I was reading recently a report that was published in 2018 that said that people in USA paid more than $40 billion in one year to purchase extended warranties on electrical appliances, but very few are able to get any benefit or save money for repairs. Very rarely the extended warranties will replace the product with a new one, although some will say in the paper document.
I will now tell you about two extended warranties that I was able to use it, and saved some money in the repair. One was, when I purchased Toyota Corolla in 2000 from a dealer in Georgia. Because, I was purchasing a new car for the first time, when the sales agent suggested the extended warranty that will extend the manufacturer’s warranty from 30,000 miles or three years to 90,000 miles or three years, and covered major repairs that included engine and transmission. After driving it for about two years, I gave it to my daughter. She was just driving it, I was managing all oil-change or any minor repairs. Just about two weeks before Christmas, she told me that oil-change light is blinking. I was surprised, because I had the oil changed done only a week ago, so the next day I took the car to the dealer and he asked me to come next day, as all technicians were too busy and cannot run diagnostic on the car.
Next day, I went to the dealer, and after the diagnostic the technician told me that the report says “there is a minor crack in one of the pistons in the engine.” He said, that it is very surprising that has happened after you have driven around 98,500 miles. Normally this kind of defect occurs within the first three month, or before the normal warranty of 30,000 miles or three years expires. So, you have to leave the car with us. I arranged for a rental car and left the my car with the dealer. Next day, I called the company that was managing the extended warranty. The customer service lady told me that the warranty will reimburse $50 for rental car, and I will be responsible for the additional rental charges.
Due to Christmas holidays, the Toyota dealer was not able to find a used engine to replace the engine, and it was costing more to repair it. I told him, that I will be paying extra for the car rental, and asked him to get this repair done as soon as possible. He said, that he can give me a rental car from the dealership, and it will be covered fully by the warranty. I said, why the technician who completed the paperwork for the repair, did not tell me this, I would have saved a few bucks.
The next day, I got Toyota Camry and used for a week, before I could get my Corolla repaired, after more than two weeks, with a used engine that had only 38,600 miles on. Due to mileage laws, they could not changed the original mileage on the car. When I asked him to give me some kind of documents to prove the actual mileage of the engine and get a better price when I sell, he said that somewhere the delivery paper had been lost or shredded.
My only cost was about $180 that I had to pay extra for the rental, and that also due to carelessness of the technician, besides the extended warranty cost that may be around $350 that I paid with the monthly payment in three year payment plan. The technician told me if I had not purchased the extended warranty three years ago, or this fault happened after driving for another 2,000 miles, I would have to pay around $3,500 for getting my car back with a used engine with this low mileage.
The other extended warranty that save me a few hundred dollars was for my Whirlpool refrigerator that I bought for our new house in 2001. About three months, before the original three year’s manufacturer’s warranty was expiring, a company offered me three year extended warranty at a very attractive one-time payment of less than $100. I sent the payment, and got the warranty paper in the mail. After about two more years of use, one day, my wife told me that the refrigerator is not cooling and the items in the freezers are not frozen any more. I contacted the company that was listed on the extended warranty, and they forwarded the information to one of their technician, but he did not show up for more than two days. So, I called them again, and to avoid any more delay they asked me to get the refrigerator repaired from any local technician and submit the bill for full reimbursement. I submitted the bill for $189 and they paid in full. So, again in the end, I was a winner again. In future years, all extended warranties that I was prompted by the sales associate at the check-out could not be used, as either it expired, or the repair was considered as regular “wear-and-tear” and thus not covered.
One day I was listening to the Clark Howard radio program in which he did not recommended buying any extended warranty for any appliances or equipment, including lawn mowers or electrical tools used in yard work or even computers, saying that the manufacturers regular warranty was sufficient, and that it may not cover the actual repair or expire before. He also said, that
So my recommendations is also for not buying the extended warranty. Make a note in your diary for the date and amount of the extended warranty, expiry date and then check it when you get the bill for the repair on that equipment. Most probably you would pat yourself for not buying that extended warranty.
Rambler's Corner 