As you are likely well aware, when you buy a domestic appliance online or in a shop, you will be asked whether you would like to purchase an extended warranty. What does it do? Is it worth it to purchase an extended warranty?
First, you should consider the policy’s contents. Is it inclusive of parts and labor? This one is important. Although it may sound obvious, many people fall for the sales pitch and don’t take the time to read the policy. They might be too eager to make a purchase and not spend enough time reviewing the policy.
Only parts are covered by some warranties or insurance policies. It is not the appliance that goes wrong that can cause financial problems. Instead, it is the labor cost to repair it. This is what you are suddenly liable for.
It is possible that you may be offered a 2- or 3-year warranty, but these warranties usually cover the first year of purchase. Manufacturers usually include the first year in their purchase price. When weighing the cost of this insurance policy and the value it offers, you’ll need to subtract one year from the price and divide it among the other years. This calculation will determine whether the insurance policy you are considering is worth the money. How do you determine if it is worth the investment?
There are many factors to be aware of. You can feel secure knowing that you have insurance. It is a large sum of money that you have spent. However, should something go wrong, you will know you have insurance. The company that holds your policy will contact you and arrange for an engineer to visit the premises. This depends on the type of policy. If your appliance is not repairable, most policies will offer an equivalent replacement. Sometimes, however, it’s cheaper for these companies to buy you a new appliance rather than spend money on parts and labour. This is especially true if your appliance is very old or difficult to find parts.
One question to consider is whether the money you spend on your insurance policy, in one or monthly payments, is more expensive than buying a new appliance, if you ever need to replace it. You may be able to get your appliance fixed within the warranty period.
What would you do if your insurance policy was cancelled? You would need to hire your own engineer, and they may charge you a call-out fee to provide you with a quote. What happens if the engineer arrives and cannot fix it? You will need to buy a new one and search for the best deal. However, you will need money to do this.
Each individual can decide if they prefer the security and peace of mind that comes with an insurance policy or saving money. Your policy will expire after 2 to 3 years. You will need to buy a new policy for the next set of years to ensure you have coverage and peace of mind in the future.
It is up to you to decide.
