I live within a 30 minute drive to several large casinos. And in the 10 years since I moved here, I calculated that I have been to those casinos….0 times. Nope, I don’t gamble on blackjack or slot machines (the only 2 gambling games I could name off the top of my head!); instead I gamble at appliance stores. Every time I buy a new appliance, I’m offered an extended warranty, which I turn down EVERY.SINGLE.TIME. This is difficult to do when the salesperson asks, Are you Sure?!, and then shares some personal story of how their extended warranty SAVED THEM SO MUCH MONEY. By this time, I’m usually grumpy and say something like, “I shouldn’t have to worry about it breaking down in the first couple of years since I’m buying new!” Every time I turn down an extended warranty for (on average) $60 a year for 2-5 years, I know I’m taking a chance that my shiny brand new appliance will break down in that time period, and I will have to pay the full cost of repair. What can I say, I like to live dangerously.
But today I decided to figure out whether or not my bet is paying off. In the last 10 years, I have bought (new) a washer, a dryer, a dishwasher, an electric range, a refrigerator, and a deep freezer. Good night, no wonder why I don’t have any money! Anyway, none of these things have broken down in the first 3 years which most extended warranties cover (the refrigerator is only 9 months old; everything else is older than 3 years). If each extended 3 year warranty cost me $150, that is $900 that I would have potentially spent to save on repairs. In this same 10 year time frame, we have called the repairman to fix the washer once, the dryer once, and the deep freezer once. All of these repairs occurred after the first 3 years, and the total spent on these repairs was about $450. So, the repairs came to about half the price of the extended warranties (if I factor in all my appliances together), and the warranties would have been expired anyway on every single incident we had, rendering me no value for about $900 spent.
Which brings me to the point of this post. We paid $59 to find out that our 4-year-old freezer cannot be repaired and must be replaced. Ouch. Fortunately, it didn’t have any food in it to spoil, but we are picking up a side of beef from Enloe Farms (wonderful people, great beef!) in 2 weeks. So we need a freezer ASAP. I’ve already priced the one I want, which will cost me about $600 after taxes. I’m telling myself that I saved enough money on not buying previous warranties to help with the cost of this purchase. The extended warranty is $129 for 2 years. And, once again, I’ll smile sweetly at the salesperson and say, “No, thank you, I’ll take my chances” when I’m offered that extended warranty.
I crunched the numbers. My bet is paying off.