When to buy an extended warranty

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Extended warranties are an expensive option offered for all big-ticket appliances. They’re insurance policies covering repairs once the manufacturer’s warranty lapses. They’ve long been a cash cow for vendors because so few policyholders actually take advantage of them.

Most consumer experts don’t recommend extended warranties except for products notorious for frequent breakdowns and repair - a problem not characteristic of time-tested, tried-and-true major appliances.

But to give extended warranties a fair hearing, follow these steps.

* Investigate the repair history and overall reliability of the appliance and brand name in question. It’s easy to find this information online or in consumer magazines. Who wants a lemon, regardless of the warranty’s coverage?

* Know who’s covering the warranty. Third party warranties are the least reliable. Those from the dealer, if it’s nearby, are better, but manufacturer’s warranties are the best. Once you’ve mailed in the product registration card, the manufacturer is likely to contact you about extending your warranty. Ponder which of these three is most likely too remain in business throughout the life of your appliance, and which will be easiest to track down when you need help.

* Know what the warranty says. What’s covered? Parts? Labor? Does it mention exclusions and deductibles? Are you responsible for getting estimates and second opinions or for shipping your appliance to a repair center? Will it pay for clothes burned in a faulty dryer or food ruined in a malfunctioning freezer? Does it provide for a loaner while your appliance is out of commission?

If you have a warranty, whether it’s the manufacturer’s original or an extended plan, keep all paperwork where you can find it. Without it, your warranty will be useless when it comes time to make a claim.

Perhaps the best insurance for appliance repairs is the “cookie jar” installment plan. It involves dividing the amount you’d pay for a warranty into weekly or monthly increments and setting it aside in an appliance-repair account. The funds in this account will be yours to use long after the extended warranty lapses, and you’ll have it available for service and repairs on any of your major appliances - or replacement of less-expensive, smaller appliances.


All the best,


Timben