranties about the same as a repair bill. The same is true with most appliances today too.

Consumerreports.com agrees. Their data concludes that the likelihood of most home appliances needing repairs in the first three years is less than one in five. And most defects will reveal themselves within the first year of use, while the manufacturer's warranty is still good.

That said, extended warranties should be purchased for some items, including those that are difficult to repair or high-priced items that would be painful to replace. These include high ticket items like a $6000 Viking gas range or pricey hi-definition plasma TVs, suggests smartmoney.com

Since extended warranties do make so much profit for retailers, they are very aggressive about selling them to customers. If you're tempted, follow this rule -- the cost of the warranty should be no more than 10% of the purchase price.

And if you decide to skip the warranty, be prepared to shoulder the cost for assessment (service calls), repair (time in labor plus parts) and shipping. Though it's more of a hassle, this can be the most cost-effective measure. If you have a warranty option of $250 and you experience only one instance in the life of your appliance where it needs $100 of work, you could save $150, or 60%.

Ultimately the choice and risk are yours to assume. Extended warranties can be worth the cost in terms of peace of mind, but only if it's for a product you don't intend to change for a few years.

Want to estimate your home improvement costs before talking with a contractor? Claim your home for free with bluehammer to estimate costs, secure your home inventory and learn more about your home.

* THIS REPORT IS AN OPINION THAT MAY BE INACCURATE AND IS PROVIDED SOLELY AS AN INFORMATIONAL TOOL NOT DESIGNED TO PROVIDE DEFINITIVE ANSWERS. ALL ELEMENTS ARE OFFERED "AS IS" AND BLUEBOOK EXPRESSLY DISCLAIM ANY AND ALL WARRANTIES, REPRESENTATIONS, AND GUARANTEES OF ANY NATURE, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABLITILY, NONINFRINGEMENT, TITLE, QUIET ENJOYMENT, ACCURACY, OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL BLUEBOOK (OR THEIR SUPPLIERS) BE LIABLE FOR ANY GENERAL, DIRECT, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY KIND, OR ANY DAMAGES WHATSOEVER (INCLUDING WITHOUT LIMITATION, THOSE RESULTING FROM USE OF THE PRODUCT, INCLUDING : (1) RELIANCE ON THE MATERIALS PRESENTED, (2) COSTS OF REPLACEMENT GOODS, (3) LOSS OF USE, DATA OR PROFITS, (4) DELAYS OR BUSINESS INTERRUPTIONS, (5) AND ANY THEORY OF LIABILITY, ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF INFORMATION) WHETHER OR NOT BLUEBOOK HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

Know what you should pay for your home improvement projects with bluehammer.Claim your home. It's free!

Popular


You Really Should Inventory Your Personal Property

A home inventory is a smart way to safeguard your valuables, saving money and time.

Replacing Your Bathroom Vanity

Replacing your old vanity can make a big aesthetic difference in your bathroom.

Clever Ways To Create More Storage In Your Kitchen

Who doesn't need more storage in the kitchen? You may not have a massive space with dozens of cabinets and yards of countertops, but that doesn't mean you don't have the space you need to store all your stuff. Use a few of these clever tricks and you might be surprised how much extra room you can create.

The Best Paint Colors For An Enduring Look In Your Home

Trends come and go. If you paint your walls the "provocative and thoughtful purple shade" of Ultra Violet, as Pantone, itself, calls it, you're probably gearing up to repaint them in whatever the color authority deems the "it" shade next year. If you'd rather pick a paint chip or two and keep your space the same for the long haul, you'll love these colors that endure.

Lawn Care For The Fall: Essential Tips to Follow

All summer you've been watering, cutting, trimming and feeding your yard in the hopes of having the greenest plot of land in the neighborhood. So what should you do to get your lawn in shape for the cool breezes of autumn? These six steps will help you get a head start on the colder weather.

House Fires: Less Than Two Minutes To Survive!

Have movies and super heroes lulled us into a false sense of security when it comes to house fires?

8 Paint Colors for a Standout Front Door?

Extend a standout greeting with a memorable hue at your home's entry

7 Rules for Choosing The Right Area Rug

You just moved into your new home. You've purchased the perfect furniture and accessories. You even found the perfect area rug to add to your hardwood floors, but you're totally stumped on which size to buy.

Home Repairs VS Improvements: No Clear Answer

Question: I am having trouble figuring out what constitutes an improvement and what is ordinary maintenance. Thinking ahead to selling my house in a few years when the market rebounds, I have been keeping accurate records so that I can deduct these costs to lower the capital gains. Recently, I remodeled a bathroom, replaced a deck, replaced and upgraded the spa filter and motor, replaced the front door with a fiberglass model guaranteed to last more than my lifetime, and replaced a roof and rain gutters. Which of these can I safely regard as improvements, and which are just maintenance?

7 Model Home Ideas To Steal For Your Home

You don't have to be in the market for a new home to tour model homes. In fact, model home complexes are a great place to get a few ideas for your existing home. Whether you're looking for ideas to renovate your kitchen and want to see the most current trends, are having a hard time deciding on paint colors and want to see how others are incorporating color into the home, or are simply looking for a little inspiration, you can find it here.

See More Articles