Extended warranties worth the investment?

hd_boyMarch 25, 2009

We have new kitchen appliances. Should we be purchasing extended warranties? I'm most concerned about the touch pads, and perhaps the microwave magnetron. Any thoughts would be greatly appreciated.:

GE Cafe Refrigerator (25.6cf; SxS; Stainless Steel) CSCP5UGXSS

Jenn Air Pro Style Duel Fuel Range (4.6cf; Stainless Steel) JDS8860BDP

Jenn Air Pro Style OTR Microwave (1.6cf; Stainless Steel) JVM916BAP

Jenn Air Pro Style Steam Dishwasher (Built-in, Tall Tub; SS) JDB1255AWP

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antss

Nope

    Bookmark   March 25, 2009 at 9:35AM
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amirm

The answer was already given. But here is a good way to look at it.

Extended warranty is a form of insurance (and indeed regulated as such in some states). Insurance should be used to handle expenses you can't handle by yourself. It should never be looked at as a way to save money, against a company who has done extensive research to make sure they make money, not you!

But if peace of mind is important, here is a way to get there cheaper. As your dealer what it cost for extended warranty of all of those items. Then open a bank account and put all that money there instead of giving it to the dealer. Then if the appliances break down, take the money out of the account. To the extend they don't break down, then you come out ahead! Do this for everything you buy and pretty soon, you become "self insured" and cut out the multiple middlemen getting rich from these contracts.

Or do as I do and keep all the money in the same account as the rest of your savigs. In other words, just say no :).

    Bookmark   March 25, 2009 at 11:06AM
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davidro1

and, to top off the reasons why not, add this one:
-- when you know things about the insured entity that the insurer doesn't, you have the advantage.
e.g. health insurance
-- when the insurer knows things about the insured entity that you don't, they have the advantage for sure all the way.
e.g. product warranties

    Bookmark   March 25, 2009 at 11:18AM
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jkom51

After spending almost $800 in a single year to repair (twice) a failed circuit board in our 6-yr old Kenmore/Whirlpool gas range - which originally cost us only $960 - I would never buy another gas range with electronics WITHOUT an extended warranty.

To assume that the newest ranges are as well made as the old, non-electronic ranges, is a mistake I won't make again. The big-corporate environment is to make things as flashily attractive but as internally cheaply as possible. They have no interest in making anything that will last 30, or even 20, years.

    Bookmark   March 25, 2009 at 2:59PM
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markw

jkom51, your reaction to your situation is understandable and you have my sympathy. Everybody who comes out on the losing end of a bet wishes they could go back and bet the other way. Just realize, though, that for every gas range owner in your shoes, there are another ten out there who had no problems at all in six years. If you buy an extended warranty next time around, odds are 90% it will prove in the end to be a waste of money. As others have said, though, if an extended warranty buys you peace of mind, it may well be worth it. But that doesn't make it a good bet; there's a reason appliance dealers and manufacturers push extended warranties and it's not because it's a good deal for the consumer!

    Bookmark   March 25, 2009 at 9:01PM
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antss

................or your range's board goes out after a thunderstorm causes a surge in the grid near you. Your warranty doesn't cover "acts of god or nature". Or, the adjuster determines that you didn't adequately protect your appliance because your house has no surge protection. All warranties are different and give you certain rights under the contract, you'd better know the mice type and who is underwriting the coverage before you commit.

    Bookmark   March 25, 2009 at 9:56PM
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amirm

If you must have the extended warranty, do this, and you will get it for free or for very little money.

The thing to understand that a typical salesman makes a lot more money from selling the extended warranty than a $1000+ appliance! As you probably know, they wait until you have decided to buy something before talking you into the warranty.

Take advantage of the situation by saying that you will take the extended warranty if it is free. About 50% of the time they accept the offer! Why? Because they turn around and discount the unit by the amount of warranty and then charge full price for the warranty. That way they make the full commision which more than makes up for the reduced commision on the main unit.

Of course, there are times when they don't have enough margin or authority to make that kind of discount. But even then, they will discount the warranty (but again, take that discount from the price of the unit).

Anyway, it is always worth a try. You have nothing to lose but to negotiate. And if the person says no, that will be the end of the discussion. Rather than trying to argue why you don't need it.

As much as I don't like such warranties, at least 25% of the time I wind up with them getting thrown in the for free. And you know what? I have never need to use them! But feel good that I managed to game the system in reverse :).

    Bookmark   March 25, 2009 at 10:34PM
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luclin999

It depends..

If the item/model has been on the market for years and has a very good track record for reliability then I typically won't bother with an extended warranty.

If however the model is brand new or has several new features (especially electronic ones) which have never been in that brand/model before then I may consider it.

Case in point, 5 years ago we purchased our new Kenmore HE3 (Whirlpool duet) front load washer and dryer pair. Since the front load washer didn't have much of a history, I placed a 3 year warranty on it while not placing one on the dryer (since the dryer technology was basically the same as older models just in a new frame.)

Sure enough, I had 3 service calls out in those first three years to deal with a bad switch, a leaky valve and a buggy electronics board. Each time the tech had to replace the defective original part with the newer, corrected version that was being used in the newer machines.

That $140 for the warranty saved me roughly $750 in repair bills.

I also had the extra warranty added to my first HDTV (DLP Projector) back in 2003 (also because the technology was so new) and that $200 saved me over $500 later when the color wheel and light projector needed to be replaced.

"-- when the insurer knows things about the insured entity that you don't, they have the advantage for sure all the way.
e.g. product warranties"

Except when the product is so new that even the manufacturer has no idea how reliable the item may end up being.

    Bookmark   March 26, 2009 at 12:51PM
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monaw

I called my trusty appliance repairman when it came time to purchase my new double ovens. (I ended up going with Miele) I wanted him to tell me which appliances were good, which ones were bad. He told me he was sorry to tell me, but there are no reliable appliances being made in the US today. He said they are not built like they used to be when you and I were growing up, and that they were made out of Cracker Jack like toy parts that were intended to last around 4 or 5 years before they start to give out. ( Hate to tell you this but Jenn Air is pretty much junk. My sister has a 4 year old Jen Air double oven that she is replacing, and had a glass top Jenn Air that lasted about that long) My appliance repairman told me to stay away from them away from Jenn Air as well as some others. (Samsung) He also told me to get an extended warranty. It costs a fortune just to have a repairman step into the house!

    Bookmark   March 26, 2009 at 6:02PM
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jkom51

>>Just realize, though, that for every gas range owner in your shoes, there are another ten out there who had no problems at all in six years. If you buy an extended warranty next time around, odds are 90% it will prove in the end to be a waste of money.I don't buy them for everything, but for certain appliances I think it's a good idea. We certainly got our use out of the extended warranty on our F&P top load dryer, for instance!

I only know one person with Jenn-air appliances. My nephew bought a house last year with all recent Jenn-air appliances. The DW didn't clean the dishes, the stove broke so often even the previous owner recommended they continue with an extended warranty, and the refrig died a year after they had just replaced the DW (with Bosch) and stove (with Bluestar). So they sprang for an F&P frig as it was one of the few that would fit the built-in space.

In his case, an extended warranty on all three appliances might have been a good investment. So I don't think you can say that in 90% of the cases it's a waste of money. A look at these discussion threads indicates a fairly high incidence of problems with many brands these days. As others have pointed out, an appliance that was $1200 a decade ago would be more like $4500 (or more) nowadays. Consumers are very price-sensitive and aren't going to spend that much, on average, for just one of the many appliances they need today.

The days of the 'lonely Maytag repairman' are long, long gone. Paying more generally gets you more performance but not necessarily better reliability. Only you, as the buyer, can decide how much of your future $$ you want to risk on an extended warranty or not.

Extended warranties are like personal insurance. It does not remove risk, it MITIGATES risk. And what degree of risk you are willing to take, is always a personal decision.

    Bookmark   March 26, 2009 at 7:06PM
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ya_think

Same old question, comes up every few months. Same old replies, from those who rightfully point out that if the odds weren't stacked against you, these service plans wouldn't be offered. But IMO there's another side to the story.

Extended service plans are relatively cheap when compared to the cost of service. Which would annoy you more, five years down the road never having made use of the 100 bucks or whatever you spent, or, four years down the road having an expensive repair (ANY repair is expensive) and kicking yourself that you didn't spring for that 100 bucks?

Anyone can tell you that statistically it doesn't make sense, and I'm guessing they'd be right. But only YOU can decide which route makes you more comfortable.

That said, antss makes an excellent point about reading the fine print. In my particular case, I was surprised to learn that my five year agreement was "satisfied" after the first repair two years after purchase, and in order to be further protected I'd have to buy a new contract.

If I decided to buy contracts, I'd certainly pick and choose which appliances to insure. For the same money I'd insure a $3000 fridge before I'd insure a $700 microwave.

    Bookmark   March 26, 2009 at 7:10PM
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antss

jkom51- "A look at these discussion threads indicates a fairly high incidence of problems with many brands these days."

yes, but the vast majority of these problems come right out of the box and are covered under the initial manuf. warranty.

and..............if you buy quality brands like Miele, SZ/Wolf, Lacanche, Independant, you'll lessen your exposure to poor design and manuf. blemishes/mistakes to begin with.

Rewarding a co. with a high profit margin product to "protect" the POS you bought from them is sending the wrong message. It's kinda like folks whining the Chinese are taking over manufacturing jobs while at the same time complaining American goods cost too much and "hey I gotta watch out for MY wallet ya know"

    Bookmark   March 26, 2009 at 8:08PM
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hd_boy

Thanks to all who've chimed in. This sort of general discussion always provides helpful context. However, I am hoping for specific anecdotes about Jenn Air Pro Style and GE Cafe appliance purchases -- should any owners of those products stumble upon this thread.

I have a sneaking suspicion we should be purchasing the extended warranty on the two most expensive items:

GE Cafe Refrigerator (25.6cf; SxS; Stainless Steel) CSCP5UGXSS
Jenn Air Pro Style Duel Fuel Range (4.6cf; Stainless Steel) JDS8860BDP

I'm considering pulling the trigger on the GE refrigerator warranty simply because the product line is so new. As for the range, the often-repeated perceptions about Jenn Air's declining reputation for manufacturing quality has me wary. for the most part, I like the Jenn Air products so far, with some caveats. for instance, our old Maytag dishwasher had interior rack inserts with far superior layouts.

And already, we've had to replace the Jenn Air microwave door using the basic warranty -- within the first two weeks! The two door latches stick out over an inch from the door frame, and one of them caught on a robe sleeve and broke in half. The latch wasn't steel, as it should be, but a cheap caste metal...

    Bookmark   March 27, 2009 at 4:24PM
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antss

hd - why subject yourself to the crapshoot? Why not just get a better product, with better feedback and one not so new?

    Bookmark   March 27, 2009 at 9:29PM
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amirm

FWIW, Consumer reports rates GE fridges as the most reliable. But side-by-side units are much less reliable at 16%.

They do not have a rating for Jenair dual fuel range but do rate it at the bottom of the pile for electrics.

    Bookmark   March 27, 2009 at 10:46PM
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potterhill

We have always gotten value out of extended warranties. I get them on almost everything, including cars. Have gotten one engine and two transmissions on vehicles and multiple repairs on appliances. With the cost of a service call these days, just one gets you into a break-even position.

Mo

    Bookmark   March 28, 2009 at 9:39AM
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janicedallas

I think one should consider the original purchase price and the price of the appliance. We just paid over $2200 for a 29 cf Samsung french door. The warranty for 5 years was $79. What we hear about appliances these days is not all good so we took it.

    Bookmark   March 28, 2009 at 7:06PM
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ginih

We have a lot of power surges--Have fried the main boards on my Kenmore Elite range and Bosch dishwasher more than once. I now buy my major appliances at Home Depot where the extended service contracts are 99.00 and cover power surges. Now, I only need to hope HD is still around in five years.

    Bookmark   March 29, 2009 at 2:31PM
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lt1ignited_aol_com

@gini2: That's ridiculous. Why would the Home Depot not be around in 5 years? They're the top retailer in their industry.

Anyway, to get to the point, Home Depot's extended protection plan is excellent. It covers parts, labor, power surge, wear and tear, food spoilage (for fridges) and it's a no lemon policy. They will even replace the appliance with a brand new one if the old one isn't worth repairing. Not to mention it's only $99.99 for 4 ADDITIONAL years.

    Bookmark   March 26, 2011 at 11:32AM
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