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Now that the holidays are behind us, I know a lot of people just received a lot of very expensive items. Many of these items, such as cell phones, computers, appliances, and furniture are going to need warranties. So, let’s talk about how to get the best bang for your buck on a warranty.

Warranties are an interesting topic. They can either be the best money you’ve ever spent, or the biggest waste ever. To me, that means it’s worth a very close look. I know some people automatically get the warranty on any large purchase, but in some cases, it isn’t a very good deal.

Note:  May contain affiliate links, so I will receive a small commission on any purchases you make at no cost to you.


I have some great tips on how to get the BEST deal on your warranties.


Most brick and mortar stores put a huge markup on their warranties knowing that a large percentage of purchasers won’t ever use them. It’s sort of like health clubs – they count on probably 75-80% of their subscribers working out a few times and then dropping out. If everyone who had a membership showed up on any particular day, they probably wouldn’t even fit into the building. The conservative estimate is that only about $20 of every $100 spent on a warranty goes towards repair costs. The other $80 is going straight into the store’s pocket. That’s not the kind of charity I like to support – how ’bout you?

So, the first question you need to ask is does a warranty make sense for this item? How likely is this item going to be to break down? In my experience, large appliances such as refrigerators, washing machines, and dishwashers very rarely break down. I have literally had the same fridge for 21 years and I’ve never had a moment’s trouble with it. On the other hand, a few years back, my brand new iPhone 4 ended up in the washing machine within 6 weeks of purchase (sigh). More on that in a minute…

Another question to ask is how expensive would a repair be? I always purchase a car warranty without question, even though I know it’s costly because certain car repairs can be so expensive. On the other hand, I didn’t bother with a warranty on my son’s new Kindle. It was an $80 product and they wanted $30 for the warranty. When the prices are that close, the warranty doesn’t make sense. At that point, if anything happened, you would just suck it up and put that $30 towards a new one instead of wasting it on a warranty you are unlikely to use.

If you do decide that a warranty is a good idea, is the store version your only choice or even your BEST choice? Nope! Like any other profitable item, there are multiple companies that sell warranties on many items, like cars, appliances, or electronics. You just have to do your homework and make sure it is a reputable company.

I found SquareTrade, Inc. back when I was an Ebay seller. They specialize in warranties on various large and small electronics from Ebay, but also ALL major retailers – such as Best Buy or Walmart. For instance, when I bought my iPhone, the Verizon warranty would have been $199 a year plus $99 per replacement and I think they didn’t cover water damage. The same warranty through SquareTrade was just $5 per month and just $50 per replacement and it does cover both drops and water damage, although not loss or theft.

So, when my poor phone had it’s little bath, SquareTrade not only had my replacement in my hands in 48 hours, but they even sent me a 16 gig instead of an 8 gig (I think just because they were out of stock on 8 gigs). I had a similar experience with them when the hard drive crashed on my computer. I took it to a local repair shop and kept the receipt and they reimbursed me within a day or so. (If you do give SquareTrade a try, give them my blog name as the referral – I’m likely to get a discount on my next warranty!)

If you jump quickly – before the end of the year, then you have a chance to save 25% off their regular prices, but the offer expires 12/31/2015, so don’t delay.

Square Trade - Stop overpaying for iPad insurance.

On the other hand, you have my in-laws. I think they were “warranty junkies” and they made sure they got their money out of them! I remember half a dozen times when they had their washer or dishwasher being worked on and it was all paid for with the warranty. The reason that worked for them was because they were diligent about keeping all the receipts and paperwork (these were in pre-computer days) and they were not shy about having the tiniest little problem fixed under their warranty.

If you do go the warranty route, keeping good records is very important. You need to know exactly when your warranties stop and start, how to renew them every year, and what types of repairs are covered. That can save you a bunch of nice, juicy money on all your shiny new Christmas toys.

Photo credit – Image courtesy of [Joomphong] /

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11 Comments on After Christmas – Let’s Talk Warranties

    • How nice to hear from you. Hope you had a lovely holiday. Yes, I hope this tip helps you. I think we are conditioned to think that the store is the only option for a warranty, but I’m glad to know about these other options. They can save a lot of money.

  1. Those records are critical. When I called for my dishwasher repair and they said it was a two week wait- they deliberately chose it to put me out of warranty. But, I suspected such shenanigans, which is why I called them from a phone system that logged each call time and duration- to prove that I requested service in warranty; that was the crucial element to assure my $242 repair was on their dime, not mine.

    • Good for you. That’s exactly what I’m talking about. Because you knew when your warranty expired, you were prepared to make sure your repair was covered. I wish everyone was as organized as you.

  2. Brilliant advice, and we were just facing that this Christmas. Bought the 12 y/o a laptop and went back and forth on whether to put a Geek Squad warranty on it. The 12 y/o is very responsible, that said we purchased a PC and we are a MAC house. So in the end we got her a 12 month Geek Squad and day two used it and then got a different computer as the first was not the quality we were looking for even for a 12 y.o

    • I hear ya! I did the same thing when I got a Surface and hated it, so I traded it in on an iPad. Fortunately, Square Trade was willing to just shift the warranty from one product to the other. Just took a quick Email.

  3. I’ve always thought warranties were a waste of money so I don’t usually buy them. I say usually because I did pay for a warranty a few years ago on my new washer. I don’t know what possessed me. In this instance it was not a waste of money. It was a lemon. It was repaired several times, then it was completely replaced with a new one. Bonus for me. I haven’t paid for a warranty since because I still believe it to be a waste of money.

  4. Great post! The only thing I always get a warranty on is my mac. I’ve always wound up brining it in and getting it fixed. Before it runs out, I bring it to the store and get anything I can replaced.

    I didn’t realize you could buy warranties from outside companies. I’ll have to look into that in the future.

  5. I am an accountant and when I was studying revenue recognition we used warranties as the example. Our instructor told us to never buy them – they were a rip-off. He was well respected in the accounting industry and has written several textbooks. So I never buy them. On the other-hand when I am not around to say NO, my husband always buys them. A couple of years ago he purchased the warranty on our new TV. I was upset when I found out about it, but I must say it has been worth it. We have a real lemon. The computer board or whatever it is called has been replaced twice.

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