Have you noticed when you purchase electronics/appliances that the salesperson always asks you if you want to purchase an extended warranty? They will usually follow it up by telling you how expensive a repair is and how much money you are saving by purchasing the extended warranty.
However, the extended warranty usually costs between 10-20% of the cost of the item you're purchasing, and typically the repair rate for the first three years of ownership of many items is less than 10%. Retailers' profit margins on electronics runs about 10%, but they are able to make a much larger profit on the extended warranties. Most warranties don't cover accidental damage...you should read the fine print on what exactly is covered before you purchase the extended warranty. Because of this, I don't typically purchase extended warranties.
So, what can you do to extend your warranty without purchasing an extended warranty?
- Purchase a TV or Computer at Costco - Costco will extend the warranty on TV's and computers purchased at Costco to two years from the date of purchase (typically the manufacturer's warranty is good for one year)
- Pay for your purchase with select credit cards - Do your research on any credit cards you may have. Some credit cards do offer extended warranties on items you buy with the card.
- Research warranties on parts - often the compressor on a refrigerator and the magnetron on the microwave are covered for 5 years, even though the rest of the appliance is only covered for a year. Recently we had the magnetron on our microwave replaced for free under warranty, since it was just within the 5 year warranty.
Do you purchase extended warranties on electronics, appliances, or computers? If not, do you have any other creative ways to extend the warranty?
Ashley P
The only extended warranty we have ever had on any electronics was on the TV/DVD/VHS that my in-laws bought us shortly after we were married. They purchased the 10-year warranty that Circuit City offered. It's a good thing they did, because in it's third year, the DVD player stopped working. We were able to trade it in for it's full purchase price towards the purchase of our new TV last April (just before CC went bankrupt)... thanks Mom and Dad!
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Corrie @ "Cents"able Momma
Ashley - it sounds like the warranty really worked out well for you. Luckily, you were able to replace it before CC went out of business. I didn't realize they even offered 10 year warranties...that's a long time!