Have Extended Warranties Become A Good Thing?

Extended Warranties

In the past few years, I’ve done a complete about-face on extended warranties.  I used to be completely against them, and then I was wishy-washy on them, and now I am basically in love with extended warranties.  Not on everything, but absolutely on many things.

Extended warranties are available on a wide variety of products, including electronics and appliances.  It is particularly the electronics category where I’ve decided that extended warranties are a good purchase for our family:  computers, earphones, iPods, stuff like that.

It all started when I randomly purchased the extended warranty on a computer that I bought way back in 2009.  A few years later, when it was held together with a binder clip and was missing three keys, I utilized the extended warranty to have it all repaired.  It was awesome, and it was free!

I still wasn’t completely sold on the extended warranties, and I would buy one with about ½ of my purchases.  Then, I bought a very expensive new laptop, and the extended warranty, and it was awful.  It had about six things wrong with it.  I hated it, and I could never get any work done, and I fought with it for several weeks before I called the warranty company and explained the problem.  And, they just sent me a check for the full cost of the computer.  It was so simple, and so amazing.  I was still out the cost of the extended warranty, but I was rid of that dumb computer and could move on with my life.

Since that occasion, I’ve purchased the extended warranty on almost every electronic that I’ve purchased, and I wish that I had purchased the warranty on the rest of the items.  I’ve filed for claims for headphones with a bad jack and several computers that didn’t hold up at all.

I don’t know if warranties are working out for me because we have six people who use their electronics constantly, or if items are just being made to break really easily.  It’s probably some combination of the two.  Regardless of the reason, I’m glad to only be out the $9.99 warranty cost when my child’s $49.99 headphones stop working.

I’m still not convinced about the value of extended warranties on cars or appliances, because they don’t actually seem to break the same way that electronics do.  It seem to me that for cars and appliances, the standard warranties should be sufficient.  For appliances, you may have additional coverage if you use a credit card to buy the item.

For electronics, I’ll continue buying the extended warranties for now.  I’ll keep an eye on the cost and how often we’re using the warranties to make sure that they continue to seem like a good value.

Do you have recent experience with an extended warranty?  Has your opinion about them changed?  Do you purchase them for one category of product but not for other products?  I’m curious to hear what you do, and why.

photo by:  Sean MacEntee

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.