Are you thinking about whether you should get a home warranty when you buy your next home in Albuquerque? If so, there are definitely pros and cons to purchasing a home warranty.
An extended warranty offers you protection for your home appliances and electronics that goes beyond the manufacturer’s warranty. The cost of buying a home warranty is around $300 to $600 a year for a basic plan, with higher prices for more comprehensive plans or if your home is larger than average.
Some typical items that a home warranty covers are:
- Dishwashers, ovens, refrigerators, washers and dryers and other appliances
- Electrical, HVAC and plumbing systems
- Septic systems or wells
- Pool and spa equipment
- Roof leaks
In some cases, a home warranty can help you save substantially on expensive home repair services. So the big question is, are they worth it?
When it comes to electronics, technology changes very quickly. Today’s technology are more reliable, which can make the price of most extended warranties the same as a repair bill. And that also goes for most appliances.
According to Consumer Reports, there’s only a one in five chance that most home appliances will need to be repaired in the first three years. Most of the time, defects or issues will present themselves in the first year, while it’s still covered by the manufacturer’s warranty.
So does that mean that extended warranties are a waste of money? Not always.
There are some items that it would make sense to cover with an extended warranty. High ticket items such as a $6000 Viking gas range or pricey hi-definition plasma TV would make sense to cover under a home warranty.
A rule of thumb to go by if you’re thinking about buying a home warranty is that the cost of the warranty should be no more than 10% of the purchase price.
And if you decide to skip the warranty, be prepared to shoulder the cost for assessment (service calls), repair (time in labor plus parts) and shipping. Though it’s more of a hassle, this can be the most cost-effective measure. If you have a warranty option of $250 and you experience only one instance in the life of your appliance where it needs $100 of work, you could save $150, or 60%.
Ultimately the choice and risk are yours to assume. Extended warranties can be worth the cost in terms of peace of mind, but only if it’s for a product you don’t intend to change for a few years.
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