Should You Get the Extended Warranty?

Updated July 2026

When you put up a lot of money and buy a big ticket item, you are understandably worried about it breaking or not working. With most of these items you will get pitched an extended warranty, and usually you will get the pitch more than once. These expensive forms of protection are often tempting when faced with the thought of having to pay the full cost of replacement for the item if it were to break. But are they worth the extra money?

The obvious benefit of the warranty is that it will give you added protection. Most items will come with a general manufacturer’s warranty, often up to 1 year. Sometimes the store selling will extend that warranty another 90 days, but most of the time they will sell a warranty. These warranties are pitched as though they are protecting the consumer, however, the biggest thing they are selling is peace of mind.

The biggest downside is the cost. These warranties do not come cheap, often costing as much as a third of the purchase price. Combine that with the fact that repairs and replacements are rarely needed and the benefits of buying the extended warranty are greatly diminished. Throw in the fact that if you make your purchase with a credit card you usually get an extra 1 year warranty and often double the manufacturer’s warranty and it seems that nobody would ever bother getting one.

Most quality items will come with a manufacturer’s warranty. They usually last for at least a few months, commonly a year, and sometimes for the life of the product. The manufacturer and the store selling the item know how long it will take to wear out, and the average lifespan of the product is always past the period when the extended warranty would end. There is really not much of a reason to pay for the extra warranty when your credit card will provide adequate coverage (before relying on this, call your credit card issuer and find out if this coverage is actually available, not all companies offer it). The extended warranties are often much too expensive for the coverage you receive.

Which Fits Your Situation, Term or Whole Life?

When making those larger purchases it is nerve wracking to wonder what might happen to your new purchase in the coming months and years. If you need this peace-of-mind, then an extended warranty may be able to provide it, for a cost. However, the financial math rarely supports it.

Do Extended Warranties Actually Pay Out?

No, they do not. According to a 2011 FTC report analyzing service contract claims, only 12% of claims were approved and paid by providers like SquareTrade, which was later acquired by Allstate. That means nine out of ten customers who paid for coverage got nothing back.

These numbers are consistent with long-term data from the Consumer Financial Protection Bureau (CFPB), which found that service contract providers often deny claims for minor issues, wear and tear, or failures due to misuse, common reasons that void coverage. In fact, Experian reports that nearly 60% of warranty claims are rejected for technicalities.

Run the numbers on a concrete example instead of taking the industry’s word for it. A $1,200 refrigerator with a typical extended warranty costs $360, or 30% of the purchase price, right at the FTC’s ceiling. If the unit fails after year two, you might get a replacement. But if it fails due to improper installation or water pressure issues (common in homes in Arizona or Texas), the claim will be denied.

Compare that to a savings account. If you set aside $360 in a high-yield account with a 2.5% annual interest rate (as offered by SoFi or Ally Bank), you could earn nearly $90 in interest over three years. That’s $450 saved, more than the cost of the warranty. Run the same math monthly rather than as one lump sum and the case gets even stronger: setting aside just $10 a month toward a repair fund instead of paying $360 upfront for a three-year contract leaves you with $360 in principal plus whatever interest accrues along the way, and you keep the cash if nothing ever breaks. The warranty company keeps your $360 either way.

What Does Your Credit Card Really Cover?

Many people overlook the fact that major credit cards, like those from Chase, Discover, or American Express, offer extended protection as part of their benefits. These typically include:

• 12 months of extra warranty on eligible purchases.
• Double the manufacturer’s warranty.
• Waiver of theft and damage claims, up to $1,000 per incident.

For example, a $1,500 laptop with a 1-year manufacturer warranty might get an additional 12 months of coverage through a Chase Sapphire card. That’s two years of protection for free, no extra cost. Compare that to a store-sold extended warranty on the same laptop priced at 20% of the purchase price, or $300. If your card already doubles the manufacturer’s coverage, you’d be paying $300 for a second year of protection you already have for free. That’s the whole case against buying blind: the coverage gap the warranty is supposedly filling may not exist.

However, this coverage is not universal. The Federal Reserve warns that not all cards offer the same protections. For instance, some prepaid cards or low-tier credit products do not include extended warranty benefits.

Before assuming you’re covered, check your cardholder agreement or call your issuer directly. A FICO Score above 720 improves your eligibility for premium card benefits. As a working threshold: if your card already doubles the manufacturer’s warranty and the store’s contract costs more than 10% of the item’s price for the same window, skip the add-on and confirm the card benefit in writing instead.

How Long Do Common Appliances Actually Last?

Most appliances don’t break early. The average lifespan is much longer than the warranty period. According to the U.S. Environmental Protection Agency‘s ENERGY STAR program, most major appliances are designed to last:

• Refrigerators: 13–18 years
• Washers: 10–12 years
• Dryers: 11–14 years
• Range ovens: 15–20 years

These figures are based on a 2010 Consumer Reports study, which analyzed over 10,000 units. The data shows that failure rates spike only after 10 years. That means most warranties, most of which cap at 3-5 years, are covering a period when breakdowns are unlikely.

Even the most common failure point, such as a compressor in a refrigerator, typically occurs after 8-10 years. If you’re buying a $1,800 fridge with a 5-year warranty, you’re paying for protection against an event that statistically won’t happen for another five years.

Are Some Products Worth the Worry?

Yes, but only in specific cases. High-cost, high-complexity products, like medical devices, industrial-grade tools, or electric vehicles, may justify extended contracts. But even here, the math is questionable.

For example, an electric car with a $50,000 price tag might carry a 4-year battery warranty. But if you’re considering a 5-year extended plan from Tesla or a third party, you’re likely overpaying. The Federal Trade Commission advises that such contracts often do not cover battery degradation, a common failure mode.

Instead, experts recommend setting aside money. The FDIC notes that savings accounts offer better long-term value. A $2,500 emergency fund in a 2% interest account can grow to $2,750 over two years, more than what a $1,000 service contract would return.

Can You Save More by Skipping the Warranty?

Yes. By skipping the extended warranty, you gain access to that money. You can then use it to build an emergency fund, pay down debt, or invest.

For instance, if you save $300 from skipping a warranty on a $1,000 TV, you could deposit it into a SoFi savings account. Over five years at a 2.5% interest rate, that grows to $340. You’d have more money than if you’d paid for a two-year extension that never paid out.

Plus, saving gives you control. If the device fails, you can decide whether to repair it, replace it, or wait. You’re not locked into a provider’s terms. The tradeoff is real, though: if the TV dies in month 13, a month after the manufacturer’s warranty runs out, you’re on the hook for the full repair or replacement cost, and $300 in savings might not cover a full-panel replacement. Self-insuring only works if you actually keep the money set aside rather than spending it, and if you can stomach an occasional loss year.

Frequently Asked Questions

Are extended warranties ever worth it?

Only in rare cases, such as for high-cost, complex items with a history of early failure. For most electronics, appliances, and vehicles, they are not.

According to the FTC, only 12% of claims are paid. That makes them a poor investment for most people.

How do credit card warranties work?

Many major cards, like those from Chase, Discover, and American Express, offer 12-24 months of extended protection on eligible purchases. This includes theft, damage, and mechanical failure.

Check your card agreement. Not all cards offer this. Those with lower FICO Scores may be excluded.

What’s the average lifespan of a washing machine?

Most washing machines last 10–12 years, according to the U.S. Environmental Protection Agency and Consumer Reports.

This far exceeds the 1-3 year warranty period. So paying for extended coverage is rarely justified.

Do service contracts cover wear and tear?

No. Most contracts exclude wear and tear, improper use, or damage from water or power surges. These are common claim denials.

The FTC lists these as standard exclusions. Even if you paid extra, you may get nothing back.

Is it better to save money than buy a warranty?

Yes. A $300 warranty on a $1,000 appliance might cost 30% of the price. By saving that $300, you can earn interest or use it for other needs.

For example, a 2.5% return over three years adds $23 in interest, more than the cost of many basic repairs.

Which companies offer extended warranties?

Common providers include Allstate (via SquareTrade), Best Buy, AppleCare, and Samsung Care. But even these are not always reliable.

Check the fine print. Most deny claims for minor issues, and coverage often ends after 3-5 years.

Can I get a refund on an extended warranty?

Some providers allow refunds if you cancel within 30 days. But many do not. And after that, refunds are rare.

Always read the cancellation policy. Many contracts are non-refundable after the first 30 days.

Do warranties help with repair costs?

Only if the claim is approved. But approval rates are low, just 12% according to FTC data.

Most repairs are done by the consumer, or paid out of pocket. The warranty rarely covers the full cost.

What about used or refurbished items?

Extended warranties are almost never worth it on used or refurbished products. These often have shortened lifespans and higher failure rates.

Instead, buy a used item with a known history. Or use a credit card’s protection if available.

Do extended warranties cover software issues?

No. Most service contracts cover only hardware failures. Software glitches, bugs, or updates are excluded.

For example, AppleCare does not cover app crashes or data loss. The same applies to Samsung and other providers.