Every time you buy anything, you're asked if you want an extended warranty on it. That's great, but how do you know if it's worth it?
Here's our list some of the common household products that might have an extended warranty and if you should purchase one.
- Appliances - No - Appliances are expected to last for a certain time. Often, the repairs on a stove or refrigerator will cost less than the warranty. Also, many appliances will run great for years beyond the warranty and you've wasted money.
- Roofing and siding - No - If your shingle roof has a 20-year warranty on it, it's not really worth buying an extension. First of all, statistically you won't be in that home in 20 years. Second, if your roof is likely to fail, it's likely to go while you're still in the 20 year lifespan. Don't waste the money. You'll make more putting it in a savings account and gaining interest for 20 years.
- Pest control - Maybe - If you have a pest problem, your exterminator might offer an extended warranty. If the past problem was just a couple of ants, no big deal. If you have a major termite problem, they are far more likely to come back. A warranty will have the exterminator coming back throughout the year and doing maintenance. Even a few termites can do a lot of damage. It will be cheaper to pay the exterminator.
- Home security systems - Lots of security systems now are do-it-yourself. Those will often have warranties on the equipment, especially if you buy it at a big box store that has its own extended warranty program. As a rule of thumb, if it's going to cost you more than 30% of the purchase price of the item, keep your money and save up if you need to replace it.
- Furnace - This is a slightly different situation. There are lots of companies now that offer to sign you up on an annual basis to maintain and repair your furnace. Since a furnace can costs thousands, it can be great to have someone watching over it, cleaning it, and maintaining it.
Extended warranties are popular, but not everything should have one. Consider the replacement cost, the length of service that the device should have, and the length of both the original warranty and the extended warranty. There are no set rules, but consider the value you might receive from your purchase of an extended warranty.