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Are Extended Warranties Worth It?

I bought a 1 year old Ford Taurus years back for business purposes...with the miles that I put on, the extended miles was worth it. It came in very handy...it cost me about $400 for the warranty but saved me in the end as I had problems with the power steering pump, which then too out the alternator, belt and all pulleys/tensioner.

I think it depends on what you are buying when it comes to the extended warranties...is the car or appliance going to see a lot of use, or regular to minimal use. For us on a car, we never get it on new units as we don't put enough miles on. Same for TV's and appliances...but if any were to see a lot fo usage, we would consider it.
 
i work with a guy who used to be a salesman at sears. if he didn't sell the extended warranty x amount of times every month, he would get in trouble. some of the other coworkers would buy their electronics from him anytime they bought anything, and one time he told them not to even bother unless they were going to buy the warranty with it because he hadn't sold enough warranties that month. they ended up purchasing the warranty only to cancel a few weeks later. that tells me every thing i need to know about them-good for the store, not good for the consumer.
 
I agree with the main thing in buying an extended warranty, is what you are buying and how long you plan on having it before getting a new "thing".
For example, is it worth paying $40 for an extended warranty on a $200 camera? No, because more than likely you will end up getting a new one in a couple of years anyway.
It might be worth paying a couple hundred dollars on an extended warranty if that object is over a couple thousand dollars and you plan on having it for 5+ years.

For me, it always seems like when I get the warranty, the thing never breaks. But, when I don't get it, it ends up breaking in about a year. Like Cell Phone insurance, I got it with my Blackberry. So far, so good. But, I guarantee if I didn't get insurance, I would have dropped it in the toilet by now.
 
I generally don't, but I guess those of you who use the "companies make money off it" don't buy health or life insurance either... ;)
 
Racer68 said:
I bought a 1 year old Ford Taurus years back for business purposes...with the miles that I put on, the extended miles was worth it. It came in very handy...it cost me about $400 for the warranty but saved me in the end as I had problems with the power steering pump, which then too out the alternator, belt and all pulleys/tensioner.

I think it depends on what you are buying when it comes to the extended warranties...is the car or appliance going to see a lot of use, or regular to minimal use. For us on a car, we never get it on new units as we don't put enough miles on. Same for TV's and appliances...but if any were to see a lot fo usage, we would consider it.
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I put on about 25,000 miles a year for work. Have never bought one. I had one instance where a computer went to heck on an Impala I had at 65,000 miles, but the dealer went to bat for me and we got it replaced for nothing. Other then that have never had to fix something other then normal wear and tear. I've driven mostly GM's but now have a Ford Taurus with about 70,000 miles on it and same deal.

I kinda think if you put those miles on fast, there is less of a chance for a break down because the vehicle age is still relatively young. I'm getting rid of cars with 150,000 miles on them that are only 6 years old.
 
Bobber said:
I always figure if you have to buy one, you probably haven't spent enough time researching what the "best" product to buy in that category. Shouldn't need one of these if you've bought something of good quality.

I have a buddy who's an engineer who likes to buy them on cars(he likes buying GM). He seems to think he's at least broken even doing it. Can't say it would have paid on any car I've bought.

I did get one on a work fax machine once. I did have some issues with it and spent a lot of time talking to a tech who got things fixed and was no cost to me. Probably a break even deal.

On cell phones, I always keep my old one so if I fry or lose my new one(that's never happened), can use the old one until my contract is up.

I tend to avoid them like the plauge. I think they're mostly money makers for the sale people.
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So what you are saying is the people who buy them are lazy. I did a ton of research when I bought my washer and dryer. The washer I bought was rated 4.5 out of 5 stars, and was in my price range. I didn't want to pay $3500-$4500 for a top of the line washer and dryer and have been very happy with my choices. I was comfortable buying the extended warranty, and knowing if there was a problem, it wasn't going to cost me a dime. I had probably $1000 dollars worth of repairs/replacement done to my washer, the warrranty cost me $200, I think I came out ahead.
 
Three4Cy said:
So what you are saying is the people who buy them are lazy. I did a ton of research when I bought my washer and dryer. The washer I bought was rated 4.5 out of 5 stars, and was in my price range. I didn't want to pay $3500-$4500 for a top of the line washer and dryer and have been very happy with my choices. I was comfortable buying the extended warranty, and knowing if there was a problem, it wasn't going to cost me a dime. I had probably $1000 dollars worth of repairs/replacement done to my washer, the warrranty cost me $200, I think I came out ahead.
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Don't put words in my mouth...

Each to their own. I rarely buy them and have no regrets.
 
Not worth it. The Mfg warranty will cover the quality issues, then beyond that you rely on the brand and reliability reports for that type of product. Extended warranties are very high profit for the company, relative to the profit on the product. If I have problems w/ a brand beyond warranty, then I don't buy it again, like others have said do your research on the best and most reliable products.
 
JY07 said:
if it was worth it to you, they wouldn't offer it... most companies aren't in the business of losing money
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I dont agree with this line thinking. Companies are not in the business of losing money. Sure, no disagreement there. But then, why would you buy any product ever? It's because a business' loss doesn't mean your gain, and your gain doesn't necessarily mean the business is losing. It's quite possible that both you and the business can benefit from a transaction. That's pretty much the basis of a market place. The extended warranty market is no different.

Whether you subscribe to the demand-supply theory of price or some other theory, there is some mechanism by which the market price of all commodities (including extended warranties) are determined.

So to say that consumers should avoid the extended warranties market for the reason you stated is, just a bit naive IMO.
 
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ISU BET said:
i work with a guy who used to be a salesman at sears. if he didn't sell the extended warranty x amount of times every month, he would get in trouble. some of the other coworkers would buy their electronics from him anytime they bought anything, and one time he told them not to even bother unless they were going to buy the warranty with it because he hadn't sold enough warranties that month. they ended up purchasing the warranty only to cancel a few weeks later. that tells me every thing i need to know about them-good for the store, not good for the consumer.
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I worked at Sears, that is how they make "free" money! Unless you are buying a nice TV, Computer, or Lawn Mower, it isn't worth it. My parents did buy a $500 Grill, they had repairmen out 3 times to fix the burners in the 1st 2 years, the last time Sears brought them a new grill so I guess that worked out for them.

I bought one on my $1500 TV, just in case, only like $129 for 2 years, had one on my labtop, battery went out, so I got my money back from the Warranty. I usually go by the following. Anything $500 or less I don't want the warranty because I should have that easy in savings to replace the item. Anything more than that I usually get the warranty. Never on furniture, only on electronic items. I do have it on my phone, $7 per month, I have replaced my phone 1 time in 7 years, but have it just in case.

For some people $1000 may not be much to replace an item, up to you if you want to pay cash, or pay the $120 for extended years... JMO
 
BCforISU said:
I worked at Sears, that is how they make "free" money! Unless you are buying a nice TV, Computer, or Lawn Mower, it isn't worth it. My parents did buy a $500 Grill, they had repairmen out 3 times to fix the burners in the 1st 2 years, the last time Sears brought them a new grill so I guess that worked out for them.

I bought one on my $1500 TV, just in case, only like $129 for 2 years, had one on my labtop, battery went out, so I got my money back from the Warranty. I usually go by the following. Anything $500 or less I don't want the warranty because I should have that easy in savings to replace the item. Anything more than that I usually get the warranty. Never on furniture, only on electronic items. I do have it on my phone, $7 per month, I have replaced my phone 1 time in 7 years, but have it just in case.

For some people $1000 may not be much to replace an item, up to you if you want to pay cash, or pay the $120 for extended years... JMO
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So you've spent nearly 600 dollars in 7 years for the opportunity to spend 50 dollars to replace a 200 dollar phone?
 
jumbopackage said:
Depends on the phone, I guess. Most smartphones these days have a 100 dollar deductible. And even then, there are some things that insurance companies won't even pay for.

I've replaced at least a half dozen mostly expensive phones and only had to pay once (75 bucks). Even when you do have to pay, you can generally get a refurb phone for way less than list, or go shopping on craigslist/ebay for a used one that some technogeek is dumping to buy the latest phone.

It might help that I'm on Sprint (premier) and can get a new phone every year, but I've just never seen the value proposition in it. I guess I've never had to fork out list price for a new one, so that might temper my enthusiasm.
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I think the higher deductible probably is Sprint - with my insurance via Verizon, my Blackberry was only $50 to replace, same as when I replaced each of my non-smart phones. My Incredible has a $50 deductible, too. I don't generally buy much from craigslist or ebay because I don't trust either anymore after getting burned, so it's all about what's comfortable for you.
 
Cell phone insurance is questionable. Some companies are cheaper than others, like Sprint is $7 and I think most others are only $3, but I could be wrong. Usually, I will get insurance for the first year and then cancel it after that. I figure, if I break the phone after the first year, then I can get a POS loaner for cheap off the internet or a free phone from a friend and then just use that for a few more months before I can get a new phone with the rebates.

I think if you have a smart phone then it makes more sense to get insurance, because those are like $400+ to replace. And I don't really trust buying a used one off the internet.
 
Bobber said:
Don't put words in my mouth...

Each to their own. I rarely buy them and have no regrets.
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I'm glad you think I'm lazy, since you don't even know me. Let me do the math - extended warranty $200 broken out over life of washer (owned it for 4 yrs, 3 months) = 3.92 per month. Cost of two repairs $650, cost to me for repairs - $0, check received from warranty company to cover new washer $720 (pro-rated based on the age of the machine) net gain $500 (took out $20 to cover haul away of old machine).

I'm guessing you also consider insurance (life, health, auto) a waste of money too.
 
Three4Cy said:
I'm glad you think I'm lazy, since you don't even know me. Let me do the math - extended warranty $200 broken out over life of washer (owned it for 4 yrs, 3 months) = 3.92 per month. Cost of two repairs $650, cost to me for repairs - $0, check received from warranty company to cover new washer $720 (pro-rated based on the age of the machine) net gain $500 (took out $20 to cover haul away of old machine).

I'm guessing you also consider insurance (life, health, auto) a waste of money too.
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:rolleyes:

Chill out man. I never called anybody lazy. You did.
 
This thread needs some humor:

NSFW language

[ame=http://www.youtube.com/watch?v=wESrtAdYdn0]YouTube - Chris Rock - Taxes, Doctors, Drugs[/ame]
 
Angie said:
I think the higher deductible probably is Sprint - with my insurance via Verizon, my Blackberry was only $50 to replace, same as when I replaced each of my non-smart phones. My Incredible has a $50 deductible, too. I don't generally buy much from craigslist or ebay because I don't trust either anymore after getting burned, so it's all about what's comfortable for you.
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Verizon's insurance is through Asurion (as are most of the cell phone companies, including Sprint). "Advanced devices" have a 90 dollar deductible according to VZW's website, and costs between 4.50 and 8 dollars a month.
Calling Features: Total Equipment Coverage

A few gotchas too. They aren't required to send you the same type of phone you have insured. So if you had a Droid X, they can send you a refurb Incredible and call it good, since those phones are roughly equivalent.

Just gotta clear the ESN with the carrier first (for CDMA carriers..for GSM you don't have much to worry about for the most part). I've bought a phone or two off of Ebay and had no problems with them on both VZW and Sprint.

But you're right, at the end of the day, it's all about what's comfortable to you :)
 
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