smart spending

Should you purchase an extended warranty?

Appliances
Appliances © ppart/Shutterstock.com

An extended warranty for appliances usually covers parts and labor for a mechanical or electrical failure beyond the standard manufacturer warranty period. So, if your oven's heating element dies while under warranty, it should be replaced at no cost to you.

While free repair is great, Consumer Reports cautions that products rarely fail within the extended warranty period. Even if they do fail, that out-of-pocket repair costs only $16 more on average than what the extended warranty costs.

If you're still considering an extended warranty for your appliance, make sure you understand how claims are handled -- and how quickly. "There's an industry average of 2.5 'truck rolls' to get your item fixed," Shay says, with at least one trip for the diagnosis and another for installation.

For Nachlis, who bought Sears' three-year extended warranty when he purchased his washer, dryer and dishwasher, the coverage proved worthwhile. He paid $200 for a warranty on a $1,400 washer and dryer set. A dryer repair cost $300, but he was fully covered.

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