Community poll forum: Are extended warranties worth it?

Therefore, they very carefully arrange things so that they will ALWAYS take in more money in premiums than they have to pay out in claims. The house always wins in the long run.

If you always put the money you would spend on a warranty in a basket and always pay repair/replacement costs out of the basket, I believe you will have money in the basket when you die.

so here we go i have found that it depends on the price of the eitem. and if its electronic.like a tv that costs you 1000.00 or more you should buy the extended worranty.cause the bulbs could burn out or there could be an electrical surge that you didnt plan on.and a buld could cost you 500.00 or more on a big screen tv .and you are caught off gard and not have the money.to pay for the repair this way you have the warranty that will pay for the repair.allso depends on how much they want for the warranty .ok here is a forencestance if you buy a vcr or ahead phones and maybe a small radio. and it costs you less than 100.00 and the clerk tells you that they have a warranty that will fix it .for 35.00 or 50.00 you should say no.cause there is a manufactory warranty on it for one year on parts and labor.and since you paid a lot less for it it could not break for three years or so .and you got your moneys worth out of it.so you could buy the newer version latter.and upgrade to some thing you wanted better.i hope this answer s your question,thank you donald

I have bought them on my Pro-scan large screen TV, which payed off. I went thru 3 TVs in 5 years and always got a better TV because my TV model was no longer made by the company. I also purchase the warranty on my Olympus digital camera and I went thru 3 of them in two years and also got the next higher model. I have used my Dell computer warranty also. I have had to have the technician come to my home 4 times and fix problems, such as fans and motherboards. So I think they are worth the extra cash. Usually with the company plan, they will most of the time repair it and not give you a new item unlike with the extended warranty plan.

Worthless! I paid for an extended warrantee for an exercise bike from Sports Authority. The computer failed and needed to be replaced. The company wanted $100 for the part. To replace it required unscrewing 4 screws and disconnecting one wire. Sports Authority wanted to send over someone to replace it under warrantee for $135! I told them, send me the part and I will replace it myself. They said no.

Bottom line $100 without warrantee, $135 with warrantee - RIP OFF! Never again!

If the item is something you will replace within 3-5 years, don't get the extended warranty.

I have always bought extended warranties EW's. They have been available in Australia for many years & I remember the first time I bought one on a portable stereo (boom box). The hooks that held the components together came out of the housing & they sent me a totally new unit.
I have had to claim on the EW of most of the products I've bought. I always try to buy the best value product I can afford, top of the range if the pocket will allow. I see the EW as insurance like house & contents insurance.
The last time was for a top of range DVD recorder/player with harddrive. It failed 2 days after original warranty expired & although it had to be away 3wks, I got it back with a totally new guts. That's 3yrs ago now & it's STILL under the same EW as I always buy 5yrs. So if the same thing happens again, I'll get a new guts again. Same,same, for my TV, this computer, printer, fridge, VCR(which has been in 4 times over 10yrs at no cost to me other than transport costs). Money very well spent I'd say.
As I sit here I'm mentally adding up the costs of the things I've just mentioned here (there are more), & it amounts to aprox $4500!! for an outlay of about $500. To my mind that's good value. There are products I've never had to use the EW of, but they are few. I feel today's technology is so iffy that you'd be silly not to insure yourself against the inevitable breakdown.
cheers,
ClissaT

When ever new products come out it's definitely worth it to me. It might just be a little ignorance. Example: The UMDs were still kinda new. It looked like the permanent plastic case the disk never comes out of was durable. But one day I put them in my backpack. And the clear center pieces broke. I had extended warranties on all my disks (from circuit city and Game Stop,). I had them replaced no problem (circuit city provides you with a UPS label, and Game Stop replaced mine in store,).
And for expensive items. Because you probably spend only about $100 on warranties before you have to replace something that would normally cost you about $1,000. The only time I wouldn't get an extended warranty is; an item that cost less than $50 and I already know how to care for it (remember the UMDs).

I agree with the guy who said that it depends more on the item (nad who's using it) than the price. I just had to buy a new laptop because the extended warrantee I'd bought (which had just replaced the battery a month before) did not cover "accidents," and my problem was apparently due to a splash of coffee that had taken 3 weeks to do the damage. You can bet I bought the new, improved, accident-included extended warrantee on the new one. So $600 for the laptop and another $300 for three years of peace of mind. With a final price tag for everything, including taxes, of just over $1,000 ($300 less than the broken computer cost 2+ years ago, before taxes and less-inclusive warrantee), it feels like a good investment. With laptops, though, I'll only buy an extended warrantee that includes batteries. That way, you recoup much of the original price of the warrantee, anyway.

BTW, Consumer Reports has an article arguing against extended warrantees, reasoning that you can extend the manufacturer's warrantee with your credit card. Well, a) credit card warrantees , in my experience, don't cover either accidental damage or consumables like batteries, and b) I was told you have to get an insurance company adjuster to adjudicate your claim--way more hassle than dealing with the store technicians who are familiar with the product.

From a pure financial perspective, it's better to never buy them as long as you can afford to replace the item if it breaks. As others have said, bank the money instead and on average you'll come out ahead even if you occasionally have to buy a replacement. If you don't then the people setting the warranty rates are not doing their job.

The only items I would consistently recommend buying an extended/enhanced warranty on (by "enhanced" I mean one that covers accidental damage as well as defects) are fragile portable electronics that get carted all over the place and thus have a high likelyhood of being damaged: laptop computers, digital cameras, expensive PDAs/cellphones. I've seen too many people drop expensive electronics, or spill some kind of liquid all over a laptop. A high-end MP3 player that is hard-drive based would be another potential candidate, but they generally don't cost that much to begin with. If you're a real klutz it may be worth it for anything portable. Replacement/loss coverage for cellphones (~$5/month, then you only pay $50 or so instead of $400-500+ if you need a new one) can be worth it if you tend to lose or break them and you want an expensive high-end phone. However, be sure to check what the warranty actually covers -- for instance, batteries are almost never covered for more than a few months no matter what warranty you buy.

For big-ticket items like an HDTV/high-end computer monitor, fridge, washer/dryer... I think you'd generally be better off just spending a little more in the first place and getting a model that is more reliable and/or comes with a longer manufacturer's warranty to begin with.

I would generally advise *not* getting an extended warranty on a desktop computer or low-end peripherals like an inkjet printer. If it breaks three years down the line you'll be able to buy a comparable replacement for about what the extended warranty would probably have cost you.

Another factor is peace of mind. If you'll sleep better at night knowing your new $3000 plasma TV will be replaced no matter what for five years, a $500 warranty may be worth it even if it doesn't truly make economic sense.

Yes they're worth it. They're still a bit of a ripoff, but still worth it.

Yeah, I know. Personally, I've never had warranty expire just before something went wrong. Warranties are just insurance. Think of the things you already have insurance for... cars (but I've never been in an accident), homes (still standing after many years), health (maybe a little flab around the middle!). BUT... if something goes wrong, the premiums suddenly seem insignificant.

As a former electronics salesman, I mean "associate", we were CONSTANTLY pressured by all levels of management to push the warranties. The reason is simple: they make the company (as well as the vendors and manufacturers) money! We were offered spiffs and bonuses based on the number of warranties that we sold. If we didn't offer it, we got in trouble. Of course, the customer would ask (I hope!) if it was really worth it... I'd tell them my TRUE story...

I bought a superduper Sony amp/receiver/VCR a few years ago, and my associate offered the warranty. Since I had just laid out 500 fat ones, the extra cost of a 3 year warrnty I just considered an investment protection, yeah, like insurance in case something went wrong. About a year later, the VCR part of the Sony quit. Warranty fixed everything... parts, labor, shipping. The next year, the whole thing died when a couple of speaker wires touched wreaking much havoc inside. Warranty fixed everything. Cost of the warranty? $120. Total cost of both repairs? $160 for the first, and over $300 for the second one. At the time I wasn't making a lot of cash, and my Sony was my baby, pride, and joy. I could NEVER have afforded either repair, and definitely couldn't buy another one. I still have the Sony and it's working fine.

Today, each purchase that offers a warranty, I might buy it, or I might not. I look at the cost of the item, knowing that all electronics are uber-expensive to repair, and decide. General rule is: the more parts there are to fix, and the more expensive the item, the greater chance I'm dropping cash on the warranty. I take it on a case-by-case basis ("what would it cost to fix this sucker?").

Just bought a $700 dSLR camera. They don't break often, it has lots of parts, it's expensive. This time, I flipped a coin. Heads. Three year warranty. Same for the new $2000 laptop. Just like insurance, I hope I never have to use it.

Store warranties will often run concurrently with the manufacturer's--Making that purchase an expensive overkill. The average person won't know it either unless they do some research first.

If you shop carefully and you are a careful user, you should, in average, have better odds to have your purchased goods last longer time than those who don't.

If you then purchase the extended warranties, you pay for those who are not as smart and careful. Beside, the companies who sell insurance have their expenses and profits. You are definitely worse off if you are a smart shopper and a careful user.

I had decided to be self-insured, meaning I will pay when the unit goes bad (not their units go bad). And, so far, my theory has worked well for myself.

They are sometimes worth it if the price is right vs the price of the item, and the value of having it working! We paid about $200 for a 2 year extension of the warranty on a $3000 hdtv - when such things were a mystery in terms of reliability. On the other hand, to pay even say $10 for protection on an item costing $39 is a bit silly. Especially if the thing is easy to replace, and will likely be outmoded in a year anyway!

I very rarely purchase extended warranties. I have read that profit margins on these can be up to 80% and that they are simply not worth it in most cases.

A couple points against extended warranties: First of all, ask yourself whether you would come out ahead if you bought an extended warranty on every electronics purchase. If the answer is no, then they probably only make sense as an insurance policy on big ticket items (such as the big screen TVs and pricey laptops a lot of posters mentioned).

Secondly (and along the same lines), ask yourself what the value of your purchase will be after a year or two. Salespeople like to describe extended warranties as "protecting your investment", but this is NOT your 401K we are talking about here. Consumer electronics depreciate very rapidly due to rapid advancements in technology. Replacing your 8MP digital camera after a couple years will not cost the $200 you are spending today (particularly if you consider a refurb). Granted, extended warranties cover multiple incidents, but it seems that this scenario should be rare for higher-quality brands.

Also, a few people mentioned that you can purchase an extended warranty from Mack or another third party. I hadn't thought of this, but that's a great point - you don't have to buy the warranty from the store selling the product, so shop around! Along these lines, check your credit card since some of them offer warranty protection (probably more limited than an extended warranty, but still worth looking into).

Finally, if you are ANYTHING like me, bear in mind you will probably misplace all the paperwork after a few short weeks, in which case it is definitely NOT worth it! Oh well...

One of the rare advantages of growing old is occasionally experience is actually a good basis for decision making. On most appliances, I do not buy extended warranties. They tend to be expensive, and I generally have had very positive experiences with most appliances. The rare time every ten years I get burnt the cost of repair or replacement is less than the cost of purchasing an extended warranty on every item.
On the other hand, I tend to buy laptops and all-in-one computer units, and experience has taught me that for those items the likeliness of problems is much higher and experience suggests extended warranties are a more worthwhile expenditure.