Some folks, like the douche bags at a certain consumers' testing group, my brother-in-law (not a douche bag at all) and others (some are and some are not DBs) say you should never buy an extended warranty because they are not worth it. I beg to differ.
We had an extended warranty on our fridge but it expired last year. A recent repair for our fridge was over $400, they replaced the main control circuit board. Then 2 months later, it went out again and they came back and replaced the circuit board again at no charge, changed another part for $33 and performed all the labor ion the second repair for free. Because we had purchased the extended warranty and machine with American Express, they graciously covered an additional year of the extended warranty - and therefore just paid me the $400 plus dollars for the first repair. I am pretty sure they would also pay that additional $33 from the second repair if I made a claim but don't think I will bother. Those repairs only came with a 90 day warranty, but since I paid with Amex, that warranty will also be extended for another 90 days. They double your regular warranty if a year or less; if longer than a year they will add a year to it. If you buy an extended warranty when you get the product, they will do the same for the extended warranty - so if you buy a 5 year extended warranty they will add a year making it a six year extended warranty. That is what happened with our fridge. It was well worth the expense of the extended warranty which was under $100 when purchased several years ago.
We also just had a vacuum cleaner go belly up. I bought an extended warranty for it for about $28. The warranty company just sent us a check that was about $20 more than the original purchase price of the vacuum. The new one I just bought was about a hundred bucks more than the old one but that extended warranty plan just about paid for the new one and thus saved me a good chunk of change.
Then there was the washing machine on which we also had an extended warranty. Yes good things and evil crap seem to come in threes. The washer also has gone belly up. The extended warranty company for the washer just sent us a check for $400 plus dollars. Again, the cost of the extended warranty was a lot less than the check they sent us, I think it was about $75 for 3 years extra time. I bought a new washing machine tonight; it set me back $581.33 which included $110 for a 5 year extended warranty. The machine itself was $403 marked down from $549 at Homer's Depot (both Lowe's and Sears had it on sale but for considerably closer to the regular price than HD).
Of course, extended warranties are a crap shoot of sorts. If the appliance or other product you buy does not breakdown and either require repair or wind up unrepairable, then you wind up losing the money you spent on it at the end of the extended warranty period. For instance, a few years back, maybe several by now, I bought my wife a large screen TV for Christmas. Knock on the thickest wood in the house (as I knock on my head) it has not had any problems and I am guessing the extended warranty on it has expired by now. Still, if I was going to buy another TV like that, I would also buy an extended warranty on it if for no other reason than televisions are mostly made in some sweat shop in China, North Korea or Japan and the manufacturing standards in at least on of those countries sucks. When I bought my laptop, last summer, I got at least a 3 year, extended warranty for it. In an instant of brain fartitiss made the mistake of not paying with American Express though and hope not to regret that, time will tell. I have already had problems with the laptop, that would have been covered under the manufacturer's one year warranty but that could be an indication of other problems ahead so I am looking at the extended warranty I purchased as good insurance against such but just cannot believe and cannot recall why I did not use Amex to make the purchase.
One last thing, as to extended warranties, I don't buy them for every eligible product I buy. I usually don't get them for items under $200 in value. I figure I can take a gamble on most of them and take the hit if I gambled wrong. A little above $200 in price though and that is a different story if an extended warranty can be had at a good price and if the terms of the warranty are to my liking. Yes that means, I check the terms of each warranty before purchasing it. You would be surprised at what some people try to call an extended warranty - some are not worth the paper on which they are written. Most though, from reputable companies seem okay to me and thus I stress buying from reputable companies to get your money's worth.
All the best,
Glenn B
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