I made a vow about 20 years ago to NEVER do extended warranties. Ever, on anything. Not on cars, not on appliances, not on HVAC systems, not on electronics, not on anything! Never ever agreed to paying for an extended warranty for the last 20 years.
My philosophy is that when you make this decision, you have to be all-in or all-out to make it work in your favor. Meaning, never ever do any extended warranties. Ever, on anything and the money you save overall will more than pay for the few times you actually would use an extended warranty.
I figure extended warranty prices are set by a dude with a pivot table spreadsheet, wearing a pinstripe suit, sitting in a high-rise office in NYC. He knows the failure rate of his products and knows exactly where to set the extended warranty pricing to maximize profits. Yet, rarely have to pay a claim. Or, at least only pay claims on some acceptable standard deviation. That's my theory. The fact is extended warranties are extremely profitable for businesses.
Examples where I skip the extended warranty are electronics, TV's, coffee machines, cars, tires (its called Road Hazard Warranty), home warranties, etc.
Another reason I skip them is they often have deductibles. And, many Home Warranty services are merely experts in telling you how your particular issue is NOT covered. Same with some car warranties.
So, after 20 years of making this vow, how did I do? I had a TV fail 14 months after I purchased it. It came with a standard 12 month warranty. I did not buy the extended warranty. I got burned on this purchase. So, I took the TV back to BestBuy. They refused to negotiate, replace the TV in good faith, or even offer a discount on a new one. So, I stopped shopping at Best Buy. Haven't been there in nearly 2 decades. That was a $120 TV. No big loss and it was a tube type TV this is old school now anyway.
But, nothing else I've purchased in this timeframe has required a repair that an extended warranty would of covered. So, I figure I'm way ahead financially.
Full disclosure, I work a desk job, but, I'm pretty handy with a tool box. Still, I've had to deal with very few "covered" product failures. Products do fail, but its typically after any extended warranty coverage would of expired. I haven't had my paint clear coat fail on my car... Haven't had my cordless drill fail within 12 months of purchase... Haven't had the need to replace the glass coffee pot (yes, I was offered a replacement warranty on the glass pot)...Haven't had my 30 year Timberlane shingles fail in the first 24 months... Road Hazard warranty??? I have 3 cars, two boats, and a camper. I've had about 6 flats in the last 20 years. I plugged them all, filled the tired and moved on. I've never had a sidewall puncture that a Road Hazard warranty would benefit. Those warranties are about $10 to $20 per tire. I skip those warranties. Instead I use a plug kit to repair the 6 or so flats I've had over the last 20 years at a cost of about $10, in total. There's easily $300 to $400 in savings.
Bottom line: I think extended warranties are a complete waste of money. But, there will be failure on a product at some time. If you don't buy any extended warranties, I think the money saved overall, will more than pay for that failed product. Its an odds play. I've had success playing those odds.
I recognize everyone is not the same. I recognize someone, somewhere used an extended warranty to save on a $3000 repair. That's good. I've had $3000 estimates for warranty covered items. The dealers jack up the prices on warranty work. It likely could of been repair for lesser amounts. i.e. I have a Cadillac that needed a new rack and pinion. Dealer quoted $2400 using new parts. Independent garage quoted $1400 using remanufactured parts, I purchased a remanufactured part via mail order and with the use of Youtube, did the repair myself for $250. Point is, even when you use your extended warranty, you likely could of had it repaired a lot cheaper if you didn't have the warranty and just shopped around or got creative.
