Does this sound familiar? You walk into a major retailer, and while you’re paying for your purchase, they ask, “Would you like an extended warranty?” You say, “No, thank you,” to which they respond, “You sure? It covers anything that happens to your product for an extended period past the manufacturer’s warranty…” That happened to me, about four years ago when I purchased my washer & dryer from a major retailer. For a few extra dollars, you are told your mind will be at ease, and your problems taken care of, should they arise. I’m here, with personal experience, to warn you AGAINST extended warranties…
The full story is below, but if you’re in a rush, here are five quick points about why I will never be buying an extended warranty again…
[section_title heading=”h2″]5 Reasons to Avoid Extended Warranties[/section_title]
1.) Working with a middleman: The warranty company just acts as a middle man, and does not have your best interests in mind. You are at the mercy of someone calling you back, scheduling times between two other parties, all while trying to make a profit. When you work directly with a repair tech, you make the decisions and get all the information.
2.) Warranties are not cost effective: The time/money/energy that I’ve lost dealing with the warranty company is not worth it. I thought it would be more efficient to let someone else take care of the problems, but in actuality, it’s made each problem worse. An article I read quoted the typical profit margin on these products is 15% to 20% but businesses realize a more than 200% profit on the extended warranty.
3.) There’s no such thing as a free lunch: It sounds like a good deal to have a warranty in place that will cover you after the manufacturer’s warranty expires. My experience always felt like the warranty company was trying to maneuver more time/money/energy out of me. In hindsight, I wouldn’t even take it if it was free.
4.) My management company recommends against it: If people, who deal with maintenance on a daily basis, recommend against it, it must be true.
5.) You may be covered elsewhere: Two other common coverages are manufacturer’s and credit card warranties. Often times you’ll be double-covered if you buy the extended warranty…
[section_title heading=”h2″]My Story[/section_title]
After a year of living in my condo, I decided to get a new washer & dryer. I went down to a local appliance retailer and picked a pair up, and was talked into spending a couple hundred more and buying an extended warranty. As a homeowner, I thought not only would I get longer coverage but also the benefit of someone coordinating repairs should they arise.
A few years went by without any problems, and eventually my warranty expiration notice came in the mail. It offered me an extended (extended-extended?) warranty on the appliances for more money. I figured they were pretty reliable machines and threw the note away. A couple of weeks later, one of the buttons on the front panel got stuck making it difficult to operate the machine. I called the warranty company, scheduled a technician, and calculated that I would still be under my original extended warranty period. No problem I thought!
Two weeks, and two rescheduled appointments later, I was nearing the end of my warranty period with no resolution. I decided to be safe and renewed my warranty another couple years (SUCKER, right?!), but called the warranty company to complain. They apologized, blah blah blah, and said that the technician would be there for the next appointment. (Sure, they had my money now, of course they were going to fix it…)
Anyway, the tech did come to my condo, “fixed” the problem, which promptly broke again a few days later. I called again, scheduled an appointment, and found out a day before that my appointment needed to be rescheduled due to parts on back order. So I rescheduled, he eventually came, “fixed” it again, and then it broke again a few days later. Grrr. I was getting mad.
When I called the company to complain, they offered me a deal. I could replace my broken appliances for brand new ones and pay the difference in cost. Sounds like a good idea, especially if these keep breaking but let me tell you how this works…
I had just renewed my extended warranty (say, $200). They offered me new appliances (say, $1,400) minus the cost of my original set (I bought a clearance set that was $1,000). I would end up paying $400 for a new set of appliances, but the kicker was that my fresh extended warranty would be cancelled, and I would have to buy a new warranty for the new appliances…I decided against spending any more money and asked that they just fix it. Looking back, I should’ve just bought the new appliances without a warranty…
The tech came out, fixed them both and so I fast-forward another year without problems. June 2014, I was experiencing the same problem, so I called the warranty company for repairs again. They sent a tech out, “fixed” the problem, which broke again the very next month. This time though, it took three months to get replacement parts and a technician to fix it. By the time they did, I had already begun moving out of my place and start the process of renting it out. A couple months went by with an (assumed fixed) pair of washer & dryer, and I found a renter by October.
The appliances have never worked since. For the past six months, my management company has been wrestling with the warranty company, trying to get someone to fix the problems. They have sent multiple technicians, from multiple companies, to “fix” the problem over and over, without ever fixing it permanently. Unfortunately, this has cost me rent (in the form of compensation to my tenants) as well as losing a tenant permanently. It has been a nightmare to say the least, and one I do not wish on anyone ever.