Is it worth to take extended warranty for your gadgets & home appliances?

It is often said that we as human beings are creatures of habit. Those of us that are meticulous and careful tend to think long-term in everything we do and take actions that might prove to be fruitful in the long run, even if it might seem unimportant in that particular moment.

The same can be said about those that prefer reacting to situations, then take precautionary measures that, in hindsight, might be considered unprofitable or unnecessary.

While talking about extended warranties, both schools of thought apply. It is difficult to find a middle ground while talking about unpredictable situations, especially when it comes to spending money.

Historically, Indian consumers have always been considered to be prudent and thrifty with their spending. Even today, most of us do our own research before purchasing any gadget or appliance and ensure that we are getting the best bang for our buck.

While one could argue that purchasing an extended warranty is a sign of prudence, as it would save us the cost of getting our gadgets or appliances repaired when they breakdown, the other side of the argument is that we would be spending an additional amount if the appliance does not breakdown during the warranty period.

So, should you purchase an extended warranty? Or should you avoid purchasing any add-ons while buying a new appliance?

Cost-Benefit Analysis

One of the most effective ways to make a decision is by doing a cost-benefit analysis. As a general rule, the more expensive your gadget or appliance, the better it is to buy an extended warranty.

The decision to opt for a warranty extension for appliances or gadgets should depend on the amount you had previously spent on purchasing that particular product.

For instance, you can opt to purchase an extended warranty for washing machine, if it is a high-end model.

This is due to the fact that the amount you spend on repairing a high-end washing machine model in case of a breakdown or any damage, would be significantly more as compared to the amount you would spend on an inexpensive one.

Similarly, you can opt for a laptop warranty extension if you own a high-end, premium laptop, as purchasing an extended warranty for a budget laptop wouldn’t make much sense.

Likewise, you are purchasing a smart TV from premium brands like Sony or Samsung, it makes sense to purchase an extended warranty.

Considering washing machines, laptops and TVs are long-term investments, and high-end models from premium brands aren’t cheap, you can protect them from any and all damages by opting for extended warranties from either the brand or by purchasing third-party warranties, which also cover accidental damages.

New or refurbished models

Another factor you can take into consideration is the status of your appliance or gadget. For instance, if you’ve recently purchased a new, expensive model, then it would make sense to purchase an extended warranty.

However, if you have purchased a refurbished model, then opting for an extended warranty might not be beneficial. Refurbished models come with limited warranties from the brand, and do not have the same lifespan as newer models.

Therefore, it would be cheaper to pay for any additional repairs after the brand warranty expires when it comes to refurbished models than paying a premium amount to get them covered under extended warranties.

That said, it is imperative that you read the fine print before purchasing an extended warranty. You have to make sure that even accidental damages are covered when you opt for the warranty extension, along with other issues, such as loss due to theft.

According to one study, it was reported that one in five consumers who purchased an extended warranty was dissatisfied with the service provided, either because of the time it took to repair the product or because it took multiple tries to fix the model.

Thus, the general rule is to opt for an extended warranty if you own an expensive gadget or appliance, and at the same time, do your due diligence and purchase the warranty extension from a service provider that offers multiple benefits.