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Extended Warranties on Appliances Heating and Air Conditioning
8/2/09 From Paso Robles to Santa Maria; San Luis Obispo and the entire Central Coast, people frequently ask “Should I buy an extended Warranty?” I will try to tell you in my rambling way, what your options are, and when you should choose which option. I will start with explaining what appears to be the fact that more things break sooner than they used to.
Annecdotally (not sure if I spelled that correctly), more new appliances, heating systems, and air conditioning systems, have problems “out of the box”, or within the first five years of use. It is easy to simply blame the manufacturer for their cheapening of standards, or poor quality control. This may be true, but it may be our (the consumers) fault.
The manufacturing companies are given huge tax incentives to constantly upgrade their energy efficiency. This causes constant re-engineering, and field rework engineering to correct design problems that could possibly be avoided if the manufacturer could do longer testing before introducing a new product or feature. Keep in mind, that all the while, we consumers are demanding MORE features WITHOUT any increase in prices. On top of that, each manufacturer must hurry to keep up the the other competitors in their field.
If you look back ten years, or even fifteen years, the price of appliances, heating and air conditioning equipment has not risen significantly on base models.
So, what does all this mean in terms of buying extended warranties. First, repairs are going to tend to be more expensive, due to the cost and complexity of electronics. Any repairs to replace electronic control boards will run from $200 to $700 across the entire line of appliances, heating and air conditioning. This is a big hit for a repair, but the statistical odds of it happening to you are pretty low (about 6 out of 100 in the first five years).
Most statistics (including Consumer Reports) indicate that ECONOMICALLY, extended warranties are not a wise decision. That said, if you are one of the 6 of 100 with a repair you feel lucky if you bought an extended warranty. I think a smarter way to look at extended warranties is “Can I afford a possibly expensive repair?”. If you can take a $200 to $700 repair without too much financial worry, don’t buy the extended warranty (My only exception to this would be if not having an extended warranty would cause you to stress about not having coverage). You pocket the Extended Warranty money, and odds are you will be bucks ahead. If you are living on a tight budget, and a hit of $200 to $700 would be tough to take, it may be smart for you to consider buying the extended warranty as a financial safeguard.
And finally, if you do decide to buy an extended warranty, here are a few tips. Only buy it through the manufacturer. There are many companies that sell extended warranties. Selling dealers will naturally use the ones that give them the best commision, and have the lowest consumer price. This is definitely a case where “you get what you pay for”. Second, most everything comes with at least a one year warranty from the manufacturer.
I will digress here slightly. You know that little card you get that requests all your information to register your purchase? You know, the one that most of us toss into the circular file? Well, it is IMPORTANT for you to fill it in and send it in (or go online) to register your purchase. It will negate your having to prove a purchase date in the future, should you have a warranty issue. It also records the Model and Serial number, which could get worn off, and is sometimes critical in the repair process.
Now, back on track. If you have properly registered your purchase, in almost all cases, the manufacturer will notify you when you are about to go out of warranty. At the same time, they will typically offer you an extended warranty, which is either run by them, or affiliated with the manufacturer. If you wait until this time to purhase your extended warranty, you now have a year of experience with what you bought. Did it perform? Does it have any quirks that make you think trouble is in the future? In online reviews, have others had problems with this unit? Have you already had any in-warranty repairs that could recurr? At this point you are much more informed about the probability that you would actually USE the extended warranty.
I hope I have not entirely mudded up this explanation of extended warranties. If you have additional questions, please feel free to email me at peopleschoiceservices.com, or call me at 805-543-3334. Rich Johnson