Should I buy an extended warranty for my new appliances?

We’re asked this question a lot, and our answer is almost always: no, you’ll be wasting your money if you buy an extended warranty on any appliance.

How Warranty Companies Avoid Paying Out

Warranty companies are in the business of making money, and they’ve found a nice racket for themselves, because they rarely ever have to pay out on their warranties. How do they get away with it? Well, for starters, they choose to cover the period in your appliances’ lives when they are least likely to break.

• Brand-new appliances may have manufacturer defects stemming from their production, but these defects are almost always found within the first year. Every manufacturer warranty covers this period.
• Wear-and-tear slowly accumulates over the years, but by the time that wear-and-tear starts to cause the components of the appliance to break down, the extended warranty has long since lapsed.
• In the intervening years, appliances are far less likely to break. Even then, many reputable manufacturers, after the initial warranty period has lapsed, provide limited warranty coverage for certain key parts or systems (like the sealed system in your refrigerator).

Thus, to start, extended warranty companies slip into the gap after issues from the factory floor have already been sorted out but before serious issues begin to present years down the road. They are counting on the appliance not breaking down.

What’s more, most extended warranty companies are very selective about the issues they cover. Sure, they’re generous enough to cover the manufacturer defects that have already been sorted out in the first year under the manufacturer warranty. But beyond that?

• Will the issue result in an expensive repair, like refrigerator sealed system repair? They likely don’t cover it.
• Is it a mechanical component very likely to break, like an icemaker? They likely don’t cover it.
• Does the issue involve cosmetic damage, like damage to exteriors, handles and knobs, shelves and bins, etc.? They likely don’t cover it.
• Is the issue due to negligence or misuse? They likely don’t cover it.

To sum up, they offer to cover a range of unlikely, inexpensive issues when the appliance isn’t even likely to break down. If anything else breaks outside of the fine print of their contract, you pay the cost of the parts and repair.

But My Cousin Had an Extended Warranty and They Bought Him a New Fridge!

Sure, he gambled and won, but as everyone but the most addicted gambler knows: the house always wins in the end. Extended warranty companies know how to turn a profit. And while it’s some fun to gamble a few dollars at a casino, with extended warranties you are betting and hoping that your appliance will break down, all so you can get your money back. That’s no way to live!

And even if you should be so lucky as to have your appliance break down, many extended warranty companies force you to pay an additional deductible per incident, some as high as $100-$200. As if buying the extended warranty in the first place wasn’t enough!

And even then you’re not assured of receiving service worth half of what you paid. Most extended warranty companies are merely call centers, farming out what few repairs do come through to the appliance repair companies (or repairmen) willing to do the entire process for less than $100, even if it takes multiple visits to complete the repair. These are very rarely factory trained technicians or authorized service centers, and for that reason they generally lead to poor repair outcomes. We’ve known customers who were made to endure up to six visits for the same issue, whose appliances were never fixed, and who finally turned to us for help.

To further save money, most extended warranty companies insist on using the parts in their own warehouse to complete the repair. Never mind if the appliance repair technician already has the part on his truck, they’d have to reimburse the tech for that. Instead, customers are left to wait months for a back-ordered part to arrive, whereas their local appliance repair company could have finished the repair in a week.

So ask yourself, who would you rather have repair your appliance? Factory authorized technicians with factory support, access to the product engineers and the latest service bulletins, and a full parts warehouse on hand? Or Donny and his station wagon that used to be a roofer until last month?

But I Don’t Trust Modern Appliances, They Don’t Make Them Like They Used To

No, modern appliance may not be as reliable as older appliances, but it’s not due to shoddy design or planned obsolescence. Appliance manufacturers have added more features and technologies to make the appliances work better and be more useful. While these have added more potential points for failure, many of these features are excellent and well worth the risk. And you can bet, if it’s a feature that’s likely to break down, extended warranty companies will not cover it.

Is There Really Never a Time to Buy an Extended Warranty?

We can’t speak for every extended warranty of course. It is possible that you find an extended warranty that charges no deductibles per incident, covers cosmetic damage and other common issues (including accidental breakage), offers friendly buyout clauses triggered by repeat repairs, limits how long you wait for back-ordered parts. But they are a rare sight, and you should still do your research to make sure they’re all they say they are.

So, in general, we feel confident recommending you trust in your new appliance and your local appliance experts. And if your appliance should happen to break, cut out the middleman and use your free consumer choice to select the best repair company you can find. If you’re in the Omaha, NE area, please know that your appliances could not be in better hands than ours.