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


13 Decorations to Pair With Beautiful Dark Walls

Dark walls, from inky blue to charcoal and black, are refined and dramatic - but decorating around them without making your space feel too dark can be tricky. If you've been thinking of painting one or more walls a deep, dark hue, these ideas for color and decor pairings should help.

Is School Improvement Part of Your Ownership Strategy?

Neighborhoods with good schools often carry higher value for home buyers with children, so if you want to raise values in your neighborhood, supporting school improvement may be a valuable undertaking.

Simple DIY Projects That Will Increase the Value of Your Home

Looking to boost the value of your home without spending hundreds of thousands of dollars? You can! Making changes in certain rooms, like the kitchen and bathroom, is more beneficial than in others. These simple DIY projects will help increase your home's value the most.

New Windows Changed My House - and My Mind

It was exciting to contemplate city life after living in smaller towns. Apparently, everyone else thought so too, because by the time I decided I liked a house, it was gone from the market.

9 Places to Shop Online For Furniture and Home Furnishings

These days, there isn't much we don't shop for online. But if you have been hesitant to buy your furniture and other home items with a few clicks instead of being able to walk into a store and see them in person, it might be time to rethink that strategy. With so many great sites that offer easy delivery (and returns) and tons of reviews that can give you confidence in your purchase, furnishing or updating your home online is easier than ever. We have curated a few of our favorite sites.

Replacing Your Bathroom Vanity

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

Inspired Ways To Create A Guest Space When You Don't Have A Guest Room

Not all of us are blessed with enough bedrooms to accommodate every member of the family plus a home office and a man cave and a theater room and a guest space. And, it's that last one that often ends up as a challenge when friends and family come to visit and you either have to break out the blow-up bed or give up your room and hunker down with the kids. You don't need to add on or buy a new home to provide a comfortable space for guests. These smart solutions will help you create a great space for guests with minimal effort.

Unique Ways To Dress Up Your Kitchen Cabinets With Hardware

Hardware is the jewelry of the kitchen. In a well-designed space, it can add an important finishing touch. In a space that needs a little help, it can provide some sparkle to help distract from worn or outdated features that may be more difficult to update. And, it's an easy, inexpensive project you can do yourself.

Early Planning For Retirement And Inheritance

Question: We are nearing retirement, and are becoming concerned about our future, and the future of our children.

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?

See More Articles