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Saving you money – Protecting your rights - Untangling spin

Extended Warranties: Expensive Peace of Mind

Wednesday, January 7, 2009
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I would have been wiser not to have purchased the extended warranty in the first place

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By: Barbara Novak

  In a rare reversal of Murphy's Law, my washing machine's motor burned out in 1998, the day before its extended warranty expired. It was promptly and cheerfully replaced at Beaumark's expense. Had I made a mistake in deciding to allow the warranty to lapse? After all, my washer was now 13 years old. Wouldn't I have been wiser to have continued the modest annual payments?
  No, I would have been wiser not to have purchased the extended warranty in the first place.
 
  Since I used my extended warranty twice in ten years, it cost me $450 for each visit by a repairman. Hardly economical.

  I had purchased my dryer at the same time as my washer. The repair person who came to service the dryer in 1996 told me that while he could fix it, it was past its prime and would never dry as well as a new machine. After a few months of damp clothes, I decided he was right and purchased a new GE dryer from Future Shop for $389.99.
  The washer lasted another few months before something rusted through and now the bill was on me. I could see the writing on the wall - even with a new motor this washer was no spring chicken. So I bought a new one at the Bay for $529.98. The cost of the two new appliances came to a total of $919.97, slightly less than the money I had paid for their extended warranties. Over 10 years I had paid $86/year for extended warranties on my washer and dryer and then approximately $50 a year for another 2 years for the extended warranty on the washer alone, for a total of about $960. How many times did I call a repair person? Twice. That works out to more than $450 a visit. Hardly economical (but at least I had peace of mind).

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