Several years back, I had to buy a new washing machine. The store is trying to make me extend the appliance warranty.
Whenever I buy a major appliance, I’ll almost always add extended appliance warranty protection. But when that protection expires, you can expect to pay much more for a renewal.
Sometimes, the added cost just doesn’t add up.
I bought my current washing machine about five years ago. I don’t recall the exact price, but I recall it was less than $500. When I made the purchase, I also bought the extended warranty option. Fortunately, I haven’t needed to take advantage of that warranty. But it’s at least nice to know that for something new that should work fine without problems, you have that extra protection in case it doesn’t.
That appliance warranty is about to expire
I received an email the other day alerting me about the pending expiration of the appliance warranty. It included a button labeled “See the offer” where I could check the renewal price. (Heaven forbid the email just tells me what the price is.)
Here’s where I nearly spilled my coffee from the sticker shock!
The renewal price for three years of coverage is $373.61. Yes, that works out to be $124.54 per year. The website tells me that yearly figure complete with an exclamation point as if they’re offering me the deal of the century.
I went to that particular retailer’s website and found the same washing machine. It’s on sale for $498. The site claims the regular price is $699, but I found the same washing machine on sale for that same $498 price at this store’s top competitor.
The renewal price for three years of coverage is 75% of the cost of a brand new machine.
When I looked at the price of an appliance warranty for a new machine, I found that five-year plans cost just $129.97.
They want per year almost what the original plan cost for five years.
If my washing machine lasts four more years without any issues (knock on wood), I will have saved enough by not buying that warranty renewal to pay for a new machine.
If I bought a new machine tomorrow — which I have no intention of doing — at that “sale” price, it’d cost $99.60 over five years.
Somehow, when the extended appliance warranty costs more per year than a brand new machine does, that doesn’t make me want to renew.
I wonder how many people get suckered into renewing because they don’t just take the time to do the math.