Usually not worth it because . . .
. . . all warranties are designed to be of benefit to the one granting it, not neccessarily the consumer. They are profiting on your fear of product failure. Make no mistake, they do their research. They will base the cost of the program on the reliability of the product as a whole. They're not in the business to lose money.
Until recently I would, as a rule, not purchase an extended warranty. This is because I carefully research the products I purchase. Of course this in itself is no guarantee but you can learn a lot from the experiences of others.
While a washer or dryer is a major item I usually don't go top end. I don't usually go bottom end either but I try to avoid all the fancy gadgetry. When I've had problems with them they are usually to the point where paying to have them repaired even if the parts are covered isn't worth the time and inconvenience. That or the cost of the repair is about the cost of the extension . . . only I didn't have to fork out the money up front.
That having been said, I was helping my son purchase a used vehicle a few months back and we were hit with the same question. My first reaction was: "No, we don't need that." But I decided to hear what they had to say. The program provided coverage of both parts and labor of all items except normal wear items. It is good for 3 years regardless of mileage. It added about $1000 to the loan of the vehicle. We decided to go with it.
Was that a wise decision? It seemed so at the time. It is, as has been said, an insurance policy. But it was also one of those 'last minute', 'not thought through', 'have to decide now' decisions. Thinking on it later I realized unless you can pay for it in cash up front, you are adding a great deal of interest into the loan that makes the overall cost of the insurance much more than what it appears. If it's a reputable vehicle make it probably isn't worth it. If he has to replace a transmission, it'll pay for itself at that time. If I had to do it over again I would say "no". Because all I'm doing is paying in advance for something that 'might' happen. Why worry about crossing a bridge I may never encounter?
An extended warranty can offer peace of mind. But, if I have to pay to have someone 'come in', or for the 'labor' or have to pay to send the item for the repairs . . . it's usually not enough to justify the cost of the coverage. Add to that the fact that we live in a world where most consumer items are by design disposable, by the time a potential failure occurs your usually ready for something different or something better has come along, as in the case of computers.
Bottom line: I hate paying for an unexpected repair. But I hate more paying for one that hasn't and may never happen. If you want safe coverage, discipline yourself to create a separate operating fund that sets aside the same amount they expect upfront in that coverage. If you encounter the problem, you have that set aside to use. If you never encounter the problem . . . you've saved your money and still had the peace of mind desired as well.
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