Almost one-third of consumers buy an extended warranty for a new cell phone, computer or appliance—but consumer advocates say that is most often a waste of money.
Consider the average cost of a three-year extended warranty for a new dishwasher, which is $157, according to Angie’s List. Compare that with the $159 average bill for a dishwasher repair.
They cancel each other out—unless your dishwasher never breaks down during the warranty period.
Here are seven reasons why you might want to pass on purchasing an extended warranty next time you buy a camera, cameras, gaming system, major appliance, exercise equipment, power tool or computer.
- Many extended warranties do not actually extend the manufacturer’s warranty that comes with the new device because they’re valid for the same time. And they require the consumer to use the manufacturer’s warranty first.
- Extended warranties come with exclusions, so read the fine print before you sign up for one. Most do not cover routine maintenance or damage that the owner accidentally causes to the appliance. And some exclude parts of appliances. For example, a refrigerator warranty might not cover the ice maker or door handle.
- You can void the warranty if you do not have your appliance regularly and professionally maintained.
- Some warranties come with deductibles or charge a service fee every time you use them.
- You’ll probably have to ship the broken product back to the manufacturer or haul it back to the store where you bought it for service. Don’t expect a house call.
- Still, in a survey by the Warranty Group, a warranty and underwriting company, consumers who bought extended warranties reported feeling more satisfied with their purchases than those who didn’t.
- Buyers are most likely to purchase extended warranties on exercise machines, major appliances and digital cameras, according to the survey, and least likely to buy them for mobile phones, computers and tablets.