Extended warranty is it worth it?

[buckshot721]

I never bother with them, but it's kind of a double edge sword. Yeah it's worth the price IF something happens, that you need to use it. And then no it's not worth it if you do not use it. We purchased a new Impala this year, the first thing out of the sales man mouth was " Would you like to purchase a extended warranty?" My next question was "Is this car such a piece of s*&^ that I need one?" He never asked again! Unless you get a VERY good price for one I would not bother.

 

[teg]

I would also add... if I were to be putting 500-1000 hours on the unit a year. I would seriously think about it more... as it is, I think many of us are 100 hours or less.

 

[TripleR]

I would also add... if I were to be putting 500-1000 hours on the unit a year. I would seriously think about it more... as it is, I think many of us are 100 hours or less.

Good point, I am at about 400 on a couple and as little as 150 or so on another; one hasn't moved in months.

 

[Travelover]

An extended warranty is basically a form of insurance. My rule of thumb is to never insure against a loss that I can easily sustain. Million dollar liability lawsuit or house burning down? Better insure against it. $500 tractor repair? Self insure.

 

[smstonypoint]

I recall reading an article in the WSJ or similar source about extended warranties at Best Buy. Best Buy apparently released financial info that allowed analysts to calculate the Best Buy margins on extended warranties. Apparently, the extended warranties were a major contributor to its bottom line.

I have no hard evidence to back up my opinion, but I suspect that extended warranties are cash cows for the issuers.

Steve

 

[funwithahoe]

An extended warranty is basically a form of insurance. My rule of thumb is to never insure against a loss that I can easily sustain. Million dollar liability lawsuit or house burning down? Better insure against it. $500 tractor repair? Self insure.

I agree- It is simply "insurance" where you are lumped in with everyone else - If you take all the money you would spend on extended warranties and put it in a bank only withdrawing when you had an issue I promise you that you will come out WAY ahead. Assuming you aren't a baffoon running you equipment. Think about it this way - You putting your money in a pot with everyone else and someone is going to manage that money. When someone (idoit or otherwise) breaks something they are going to take money out of the pot and fix it. Do you think they have set up those odds in your favor??

Again insurance can be extremely valuable for a big loss and I am not knocking that idea at all but incase you need a couple hundred dollar fix?? Self Insure with an emergency account!!

 

[teg]

My luck even if I have the extended warranty, they'll say that it's abused... no, it's a tractor... (I have to admit that I don't wash and wax my tractor... or trucks... or cars)

 

[smstonypoint]

I have heard the same thing from other sources over the years. Often times, these warranties have various limitations on them. I'll play the odds in my favor.

I just remembered another story about Best Buy. They were selling some electronic device for about $50 and wanted a similar amount for an extended warranty. DUH?

Steve

 

[funwithahoe]

I just remembered another story about Best Buy. They were selling some electronic device for about $50 and wanted a similar amount for an extended warranty. DUH?

Steve

This is no BS - My wife once bought my 2 year old a "phone" (toy of course)at a place like that and when they rang it up the cashier asked if she wanted an extended warranty. My wife clarified what she was talking about and said she must be mistaken this was a kid's toy but the cashier insisted that she could buy an extended warranty if she wanted!

In the end they have an extremely high margin and although a few people "win" most would do way better not putting that layer of administration between them and the fix.

 

[DeltaT]

An extended warranty is basically a form of insurance. My rule of thumb is to never insure against a loss that I can easily sustain. Million dollar liability lawsuit or house burning down? Better insure against it. $500 tractor repair? Self insure.

+1

Companies that offer an extended warranty or insurance basically try to cash in on fear. "what will happen if ...." Nobody knows, so why worry about it.
I use my common sense and try not to abuse whatever you use. If it breaks after my basic warranty, I just pay out of my own pocket and carry on.