Manufacturers are reducing appliance warranties at a time when retailers would love to sell you a third party extended warranty, according to The Cleveland Plain Dealer. But I have a few alternatives for you.
We're in an era when the Internet means that shoppers are more precise about getting the lowest prices on appliances. That's really squeezed profit margins for retailers. They're making it up with the sale of extended warranties.
But what are the chances an appliance will break? According to the August 2011 issue of Consumer Reports, nothing breaks more than side-by-side refrigerator/freezers. Over the first four years of ownership, you have roughly a one in three chance (36%) of the fridge breaking. (That's a very high failure rate, by far the highest of any appliance category.)
The most common problem is with the ice maker. Yet the cost of the repair you have to do one in three times is likely less expensive or in the same ballpark as the cost of the warranty in the first place. Two out of three times, you would spend money for a warranty that is never used at all.
So before you go ahead and buy that extended warranty, I want you to do these two things:
- Look at Consumer Reports' record of reliability and buy brands/models that are historically most reliable.
- Make your purchase on a credit card that automatically doubles the manufacturers' own warranty. You'll give yourself additional piece of mind without having to spend anything extra.