Honest opinions about how to buy Appliances and Lighting.

Monday, June 29, 2009

Extended Warranties

I find extended warranties interesting. Then again, I have a strange sense of humor. These slips of insurance really run the gamut of consumer emotion. From people who think it is expensive(which it can be) and a waste of dough to customers who are irate for not buying one and having to pay for service.

Here is the skinny: If a company does not have a service department, do not buy it ever. I don't care if they return a portion of your dough after the contract expiration. The contract is worth nothing, and the seller is banking on breakage and non redemption. We spend 10,000 per month in contract redemptions. The rough percentage is 20-25%, but when you need service...the average call is more expensive than the contract.

Skinny Part 2: Be very wary of third party contracts. Often times, a dealer will hand you a contract, which is backed by a warranty provider. I have a healthy respect for most of my competitors...But in this case, run the name through the Better Business Bureau. The results can be shocking.

Skinny part 3: Do not be oversold and do not overpay. You should pay $150-$250 for a basic appliance and $250-350 for a professional piece...Some of the rates can be outrageous. Look for ancillary benefits, refrigerators can have a food loss guarantee. (ours is $250)

And remember...it is your decision.

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