We love our home appliances from our Keurigs and Crock-Pots to our iRobot Roombas and stackable washer and dryers. The number of home appliances that we use on a daily basis has grown. The organization Keep Electricity Affordable (KEA) found that the average American home has three times as many home appliances plugged in today than it did 30 years ago. They compared the types of home appliances American homes had in the late 70s and 80s versus today. Back then, the average home didn’t have a dishwasher, computer, cell phone, microwave or coffeemaker. Many households only had one TV. Today, all of those home appliances and electronics are necessities in our daily lives. We wouldn’t know what to do without a microwave or even a coffeemaker and many homes have more than two TVs. It is obvious that we are reliant on our gadgets more so than ever before. From making that first cup of coffee in the morning to heating up leftovers when you come home from work late at night. We use them from the moment we wake up to the moment we get into bed and fall asleep.
Over the years, we have become more energy conscious and many home appliances today sport the Energy Star seal. Energy Star is a program of the Environmental Protection Agency and the Department of Energy that endorses energy-efficient home appliances. Energy saving home appliances are good for the environment and they cut down our electricity bills, but they may also be shortening the life expectancy of our most reliable machines. Repair experts say the biggest reason home appliances don’t last as long as they once did is because of energy-saving features and electronic components that make these products more complicated and error-prone. The more controls, features and functions an appliance has, the greater chance there is of it breaking. Energy efficient home appliances also have smaller parts in order to comply with energy ratings and these parts have less capability than their predecessors. Since these home appliances have become more complex, they are also more expensive to fix.
When you buy an expensive home appliance, you want it to last long, but unfortunately that is not always the case. There was a time when home appliances like washing machines would last up to 20 or 30 years. Today, the average home appliance’s lifespan ranges from 9 years for dishwashers to 15 years for gas ranges, according to the National Association of Home Builders. Consumer Reports did a survey in 2013, which found the repair or failure rates for home appliances within the first 3-4 years. The failure rate for front-load washing machines was 22%, for dishwashers it was 20% and for side-by-side refrigerators it was 31%. Those numbers aren’t big, but for the people who fall into those percentages, the costs of unexpected repairs or replacements could be astronomical. The survey also found that when home appliances breakdown, 53% of respondents said the products just stop working altogether and 32% said they work poorly. The magazine suggests replacing any home appliance that is more than eight years old, unless it is a high-end model that is built to last longer.
Major home appliances seem to stop working at the worst possible times and getting them replaced can be a financial nightmare. Consumer Reports came out with their own guidelines as to when you should look to repair or replace home appliances. For washers and dryers, consumers have four years before its time to consider replacing these home appliances, based on the quoted repair costs. For dishwashers, owners may have only three good years before they have to consider replacing or repairing. For refrigerators, there is an estimated range of four to eight years and ovens and ranges have two to three years. Many manufacturers’ warranties only last for a year, so future repairs after that time period would not be covered and you, the consumer, are expected to fit the bill. Purchasing an extended warranty can help with these costs.
Customers Are Generally Happy With Extended Warranties
One of the biggest benefits of extended warranties is that they will cover the cost of most repairs during the lifetime of the policy. An extended warranty offers protection to expensive home appliances like refrigerators, washing machines, dryers and dishwashers. If repairs or replacements will empty your emergency fund or increase your credit card debt, causing financial stress, then consider an extended warranty. Extended warranties can also cover your current aging air conditioning and heating units, saving you on repair costs. In the past, many retailers offered three year warranties, but in the last few years they have cut them in half offering one year warranties. Some third-party companies, like American Residential Warranty, still offer multi-year warranties. The company WarrantyWeek found that people are buying a lot of extended warranties for their appliances and they are overall satisfied with their decision to purchase one. They reported that consumers spent an estimated $16 billion on extended warranties in 2011. In a PC World survey, 63% of consumers said they bought an extended warranty and 90% of those used their warranty said their request had been honored with either a repair or replacement and 80% of those who received service said they were satisfied. Most buyers are happy with their choice to purchase an extended warranty with 71% of those surveyed being satisfied.
Below are some tips to consider before purchasing an extended warranty.
Read and understand the terms. Nearly half of the respondents in the PC world survey did not read the terms and conditions before they bought an extended warranty. It is extremely important that you understand what is included and not included in a service contract before you buy it.
Know the cancellation terms and shipping policy. Make sure you know when you can stop a plan and if there will be any fees associated with terminating it. Some extended warranties will not cover the cost of shipping a broken appliance or electronic for repair either.
Consider possible repair costs. If a future repair will strain you financially then it might be worth it to purchase an extended warranty.
Shop around. Do not feel pressured to buy an extended warranty in the store at the time of purchase. Research your options first to see if there are better coverage plans that are more affordable and fit your needs.
Having peace of mind is an invaluable thing. Saving money on repair costs or possible replacement for a home appliance with an extended warranty can help you keep your money and save for other things like that family vacation. Purchasing a whole-home systems warranty from a company like American Residential Warranty can also prevent the need for purchasing individual extended warranties for each home appliance, thus saving even more money.