"Extended warranties are highly valued by the companies selling them, because they're rarely utilized and thus represent pure profit for the seller. "
And one reason they are not highly utilized is that when you go to use them, most of the companies will come up with any excuse they can to claim that the needed repair is not covered.
Put the $700 in the bank, and use it to make any repairs that might come up in the 10 years. If any repairs come up, chances are they'll be less than $700 (and you get to pick who does them), and if there aren't any repairs, you've still got the $700 at the end, plus interest.
Extended warranties are highly valued by the companies selling them, because they're rarely utilized and thus represent pure profit for the seller.
--PC acting up again with OE. Might be a duplicated post. If so, I apologize--
Hello:
A bit surprised on the quote by the Installer for a 10 yr P&L extended warranty for a new Trane Gas Hot Air furnace
(residential; the 80% model, 120 K, 2 stage, with var. speed blower) Model No. TUD 120 R 9V5K
Does $700 sound in the ball park for a 10 yr P&L for this type of unit ?
Thanks, B.
About $350 goes into the pocket of the salesman as soon as you buy it. The other $350 goes to the insurance company where they take out the actual cost of servicing the contract (likely about $200), profit and overhead. Do your self a favor and put the money in the bank.
Do as the others have said and put the cash in the bank and use it to pay for the repairs! My last furnace ran fifteen years with $5 in parts. I fixed it myself as I do HVAC for a living, but if I paid someone to come out I would not have spent over $150 for service. Our company does not promote warranties.
The other problem is dealing with the warranty company. You generally get the bottom of the barrel for a service company because a good company is too busy to deal with the B.S. of doing the warranty. Also you probably will not get the unit fixed to your satisfaction. The warranty company will nickel and dime the repair, doing the bare minimum to get it running again.
I had a service call a few years ago that was a warranty call. (first and only warranty call I ever did!) The homeowner had trouble finding anyone to come out as it was a warranty deal. We agreed to come out on the condition that we would charge the home owner, and credit them back if/when we got paid from the warranty company. I found the problem, had the part on the truck, but could not get the warranty company to return our phone calls to approve the repair! As it was -20F and the home was about to freeze I did the repair anyway. We spent the next six months trying to collect for a repair that was not approved! I don't think we ever got paid from the warranty company. Lucky for us that we did collect from the home owner! Greg
Read on.
If I get a call from a customer that has a home warranty, I tell them they will pay me up front and submit the claim to the warranty company themselves. If the company calls me, I will answer their reasonable questions, but I tell them up front that I will start charging for my time after the first 10 or 15 questions.
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