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Extended Warranty Option On Appliances
by Ruby Bayan

On impulse, I agreed to a three-year extended warranty on a CD player from one of the well-known appliance stores. Two years after the purchase, despite utmost care, the CD player malfunctioned. Naturally, I availed of the extended warranty for free repair. After a couple of months, the repair center said they couldn't fix the problem and sent me a brand new unit.

I felt lucky that I chose to take an extended warranty for a CD player that conked out within the covered period, but for the other appliances that remained in good condition long after the warranty elapsed, I felt that I wasted a lot of money.

When I thought about it, because electronic products and home appliances have become more and more reliable with innovative manufacturing techniques and technology advancements, only very few "lemons" ever make it to the consumer and break down within two to three years from purchase. Extended warranties, I thought, are just expensive assurances against the very slim possibility that the one lemon out of a million identical products did find its way into my hands. I discovered recently that some experts agree with me.

Not Advisable

Consumer Reports, one of the well-known reviewers of consumer product performance is advising buyers to resist the offer of extended warranties. These are their reasons:

  1. By the time the item breaks, the cost of the extended warranty will equal the average repair cost for the covered product. This makes sense because extended warranty costs are proportionate to the value of the product.

  2. Most manufacturers, guaranteeing the reliability of their products, already warrant at least a year's coverage on service and parts, making the extended warranty offered by the dealer a redundancy. Customers should, therefore, inquire on what manufacturers cover before availing of dealer warranties.

  3. If the customer is buying the product using preferred, gold or platinum credit cards, it's possible that the card issuer is also covering purchase warranties. It's best to double-check on these perks before agreeing to extended warranty options.

  4. Some manufacturers offer warranty extensions, allowing the customer to continue warranty coverage beyond the standard warranty expiration. Extended warranties from dealers would be unnecessary.

  5. Many manufacturers, especially those of electronic products, release new models quickly, so instead of having an old audio component repaired, the customer may prefer to buy a new one despite the warranties.

  6. Almost all appliances have reliability ratings and life span estimates that practically guarantee that repair services during standard and extended warranty periods would hardly be required. For example, major appliances are known to last for 10 to 18 years, and audio-visual electronic equipment normally remain in good condition for five to fifteen years.
Special Cases

There are special cases, however, that Consumer Reports considers reasonable exceptions:

  1. Trouble-prone equipment, like video cameras, laptop computers, and projection TV sets, can be very expensive to repair. In this case, a moderately priced extended warranty might be worthwhile.

  2. Retail stores aggressively sell their extended warranties because they say that it's easier to bring a defective product to their local repair centers than ship it to its manufacturer, which could be halfway across the planet. It makes a lot of sense.

  3. Some retailers also include home service in their extended warranty offerings, which makes the coverage totally justified.
All of these considerations should, therefore, weigh into the decision on whether to avail of extended warranties or not. Of course, no one can be absolutely sure when a home appliance will decide to act up, but well, like me, anyone could get lucky.

For more information on home appliances:
How to Buy an Energy Efficient Home Appliance
Energy Star Appliances

[First published at, 2000]


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