Many financial experts advise that most extended warranties are a waste of money. While there are a few trends taking place that may make an extended warranty worthwhile (shortening manufacturer warranty lengths, more complex parts, and more portable devices), whether or not an extended warranty is worthwhile depends on some quality guesswork on your part.
Extended warranties are a poor investment for most products, but, as always, it pays to do your research when purchasing a high-cost mobile device which may rely heavily on easily damaged technology. That being said, automatically accepting every extended warranty offered will end up being a bad investment in most cases.
My husband and I both fall prey to extended warranty expenses fairly easily. He just purchased a new laptop, which seemed a great deal on sale at $1000. When the clerk rang it up, he said, of course, we will want the extended warranty, and the accidental warranty and maintenance agreement. My husband said yeah…and the total shot to $2K.
I said wait a minute (one of those times when we balance each other), just how much is the warranty? Well, for four years, and for complete coverage and maintenance and connection to all your other devices, it’s $250 a year.
Okay, so our house has been hit by lightning, and we’ve lost some modem and power supplies, but in four years, my husband will likely rather buy a new computer, than that to have paid twice for the old one!
I did, in fact, fall for this five years ago when I purchased the washer dryer set on my own. It was a busy day, I needed the item, and I was offered a warranty and maintenance contact where they would maintain the items for four years, clean out the lint trap, repair and replace anything that’s wearing out for $100 for each item each year. In the urgency of the moment, it seemed completely reasonable.
I asked my husband about this today. After all, his policy is, if you are buying a premium item and paying a premium price, why does it need a warranty? If you pay extra for quality, it should have quality. If not, what are you doing?
So, why are we buying warranties and maintenance contracts? His simple response: “I never thought it all the way through.”
The reality is, we don’t use warranties and maintenance contracts, except on the vehicles. Anything breaks, we fix it ourselves.
EASY: There is no way that we can sit all day to wait for a repair person to come fix something that isn’t broken. So out with the maintenance.
EMBARRASSMENT: There is no way I am going to let a repair man see the gunk in my lint trap, or how dirty my refrigerator is (I’m told it’s not, but, well, produce sheds!).
Now, my husband and I have designed, built, repaired and maintained state of the art equipment. We can replace bearings and washer and take things apart and put them back together. Yet, we keep falling for the contracts.
So, my husband is going through all of our warranty/maintenance/contracts and deciding what we need (cars), and what to dump, or get our money back. And, I’m sticking with his question, if we pay premium for quality products, why do we need a warranty or maintenance agreement? – submitted by Flash