7 Tips on the appliance extended warranty

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service contractsYou’ve decided to take the plunge and layout a big wad of cash to buy that new appliance, the refrigerator, dishwasher or clothes dryer, but then you’re faced with yet another decision that affects your budget. Do you take on the appliance service contract? These contracts also known as extended warranties, provide repair and maintenance coverage for a certain length of time. The question, though, is: are they worth the additional investment? Deciding if the appliance service contracts are the right way to go for you involves considering several factors. We hope these tips on assessing the value of an appliance extended warranty help you make the best decision for your needs.

7 Tips on the appliance extended warranty

1. Do Your Homework.

The first matter to be considered is the appliance itself and the coverage that is being offered. Remember that salespeople have to make a living too and they stand to gain through generous commissions that come with the sale of appliance service contracts. Their earnestness in trying to convince you of the virtues of such a warranty can be self-serving, self-deception on their part. We’re all susceptible to the common foible of seeing as “best” that which is in our own self interest. Regardless how earnest the salesperson is, or even how sincere, you have to make the decision based on your own needs. Do your homework in advance, so you’re ready, when the appliance extended warranty question arises.

2. Coverage for what, exactly?

The first thing, of course, is know what it is exactly that you are talking about. You should have no opinion on an appliance service contract, pro or con, until you know exactly what the warranty covers. Read carefully, with an eye to assessing whether the contract provides additional coverage sufficient to warrant the extra expense. As your appliance surely includes a limited term product warranty, you have to ensure that you’re not just buying more of the same in the extended service contract. Also, be sure to check any exclusion on the appliance service contract; are there situations you’d expect to be covered, but actually are not? And what about the coverage for related effects, such as clothing torn in a dryer or food lost in a freezer breakdown? Also, what happens if a necessary repair part is no longer available?

3. Know the appliance.

These sorts of contracts are forms of insurance. And they do say that you never need insurance until you need it. But, realistically, you may want insurance to compensate you if your house burns down, but do you want to pay the premiums to cover any potential broken window or scratch on the hardwood floor from moving furniture? No, of course you don’t. And the same applies here. The better you know the consumer reports on the appliance you’re buying, it’s likely failures and its dependable strengths, the better armed you are for making a sound decision about the virtues of any appliance service contract. Why waste money on something either unlikely to happen or trivially expensive if it does?

4. Are there hidden costs?

These contracts are like insurance policies in another way, too. They often will have deductibles. They also can have use of service fees that are applied each time you draw upon the warranty. Be sure that you’re fully aware of all the costs that will be involved in actually using such an extended warranty. If you don’t adequately take these into account, your cost-benefit calculations could wind up being off, leading to unhappy realizations later.

5. Travel takes time and time = money.

Other costs, or benefits, might not be so immediately obvious, but need to be considered. For instance, your time is valuable to you. Whether you’re taking time off work, or just taking it away from enjoying it with your family or engaging in some other activity that relaxes and pleases you, if your extended warranty obliges you to take some long trip all across town or the county, using up your entire Saturday (to say nothing of gas costs) that’s a price you’re paying for the warranty. Obviously it’s much better if the service person is coming to your home to fulfil the contract. Also, what if you move to an entirely different city or region? Will the contract still be serviced there? If there’s any chance at all of you moving while the contract period is effective, this is something you’ll want to check.

6. That’s why they call it reputation.

The top quality producers in any field of endeavour are not only selling you a specific product or service; they’re also selling you their reputation. Try as they might to spin their good name with advertising and PR, eventually, word gets around. If they produce reliable goods, if they provide excellent customer service, if your satisfaction is their top priority, people find out soon enough. These are the solid companies with whom you want to do business, if you possibly can. You can sleep at night knowing not only that you have a product unlikely to need such servicing, but in case you decide to be safe and spend some extra just in case, you’ll be comforted to know that that warranty will be honored in spirit as well as in letter. Companies with great reputations work hard to earn them. It’s something that you should take into account as much in considering a potential extended warranty as in choosing the appliance itself.

7. Do you have to decide today?

While the question of buying an extended service warranty will come up at the time of purchasing the appliance, you don’t necessarily have to decide right then. Often you can wait until after having the product for a while before deciding. Find out if this is an option. Indeed, it does make more sense to only buy the extended service warranty as the original product warranty approaches its expiry date.

Appliance service contracts can be tricky things. They can provide great value, but if poorly chosen they can be a waste of your valuable money. We hope these tips on assessing the value of an appliance extended warranty prove helpful for you in making the best decision for your needs.