I asked the wife what to blog about today cuz I was out of money ideas (it’s hard coming up with them every day! :)), and she told me to talk about warranties. Which wasn’t the most exciting thing to hear if I’m being totally honest, haha, but I did realize I’ve never actually blogged about those before ;) And people are ALWAYS wondering if they should get a warranty or not, even me at times. So I figured why not – let’s do it! (This if for you honey!)
Before I start posting away though, keep in mind I’m not gonna spend the time digging up hard facts on whether warranties are *truly* worth it or not, cuz I’d rather just ingest 10 gallons of spoiled milk instead (that’s how boring it would be!). I’m just gonna give y’all my non-professional opinion cuz I think it pretty much comes down to a personal choice anyways. And I want to hear YOUR opinions on these afterward too, cuz I know half of y’all have some real life experiences to share with us also. And I’d much rather learn from you guys than the “gurus” out there anyway :) Cool?
Okay, here are times when you may, or may not, need Warranties:
- When you buy a house. Now these aren’t the typical warranties we hear about like w/ cars and electronics, etc, but you CAN grab a small 1 year one or so (and then renew it) for a few hundred dollars. And I think it’s not a bad idea to do so – at least for the first year when you wanna make sure everything’s a-okay in that new house of yours. We did it for our first two years if I recall correctly, and while we only used it once (when our bathtub randomly stated leaking), we got a LOT out of the peace of mind. And most warranties cover all your major appliances like fridges, AC units, stoves, dyers, etc. The only other part that kinda sucks besides the yearly fee, is the deductibles you still have to pay on top of it, but again – they could really save you if something major happens that the previous owners happened to “forgot” to tell you about. This helps make it suck less.
- When you buy a car – new or used. I will ALWAYS always ALWAYS get one if they’re available to me – it’s a huge selling point in my books. My freakin’ cars break down all the time! Haha… and even when they don’t, I like knowing it’s all covered under the 3 or 5-year warranty I picked up. The only sucky part here is that it gets harder, and more expensive, to keep it going on the older cars. All new models come with one right off the bat (and even if you buy one that’s 1 or 2 years old, the warranty still transfers over to you), but when you’re talking about anything older than 4-5 years, you have to decide if the extra premium is worth it. For example, my ’93 Caddy? Def. not worth the $2k-$4k extra just to cover some parts – the car isn’t even worth that! ;)
- When renting a car (though in this case it’s extra insurance). These are the worst cuz they always tempt you and then freak you out when you’re driving around w/ out one! Haha… but in all honesty I RARELY accept these because your normal car insurance (and sometimes even your credit cards) will cover it if something should stupidly happen. I don’t personally think it’s worth the extra $15-20 A DAY to insure it even more, unless I’ll be driving a crazy amounts through large cities and/or ghettos. And you’d be amazed at some of the areas we ended up in through Love Drop last year, haha… If you ever want to know what it’s like to be in a horror movie, pass through Gary, Indiana really late at night and drive super slow ;) We got lost there last year and came across this super rundown church that had the words, “God save us all” spray-painted across the entire thing! Man that was scary. But yeah, for the most part I hardly ever add additional car insurance to my rentals.
- When you buy computers or electronics. This one’s hard because I feel like by the time they break down, you’ll probably want to get a newer one anyways around that time, or at least a cheaper one (you know most of this stuff gets better and better as time goes on). But if we’re talkin’ about larger items like computer or huge TVs, etc, I’ll usually pick up a 2-3 year warranty if it’s not too expensive. Mainly just for the security of feeling I’m extra covered just in case something happens sooner than later (most things like that are already covered with a manufacturer’s warranty, but usually people don’t like mailing things in to get them fixed, so the store’s warranty makes it super easier for you). This one’s a 50/50 call in my books.
As you can tell, most of this stuff just comes down to personal preference, and how much of a clear mind you really want. If you’re one to worry a lot about things breaking down, the extra money is probably worth it to you. If you think you’ll always be just fine and your stuff is un-breakable, then you’re probably not gonna want to shell out all that extra for “nothing.”
Did this help y’all? Are we glad the Mrs. brought it up? ;) How do you guys handle these types of warranties? I feel like I missed some other big ones too, but that’s all that comes to mind right now… leave ’em in the comments if you think of anymore. At the end of the day, though, you know yourself more than we do, and if something is worth it to you, just go for it. We’ve got enough pressures to deal with in our daily lives, so the more stress we can get rid of the better :)
(Photo by Random McRandomhead – haha…)
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Warranties are really a waste of money, particularly with electronics and new cars. New cars come with a manufactur warranty and typically last well over 100k miles with no problems, so an extended warranty is a waste.
As you stated, electronics are relatively good quality (if you buy a good brand), so by the time you use a warranty, you can go out and buy the latest and greatest.
Even a home warranty is not worth it all the time. We moved into our home in May of 2009 with a warranty and used it several time…it was worth it, but we decided not to renew in 2010 or 2011. We haven’t had any repairs and we’ve saved over $1200 in warranty costs which can now be used towards a new water heater or furnance if it breaks.
I can see where a home warranty might make more sense for people who are only beginning to transition into a new lifestyle. Renters, for example, enjoy all the benefits of a tenant’s liability for needed repairs or property improvements, but are subjected to the full cost of repairs and replacements after purchasing a home. And, let’s face it, everyone stretches on that first home purchase. It’s just the way it is.
So, for that purpose, I can definitely see why one might find a warranty to be a pretty good deal. I figure a warranty probably comes with most new constructions?
Our home warranty really came in handy when we bought our house in 2010. Several things happened throughout the year, that it was very nice to have. Of course, however, the sellers paid for it, so it was even better. We did NOT renew when we could have. We figured all the surprises were revealed in the first year, so we should just have regular maintenance now.
One thing you missed, and you will find out soon enough, is that baby gear always gets an offer of a warranty (at babies r us, at least). So, if you buy a stroller or baby swing, etc, they will try to upsell you a warranty. I think those are a total waste. Usually the manufacturer will be more than happy to replace anything defective as they don’t want a lawsuit or recall because of hurt babies. Even some baby toys get an offer of a warranty…crazy.
I definitely try to buy a warranty for electronics, they always seem to break!
One thing I have to say that helps with warranties – especially when car shopping- is to stick to your guns. I had to buy a car this past summer and I got a warranty, but they wanted me to buy this extra one that was going to cost me more. I didn’t want to pay more on my monthly payment because well… I work at a church. I don’t have that much extra cash. I stuck to my guns and they ended up giving me the extra warranty FOR FREE. (There were several levels, I pay for the level 1 but get the benefits of level 2). With this I not only get coverage for damage done to my car, but I also get free oil changes, tire rotations, etc as long as I get it done at the dealership. So that’s my advice. Stick to your guns and they’ll give you free stuff. :)
I turned down my car warranty. They wanted $2700 for it, and I still have powertrain on my car. My boyfriend and dad can do any work on it necessary, so I’m not too concerned, haha.
I never buy warranty for electronics. Or really anything, but I can see the importance.
This post was a refreshing read — usually the PF community can’t shut up about what a waste of money warranties are.
I have a warranty for my iPhone but I’m still trying to decide if I should buy one for my MacBook Air. I worked at the Genius Bar in an Apple store for over a year fixing these products, so I KNOW how often something goes wrong and who much it costs so that’s my main motivator =p the MacBook Air warranty will be $219 but that’s way cheaper than a new computer (which is what you get if they can’t fix it!) so I think I might do it.
I could see the point in having a home warranty for the first couple of years. A lot of the stuff that can go wrong in a home can be quite expensive. I bought a extended warranty on my vehicle when I purchased it, although it wasn’t too pricey. If I ever rented a vehicle, I would for sure get the coverage, you never know what could happen.
The only warranty I normally never purchase is the warranties on electronics. I normally purchase computers on the cheaper side, so buying a warranty on a $400-600 computer doesn’t make sense to me, especially when I’ll probably be replacing it in 3-4 years. If I bought more expensive ones like an aaple then maybe I would consider it. My thinking on electronics is that the manufacturer knows that the probablility of their product breaking during the warranty period is pretty low. Thats why they offer the warranty in the first place, to make extra money. They expect low use of the warranty compared to how many they sell.
I think it’s good to buy a warranty on the washer too – those things can break down like nothing!
If something I buy has a warranty, great, otherwise it really isn’t a big deal (you forgot to mention some credit cards will double the manufacturers warranty on items). I prefer to be my own warranty by saving the money and placing in the emergency fund. More times than not, I end up “winning” this way.
A home warranty for 1 year only if the seller pays for it. Everything else nope.
I bought a CD from Best Buy recently and they offered and extended warranty on it. I couldn’t believe it. It was a $12 purchase!
@I Am 1 Percent – Yep! Though you coulda had bad luck w/ the last cple years on that house too ;) Def. glad you didn’t though.
@Einstein – Yeah, great point on first time home buyers – that $hit is scary! haha…
@Nicole – Oh, good call! Never even thought of that (obviously). I’m pretty sure we’ll just find a used replacement anytime something new breaks anyways, so yeah – I wouldn’t pay the extra money either I don’t think.
@Michelle – Even things under $100ish?
@Emmy – GOOD JOB Emmy!! I’m proud of you :) I CAN’T STAND when they try and bully people and upsell them, it drives me wacko…. I had to politely tell a guy the other day to quit it when furniture shopping cuz he just wouldn’t stop. It can get ridiculous at times.
@Daisy – I need to be trained in more “boy” stuff – I suck when it comes to fixing things ;)
@Bridget – Hey, we gotta tell it the way it is right? :) I think you’d be a lot happier & calmer w/ that extra warranty in that case – computers break down all the time and it BLOWS. Esp if it’s one you really really REALLY like. So I never have a problem with that stuff. Go w/ your gut!
@Stan – Haha, yup! It’s totally a better business decision on their end ;) It’s like gambling – odds are against you, but every now and then you hit the jackpot! (Or in this case, the break-down)
@Aaron – I’ve never bought a dryer or washer or fridge or any large appliance brand new yet, so I wouldn’t know :) Oh wait…. I take that back – we got a new stove once. And I don’t *think* we got a warranty?
@Brian – Not a bad way of doing things at all, good sir.
@Matt – WHAT???? Haha… no way, you’ve got to be joking. Maybe they think it’ll break when you “digitalize” it later ;)
I never buy any additional warranties. My philosphy is this: if I am getting a quality product, it should come with some kind of warranty already. Additional warranties is a waste of money. Just don’t spill anything on your stuff, throw it around, and you should be fine.
I have a nuanced perspective on warranties.
1. fragile electronics (i.e anything that the kids will use): I almost always spring for the comprehensive replacement plan. I have used it several times. Nintendo DS, iPhone, iPad and an Acer netbook have all been resurrected by this. in all but one instance I got a brand new device. It is not worth worrying about these things.
2. extended auto warranties: I have a Hyundai with a 10 year/100k warranty, a fleet of Toyotas and Hondas that are 3y/36k and a few that are out of warranty completely. I find that if you buy a reliable brand to begin with (Consumer Reports is your friend) you will have little problem. Oh and never, ever buy the first year of a new model. That is the “working the kinks out of the new design” model year and even Lexus, the gods of reliability, flounder here sometimes.
3. Home Warranty: never had one. I always buy homes that are ‘thoroughly tested’ :)
In general I believe you should self-insure most things. Buy used for everything you can and if you ever have to pay for a repair or replacement you’ll have the money to do so.
Just make sure the warranty company is reputable!
When we purchased our condo, we bought a warranty to cover the air conditioning and the fridge (arguably, we really didn’t need to buy one for the fridge as we both made enough that replacing/fixing it wouldn’t have been that big of an issue). Naturally, the air conditioner broke down within weeks of us moving in (not really blowing cold air, excessive condensation on the part of the unit in our house that ruined the ceiling in our hallway). Nevertheless, when we tried to claim our warranty, the company sent folks out to inspect, and they determined it was a pre-existing condition (even though the a/c had been blowing cold air when we checked the place out), and they therefore would not pay to have it replaced.
So, to be clear, the warranty company was willing to take our money when we purchased the warranty, but they were unwilling to do what they were supposed to do (fix the a/c). Further, I tried to get them to refund what we paid in the warranty, and they basically refused (my argument was basically it seemed like there was no scenario in which they would fix the a/c, so it seemed at least disingenuous, if not downright criminal, for them to take our money and not fix the unit).
On the more positive side, my wife’s dad encouraged us to buy the extended warranty when we bought a used car (he, like you J. Money, has the worst luck with cars). We bought it (even though I thought it was a waste of money — how wrong I was!). After owning it for about a year, my wife came home and said that coolant had exploded all over the engine and that the engine was steaming/smoking. It turned out that the radiator had cracked and needed to be replaced. Carmax, true to their word, replaced the radiator for the cost of our deductible ($250), as well as fixing the cd player which had also stopped working.
If it’s useful info, we paid $1800 for the policy (five years or 50k miles). According to the parts and labor costs on the invoice, it cost the dealer $1200 to fix it (it could be argued that we, without the warranty, would have had to pay more since we probably couldn’t have gotten the cd player and the radiator fixed at the same place, plus the dealer probably gets some discounts because of how much business they do that we would not have received), so I guess we’re technically still out $850 ($1800 + $250 – $1200 = $850), but I wouldn’t put it past the car for something else to randomly break.
And…that is everything that I think about warranties. :-)
I bought the extended warranty on my Nissan which came in handy when they replaced the engine for nothing in year six. I also bought a dell laptop in June 2004 with three year warranty. A technician came to my house in January of 2006 and replaced the motherboard, harddrive etc and the laptop lasted until June 2010. I replaced it with a much cheaper HP laptop from Costco. Costco doubles the manufacturers warranty from one year to two. I feel like if I get two years of life out of this laptop, the I got my moneys worth.
I never buy warranties for ipods, cell phones or toasters, but if the item is over $1000 I am more likely to buy the warranty.
I think it’s always a cost/benefit analysis. If I’m prone to accidents and it’s inexpensive, sure, I’ll buy it. If the chances are low and there’s no reason for me to not think of myself as “normal” (no matter what the haters say….), I’ll forget it.
By the way, check again on the rental car coverage. I used to always waive it. Once I did a story for a client on the topic, it can get WAY ugly. Credit card companies often REFUSE coverage or make it difficult to get (even though they say “you’re covered”).
Every consumer advocate will tell you to NEVER buy a warranty for electronics. I agree! I suggest buying items that standardly come with a 2 or 3-year warranty. For example, it is easier to find a business model laptop that comes with a 2 or 3-year warranty at NO extra cost. I still have a business desktop that has been working with no problems for 5 years now. Also, keep in mind that some charge cards, such as the Platinum AMEX Charge Card automatically extends the warranty of anything you buy by a year. It automatically replaces those items if stolen (I believe in the first 90 days). Even though it comes with a $400 annual fee, the fee pays for itself. For example, I receive $300 gift certificates for stores (no catches).
We picked up the extended warranty for our DSLR when we bought it because it covers the “what if the baby picks it up and throws it on the ground?” scenario. Which is *highly* likely. We tend to get more warranties now that we have a kid.
Oh, side note J. Money! Keep in mind all the warranties for baby stuff an when they come due. Breastpump, baby mobile, baby monitor, sleep sheep. We’ve had to replace them *all*, while under warranty.
You reminded me, I need to send out the beard trimmer my wife ruined by using it on our bloody dog.
And yes, I read the warranty, nowhere in all that little print does it say, will not fix due to use as a veterinary implement.
i almost never buy warranties.. i had an experience that kinda spoiled them for me.
i bought a new car from a company that advertises themselves as having “America’s Best Warranty”.. the warranty was supposed to cover the powertrain for up to 100,000 miles. At 55,000 miles, the gauge that determines when it needs to inject anti-freeze malfunctioned and stopped injecting coolant. This caused the engine to meltdown, which was just nasty.
When I filed my claim, the company fought it with everything they had, and refused to pay up. The warranty had been a major selling point for the car, and it was pretty devestating that they wouldn’t honor it. (for no good reason)
There might be a warranty I would buy, but I can’t think of one right now. I believe that warranties are for the profit of whom you are paying, and you have no right to define what you get for that money. When time comes to use it, what you get is up to “them”, not you. I don’t like it when I’m encouraged to buy a warranty for a computer, because I don’t like giving away free money in exchange for a fear-based sales pitch – and free money is what I think it is, to those collecting for selling warranties. I suspect that places like Best Buy and Staples pay nice commissions to those who sell warranties. And warranties are a couple of hundred dollars or so for a house, right? We are supposed to think that is cheap insurance, when in fact, I think it is worthless. I do value a couple hundred dollars, and so do “they” – multiplied!
I think home warranties are very helpful in new homes because they haven’t been “broken in”. If the builder missed something accidentally or used poor quality materials, you’re covered. Most older homes will come with lower expectations, though, and you or a home inspector can usually see wear and tear (like where the roof leaked and stuff like that). But if the seller’s paying for it, by all means, a warranty would be a great perk!
We’re generally not a big fan of warranties, but when our first front-loader washer died after just a few years, we decided to get the extended warranty on the new washer. We’ve had the new one for less than 2 years and have had 2 service calls on it (both fixed, free of charge), so in that case it’s been worth it. But I don’t think that’s the norm.
Extra warranties on cars are a total rip off. I’ve had one in the past, my brother has had one and people I’ve known have had one and the warranty has NEVER paid for anything and found every excuse to get out of paying for it. The times when they do pay are the exception instead of the rule as far as my personal experience goes. I have never met a person IRL where the warranty has actually paid for anything. Honestly… paying 2-3K for a warranty might as well be put in the bank and used for any future repairs… you are way ahead by doing that in my book.
I used to never buy warranties…that is until my flat screen died right after the manf’s warranty ended. It was a significant chunck of change to replace that I said…why didn’t I just get the warranty?” So, now anything over a few hundred bucks, I get the warranty.
I’m surprised how many people don’t know about not needing extra rental car insurance. The rental agents do such a good job of selling it that it’s hard to turn down. Meanwhile it’s completely unnecessary for most people!
Many many years ago (whenever I was just getting nerdy enough to start caring about this stuff) I heard Clark Howard say not to buy the warranties and if you have to replace a thing or two here and there you’ll still most likely come out ahead. I took it to heart and in the decade and a half or so since then I have had to replace one (bigish) tv that got fried long before it’s time, and had one smartphone have an early demise on a boat ride (but a friend gave me her old blackberry so that replacement was free!)
SO – I figure if I had been insuring everything all that time I would have spent WAY more than the $600 for that new tv. Knocking on wood that all my stuff doesn’t break tomorrow!
@Aloysa @ My Broken Coin – Haha, that’s all. My drinks are always spilling on something! ;) But I agree – I rarely get extra warranties on electronics either, except for major ones.
@WR – I like it! Great way to go for sure, I”m a huge fan of never buying the 1st year model too. Actually brand new cars to begin with. The closest I’ll come is buying one that’s 6 months old so all that depreciation is already gone ;)
@Bryan at Pinch that Penny! – Haha, nice and detailed, thank you sir :) Love hearing about all these stories, even the nasty ones cuz it reminds us to remember that not all people/companies are decent human beings. Which is sad, because you can be even MORE successful by merely being up front and honest with people – a lot of companies fail to realize that and/or don’t want to put in the hard work to make revenue that way. Much easier and faster to be shady about it. Same goes for theifs – I despise them. But that’s a whole other topic for another day, cant get fired up right now ;)
@KimmyQ – Well that’s nice of Costco! I agree – 2 years of working well is a-okay in my books, by then the technology is crazy old anyways ;)
@AverageJoe – Good to know! I’ve never gone the c/c route, but once I came close to having to use my own auto insurance to cover some broken mirors I ripped off of the rental van by accident ;) I think in the end I lucked out and was fine (can’t recall exactly- it’s been a good 10+ years), but I think that’s the way I’d go in a worst case scenario – using my own insurance over my credit card’s, but I’d still check to be sure.
@T. Thema Martin – Hey! I was JUST thinking about that Platinum card because I have a Visa Black Card offer sitting on my desk here :) And was wondering what the main difference was between the two… haven’t Googled it yet (thx for the reminder!), but I know the Black Card is already $100 more expensive/year… glad the card is working well for ya! Queen bee ;)
@Kris @ SimpleIslandLiving – Woahhhh, really? That’s crazy! And if that’s all from the baby doing something funky, then I def. need to pay attention cuz there’s an equal chance I’d break or drop something too! Haha… though we’re hoping to get most things used for that reason (NOT the breast pump though, haha… freaky!)
@bax – HAH! I’m sure you’re not going to mention it anyways ;) Though they’l probably wonder what the hell kinda hair you have if they find dog stuff still in it! Haha…
@jefferson – Oh man, I’m so sorry to hear that :( That freaks me out about warranties too – they always seem soo much shadier than they do good, ya know? It’s frustrating for sure. What ended up happening? Did you have to pay for everything?? I hope things are better now man. Really really f’d up.
@Yana – Haha yup! In the end it’s always a smart business decision on the company’s end – but it still doesn’t mean it can’t come in handy at some point ;) You’re right that it feeds off of your fear though, that’s a great way to put it. Thanks for commenting, friend!
@Christa – That was the only thing we *didn’t* get our sellers to cover, but we were more than happy to do it ourselves since they put in $20,000+ in other areas, including paying for all closing costs, hehe…
@Julie @ Freedom 48 – Woah, yeah – that’s weird? Crazy how a brand new machine can break down TWICE like that so early on? Glad you got that warranty for sure!
@bobbi – Unfortunately I think you’re right on the money with that one :( I don’t know anyone either who has actually gotten anything covered in one of those outside warranty places… only those straight from the dealership. Which are a pretty penny in comparison!
@BusyExecutiveMoneyBlog – Ouch. Sorry to hear that, friend. Maybe it happened to save you from something BIGGER happening down the road!? Though I def. hope not, haha… thanks for sharing your story!
@The Frugallery – Yep! I think it’s best for those who need 100% piece of mind really. Even when I decline it, telling them I’ll just use my own auto insurance that covers rentals too (Yeah USAA!), it still freaks me out that I’ll get a “ding” on my report if I ever end up using it like that. When you use the rental car’s insurance it’s totally off record (at least to my knowledge). Still not worth the money adding up over time, but I can understand those who like paying for that extra peace of mind.
@Good Cents Savings – Haha, you’ve got good lucky my friend! Hope it continues on! :)
PS – what happened to getting comment notifications by e-mail? Have I accidentally blocked the feature?
Nah, you didn’t do anything – it started breaking my site out of nowhere :( Every now and then these plugins get wonky and I have to deactivate them and look for new ones, sorry. Just tried it again now before posting this, and it was still broken :( We’ll see if I can find a better one soon!
We bought an extended warranty on the new LCD TV we got last year…but only because it was a deeply discounted open box special, and the “real” warranty was pretty much voided by that. Even with the additional store warranty purchase, we saved hundreds of dollars over buying a “closed box” TV. (We did make them test it in-store before we bought it though!)
I’m in IT and have built my last couple desktops, so there’s no warranty to purchase there…but I have used the standard manufacturer’s warranty for the components I bought, specifically hard drives. Certain hard drive manufacturers have excellent warranties and return policies – just run a test to grab the failure code and they will send you the same (or bigger) storage capacity replacement. Nice! When it comes to laptops, I do recommend that many folks do purchase an extended and/or accidental protection warranty – I’ve seen too many people spill coffee/wine/tea on their laptops or drop them and be SOL. Unless you have the cash to replace that laptop if it meets its doom, or unless you’re tech-savvy and can fix it yourself, get the extra warranty!
Haha, oh yeah – I literally spilled coffee all over my keyboard just this morning! Thank goodness it wasn’t the hard drive :) Pretty smart on the open-box stuff too. We picked up our new stove that way too a few years ago. The floor model got us an extra 25% off ;)