Extended warranty on appliances

[joenorm]

I have a last chance offer to extend the warranty of a rather expensive Bosch DW for $180. This would cover the unit for 4 years and is half the price of a single service call.

The dishwasher was around $1200 new a year or two ago. I had to get the expensive one due to supply issues.

Any thoughts on buying these warranties? I live is a rural area so repair people are few and far between.

thanks

[cool7hand]

This post should help sharpen your thinking: https://www.consumerreports.org/cro/extended-warranties/buying-guide/index.htm.

We never buy them.

[affordablehousing]

Just say no to irrational fear.

[terran]

Extended warranty's are a form of insurance. Insurance has a negative expected value since the insurance company needs to make a profit, so the amount they charge is greater than the amount they expect to pay out on average. This doesn't mean you shouldn't buy insurance, but rather that you should buy insurance only when the thing you're insuring against would be difficult or impossible for you to afford. You're effectively paying a fee to protect yourself from an unlikely event that would disrupt your life.

You should definitely have life insurance that covers your obligations until your savings can fill that need; health insurance against healthcare that can run millions of dollars; homeowners/renters/auto liability and umbrella insurance against liability for people injured and property damaged by you or your property that can run millions of dollars; probably homeowners property insurance against damage or destruction of your home that can run hundreds of thousands of dollars; and maybe auto insurance against damage to your car that can run tens of thousands of dollars, although a much less compelling argument here, especially as a car gets old. I have yet to hear of renter's/homeowner's insurance without personal property coverage, so that's basically a mostly unnecessary freebie that comes with the necessary liability coverage.

Insurance against a $360 service call or buying a new $1200 appliance, though? Probably not necessary for most mustachians, although that's a determination only the individual can make. Even if you can afford the repair/replacement it's fine to still buy the warranty if that's what makes you comfortable. People make all kinds of mathematically suboptimal decisions because it feels right to them, like paying off a low interest mortgage, and that's just fine if it's worth spending the money on for them.

[GuitarStv]

Fuck no.

[solon]

Take that $180 and put in one of your own accounts. Do that every time you're offered an extended warranty. Before long you'll have a huge self-warranty fund, only the money is still yours and you're earning interest on it.

You'll also be amazed at how much money you would have paid, and at how infrequently you actually use your warranty fund. These things are great money makers - for the sellers.

[joenorm]

Thanks for all the replies. Seems like a consensus here to not purchase these in general.

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty. Even better I wish a company could warrant an appliance for 5 years with the purchase price. They don't seem to be made like they used to be.

I like the idea of investing that money each time a warranty is offered.

 

[seattlecyclone]

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty.

Sure, you had a thing fail early. That's no fun, and also should be expected sometimes. How many products in your home have lasted several years with no issues? If you had purchased extended warranties for all of them would you have come out ahead or behind?

[Syonyk]

Fuck no.

++

$180 is an awful lot of parts and tools for doing your own repair.

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty. Even better I wish a company could warrant an appliance for 5 years with the purchase price. They don't seem to be made like they used to be.

"on the outs" - it's failed, making noise and failing soon, just don't like it, ?  Either it's keeping stuff cold or it's not, there's not a huge middle ground on fridges.

Five years is about the service life of modern appliances until minor repair, based on our experience - I've had screwdrivers into most of our home appliances in the last 5 years.  At no point have I ever thought, "Wow, I wish I had a warranty."  Washer drain pump, deep freezer thermostat (get a temperature monitor on those things for early warning), stove infinity control, I need to swap out a valve in the dishwasher and possibly a pump motor that's intermittently squeeling, and I replaced the nylon drive gear in the mixer, though that was my fault - overloaded it.

I'm not a huge fan of it, but it's an awful lot cheaper than replacing the stuff every time anything goes south on them.

As for "investing the warranty" - why?  If you're still pants on fire in debt, put it towards your debt.  If not, just cashflow the repairs.  I don't keep a separate budget item for appliance repairs, I just buy the parts if I need them.

Or find some good used appliances.  If it's lasted a few years, it's out of the early failure part of the bathtub curve.

[nereo]

Or find some good used appliances.  If it's lasted a few years, it's out of the early failure part of the bathtub curve.

Absolutely no to the extended warranty.  But I'd strongly agree finding some good used appliances. Kitchen appliances are one area where one can find almost-new, very good units for a small fraction of what they cost new. People buy homes and gut brand-new kitchens to get "the look" they want. People move and decide it's not worth it to move their appliances (too big, too heavy). 

Can't tell you how many $1,000+ dishwashers or $2,000 fridges I've seen offered up for a hundred bucks (or less) if you can show up with cash and a truck. bought every appliance in three different homes this way.

[bryan995]

We buy them all the time - though only ever through Costco (for the 7 years of coverage).

We run the dishwasher almost daily. And do 5-7 loads of laundry a week.
For appliances under such heavy use I feel the cost is worth it.  Something is bound to go wrong in 7 years. Appliances are made quite cheaply now .. unfortunately.

Eg take a dishwasher, 7 years of almost daily use is ~2,550 4-hour cleaning cycles.
Or 10,200 hours of use. Insurance is only a $89 bet? To be fully covered for anything for the next 2550 days?  I’ll take that bet. Will likely save me both time and money.

Plus buying via Costco is basically a warranty program in itself. End up with a dud/lemon? Just return it!

Example warranty coverage:
Year 1 - Costco Concierge (Manufacturer)
Year 2 - Costco Concierge (Costco)
Year 3 - Allstate
Year 4 - Allstate
Year 5 - Allstate
Year 6 - Citibank
Year 7 - Citibank

*If you purchase a television using a Costco Anywhere Visa® Card for the transaction and also purchase an Allstate Protection Plan, the total warranty coverage is 7 years (the first 2 years through Costco Concierge, the following 3 covered by Allstate, and the final 2 years covered through Citibank.

[kina]

Thanks for all the replies. Seems like a consensus here to not purchase these in general.

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty. Even better I wish a company could warrant an appliance for 5 years with the purchase price. They don't seem to be made like they used to be.

I like the idea of investing that money each time a warranty is offered.

Is the refrigerator a Samsung? Their refrigerators are the only thing I would give a 'yes' to extended warranty.

[maisymouser]

Thanks for all the replies. Seems like a consensus here to not purchase these in general.

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty. Even better I wish a company could warrant an appliance for 5 years with the purchase price. They don't seem to be made like they used to be.

I like the idea of investing that money each time a warranty is offered.

Is the refrigerator a Samsung? Their refrigerators are the only thing I would give a 'yes' to extended warranty.

+1

Heavy cursing is not the preferred style of this forum so I will save the swearing for somewhere else, but Samsung refrigerators are the worst. We moved into our new place which has one and I can tell you, it's totally horrible. We have to literally defrost the entire unit at least once a quarter since they are designed so poorly and result in ice buildup at the back of the unit. I think there's a whole thread on Samsung fridges here. They are notorious.

[sonofsven]

Thanks for all the replies. Seems like a consensus here to not purchase these in general.

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty. Even better I wish a company could warrant an appliance for 5 years with the purchase price. They don't seem to be made like they used to be.

I like the idea of investing that money each time a warranty is offered.

What brand?

[YttriumNitrate]

I have a last chance offer to extend the warranty of a rather expensive Bosch DW for $180. This would cover the unit for 4 years and is half the price of a single service call. The dishwasher was around $1200 new a year or two ago. I had to get the expensive one due to supply issues.

For what it's worth, my ~10 year old Bosch dishwasher broke down last month in the week before Christmas. It started displaying error codes that through some quick Googling I found out to mean that water was leaking. Sure enough, I took off the front cover and there was water in the catch basin. Next, I watched the underside of the dishwasher for about 10 minutes to see where the leak was coming from (it was the inlet valve). Googling the model number I was able to find and order the part I needed ($6 on eBay). Watching a few YouTube videos showed to access and replace the valve. Overall, I'd say I spent about 3-4 hours fixing the thing, and now have a much better understanding of how to fix dishwashers.

bryan995 is right that appliances aren't made to last like they used to, but the tools we have available for DIY repair are incredible compared to just 20 or 30 years ago.

[LateStarter]

Much as terran said . . . .

That extended warranty cost has been calculated to deliver a healthy profit against known product failure rates and known average repair costs. I once worked for a major UK consumer electrics/electronics retail chain, and more money was made from selling extended warranties than from selling products. That was ~20yrs ago but I don't suppose things have changed very much.

In any case, it falls under the general rule of "don't insure against an incident that you could manage anyway".
Over the long term, the choice is: 1. occasionally pay an incident cost; or 2. pro-rata pay average incident costs + insurer profits.

[cool7hand]

bryan995 is right that appliances aren't made to last like they used to, but the tools we have available for DIY repair are incredible compared to just 20 or 30 years ago.

Amen

[joenorm]

Thanks for all the replies. Seems like a consensus here to not purchase these in general.

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty. Even better I wish a company could warrant an appliance for 5 years with the purchase price. They don't seem to be made like they used to be.

I like the idea of investing that money each time a warranty is offered.

What brand?

The Fridge is an LG and to be fair saying it is on the "outs" was a little indulgent on my part. The compressor has been louder lately which gives me images of a breakdown. Some days are better than others for it and when I smack it, the compressor usually quiets down.

[Syonyk]

It's almost certainly something a bit loose that's rattling, and smacking things makes it not vibrate anymore for a while.  Poke things until you find what's vibrating - it's unlikely to be in the compressor.

[sonofsven]

Thanks for all the replies. Seems like a consensus here to not purchase these in general.

I think I am particularly sensitive to the topic because I have a two year old fridge currently on the outs and I do wish I had the warranty. Even better I wish a company could warrant an appliance for 5 years with the purchase price. They don't seem to be made like they used to be.

I like the idea of investing that money each time a warranty is offered.

What brand?

The Fridge is an LG and to be fair saying it is on the "outs" was a little indulgent on my part. The compressor has been louder lately which gives me images of a breakdown. Some days are better than others for it and when I smack it, the compressor usually quiets down.

Thanks, I haven't heard good things about LG refrigerators, sorry to say.

[Retire-Canada]

The Fridge is an LG and to be fair saying it is on the "outs" was a little indulgent on my part. The compressor has been louder lately which gives me images of a breakdown. Some days are better than others for it and when I smack it, the compressor usually quiets down.

When I bought a house in 2010 the old fridge made a bunch of loud noises and my GF proclaimed it was dying and we should replace it. I said no. I sold it with that house in 2021. It still made a lot of noise, but the food stayed cold and the freezer froze stuff.

I wouldn't worry about it. When it breaks deal with it then.

[terran]

It's almost certainly something a bit loose that's rattling, and smacking things makes it not vibrate anymore for a while.  Poke things until you find what's vibrating - it's unlikely to be in the compressor.

I was cleaning the coils on a fridge once. There was a little plastic pippy, the only possible purpose of which that I could think of was to come loose and rattle creating the need for a service call. I'm only kind of joking.

[joenorm]

The Fridge is an LG and to be fair saying it is on the "outs" was a little indulgent on my part. The compressor has been louder lately which gives me images of a breakdown. Some days are better than others for it and when I smack it, the compressor usually quiets down.

When I bought a house in 2010 the old fridge made a bunch of loud noises and my GF proclaimed it was dying and we should replace it. I said no. I sold it with that house in 2021. It still made a lot of noise, but the food stayed cold and the freezer froze stuff.

I wouldn't worry about it. When it breaks deal with it then.

I'm not "worried" per se. But it's basically a new appliance in a new house and I hate unnecessary noises. My parents have the same fridge they've had for 25 years. I really do think they were just made better back then.

[Syonyk]

I'm not "worried" per se. But it's basically a new appliance in a new house and I hate unnecessary noises. My parents have the same fridge they've had for 25 years. I really do think they were just made better back then.

You're busy justifying how to replace it, so...

As for older stuff, be aware that there's some survivor biases going on - the 50 year old stuff that's still running today is the stuff that lasted.  You're not seeing the stuff that leaked out coolant in 3 years or something and has been recycled several times over since then.  But, yes, the whole "planned obsolescence" approach to engineering is a bit more recent (as opposed to "if the part never breaks, you've made it too strong," which I believe goes back to Ford).