Extended Warranties: Worth It or a Rip Off?

(Psst: The FTC wants me to remind you that this website contains affiliate links. That means if you make a purchase from a link you click on, I might receive a small commission. This does not increase the price you’ll pay for that item nor does it decrease the awesomeness of the item. ~ Daisy)

by the author of What School Should Have Taught You: 75 Skills You’ll Actually Use in Life

I had to buy a new dishwasher the other day (the old one finally decided to break), and when I did, I was asked whether I wanted to buy one of two different warranty plans that the store offered. I thought I might take a little bit of time today to tell you my thoughts about these extended warranties

To start with, I said no to all of them.

I have reached the point where I don’t ever purchase additional warranties from retailers anymore. There are a couple of reasons for this.

For starters, if something is going to break in the immediate future, I can just return what I purchased with my receipt. Once upon a time, I purchased a Husqvarna chainsaw. Immediately upon getting home, I discovered that it didn’t work at all. I returned it, got my money back, and then purchased an Echo without any problems whatsoever.

There’s no way that the warranty protection plan would have helped me out there.

Junk has a junk lifespan.

Most stores offer something like a one-year warranty on the “larger” purchases. If something fails within that time frame, you can then take it back and get your money back. If I’m dealing with faulty equipment, I’ve found that it tends to break within that timeframe.

Let’s say that I just bought a new tool of some kind. Maybe an air compressor. If it’s a piece of garbage tool, odds are it’ll break within the storefront’s warranty timeframe. This has been my experience with a number of defective items that I’ve purchased.

Of course, there’s a world of a difference between purchasing an $80 tool and purchasing a $700 refrigerator. It’s not as hard to swing $80. But $700 going down the drain? That can easily wreck somebody’s monthly budget if they don’t have an emergency account set up. If you just purchased that fridge two years ago, outside of the scope of the store warranty, you’re now out of luck.

Let’s say this had been the case with my dishwasher. (The thing was ancient but bear with me.) I, at that point, would call the manufacturer and explain to them what happened. Where the storefront may just say, “Oh well,” you might have better luck talking to the manufacturer. As much as I hate leaving negative reviews for things online, that is an option that can work in your favor here too. Negative reviews on that dishwasher at the major retailers selling it causes the manufacturer to typically reach out to you to see if they can’t fix the problem.

It’s not a foolproof option. They may say, “Oh well,” too, but it is worth a shot.

What gamble are you willing to take?

The problem with these extended warranties is they’re just a gamble – nothing more than insurance. You really don’t know what’s going to happen in the future, but you do know that the company is offering you to purchase that extended warranty because they’ve already done the math and they know that X percent of the machines will be just fine throughout that 5-year extended warranty timeframe. That’s why they offer an extended warranty. Because they can make money off of it.

Storefronts are not charities. They don’t go into the extended warranty business just to make you happy. Like any other insurance agency out there, they’ve crunched the numbers, and now they’re willing to play the game. They know that the odds are in their favor to make money off these deals. Sure, they may have to pay out for a few fridges here and there, but overall, they’ll still make money.

The other reason I’m not big into this gamble is that I’m not completely clueless when it comes to fixing things. You can learn how to fix anything from Youtube. If you have the tools, know-how, and desire, you can likely fix it. The catch here is that the extended warranty is probably $30, whereas you would end up spending $100 on parts to fix the fridge yourself, but to me, it’s a gamble I’m willing to take.

And quite frankly, if you’re willing to spend the $30 initially, that’s the gamble that you’re willing to take.

Check those reviews before you buy.

The other thing that I typically do before I purchase a “big” purchase is research. If I’m going to be spending a lot of money on something, I want to make sure that it’s not a piece of trash. This is one of the great things about the internet. Everybody has an opinion on everything that they want you to know about (like warranty plans). Because of this, you can likely find dozens of detailed reviews for every dining room set, refrigerator, and washing machine on the planet.

Do take the time to sift through those reviews, and you’ll have a much better chance of choosing something that will function for the long haul.

Because I tend to do this ahead of time, I feel more comfortable saying no to purchasing the extended warranty plans at the storefront.

Some warranty companies are difficult to work with.

Some warranty companies are better than others. Other warranty companies can be impossible to work with. If you say the least thing wrong when dealing with them, suddenly they’ve discovered a reason to revoke the entire policy. It seems like they’re in the business of denying claims, not fixing products that didn’t measure up.

If you’re strongly considering a warranty, be sure to research carefully to make sure it’s going to be worthwhile. Go with a company that has a good reputation from the customer’s end.

Don’t throw away your money.

This is just what I think about all the subject of warranties. I’ve talked with other people who always buy the plans and even more who ride the fence, sometimes buying, sometimes not. If you’re at a loss at the register when the cashier asks you this question, hopefully, this will give you something to think about so you don’t feel like you’re making terrible life decisions.

But, hey, I’m interested in hearing your thoughts as well.

Do you normally buy these warranty plans? Do you have a decision tree that you use to decide which to avoid and which to purchase? Tell us what you’re thinking in the comment section.

About Aden

Aden Tate is a regular contributor to TheOrganicPrepper.com and TheFrugalite.com. Aden runs a micro-farm where he raises dairy goats, a pig, honeybees, meat chickens, laying chickens, tomatoes, mushrooms, and greens. Aden has four published books, What School Should Have Taught You, The Faithful Prepper An Arm and a Leg, The Prepper’s Guide to Post-Disaster Communications, and Zombie Choices. You can find his podcast The Last American on Preppers’ Broadcasting Network.

Extended Warranties: Worth It or a Rip Off?
Aden Tate

Aden Tate

About the Author Aden Tate has a master’s in public health and is a regular contributor to PewPewTactical.com, SurvivalBlog.com, SHTFBlog.com, ApartmentPrepper.com, HomesteadAndPrepper.com, and PrepperPress.com. Along with being a freelance writer he also works part-time as a locksmith. Aden has an LLC for his micro-farm where he raises dairy goats, a pig, honeybees, meat chickens, laying chickens, tomatoes, mushrooms, and greens. Aden has two published books, The Faithful Prepper and Zombie Choices. You can find his podcast The Last American at Preppers’ Broadcasting Network.

3 thoughts on “Extended Warranties: Worth It or a Rip Off?”

  1. Bill in Houston

    Yes, extended warranties are a joke. I remember buying some speakers for my workstation a few years back. Maybe thirty bucks. The guy behind the register at Evil Best Buy asked me if I wanted an extended warranty for my speakers. An extra three years. Only ten bucks.

    I laughed, but politely said “no thanks.” Still have the speakers and they still work.

  2. I might consider an extended warranty at some point but up till now I really haven’t. The only thing like it I’ll buy is the extra insurance in the unlikely event I rent a car. I learned my lesson there! There’s one discount tool store I occasionally use that will offer me an extended warranty on practically everything, even when it’s almost the same price as the item. I try to be polite when declining those. But I sometimes laugh.

  3. It really depends on the warranty.

    When I worked at a car dealership in a service department, we always cringed every time somebody would come in waving a warranty from some aftermarket company like Coast to Coast. We knew that nine times out of 10, the thing that should be covered wouldn’t be. It seemed like they were interrogating us when we called in the repair, hoping to catch us saying some small thing that would nullify the customer’s coverage. They got out of way more bills than they ever paid, and customers spent thousands of dollars on these useless warranties. It made everyone involved furious and was a complete rip off.

    On the flip side, the Apple Care warranty I have on my devices is worth its weight in gold. I’ve had major repairs done on my laptop without spending a penny. Sure, there’s a bit of a wait getting it fixed, but it’s honestly so worthwhile not to have to keep buying new computers when mine conk out. As someone who works online, having a decent computer is essential to making a living and that’s a warranty that’s extremely worthwhile.

Leave a Comment

Your email address will not be published. Required fields are marked *

New From The Frugalite


Related Posts

Malcare WordPress Security