November 17, 2017

You Probably Don’t Need That Extended Warranty

Straight from PR Newswire: J.D. Power and Associates Reports: High Reliability of Major Home Appliances May Reduce Need for Extended Warranties

According to J.D. Powers and Associates 2007 Major Home Appliance Study, most major appliances these days are quite reliable, yet many consumers continue to purchase extended warranties.

The study measures customer satisfaction in nine segments of major home appliances: dishwashers; free-standing ranges; built-in cook-tops and wall ovens; freezer-on-top style refrigerators; side-by-side and French door-style refrigerators; clothes washers; clothes dryers; over-the-range microwave ovens; and counter-top microwave ovens. The study, now in its third year, examines customer satisfaction with microwave ovens for the first time. Customer satisfaction is measured based on performance in six factors: operational performance (including how well the appliance functions, noise level and energy efficiency); operational features (such as the number of settings available and appliance capacity); ease of use; styling and feel; price; and warranty.

The study finds that during the first two years of ownership, approximately one in 10 consumers report some kind of problem with their major appliance. However, many of these problems can be resolved by following instructions in the owner’s manual or on the manufacturer’s Web site. Relatively few problems actually require a service visit.

Despite this high degree of reliability, many consumers purchase an extended warranty for their appliances. Among owners of refrigerators, stoves, dishwashers and laundry appliances, approximately 25 percent report purchasing an extended warranty, while approximately 15 percent of microwave oven owners do so.

“Extended warranties certainly provide a degree of peace of mind,” said Dale Haines, senior director of the real estate and construction industries practice at J.D. Power and Associates. “With some appliances — particularly those with complex electronics and potentially high repair costs — purchasing an extended warranty may make sense. However, major appliances tend to be very reliable, and consumers should consider very carefully — depending upon their circumstances — whether an extended warranty is worth the additional cost.”

In satisfying customers with major kitchen and laundry appliances, Bosch, GE Appliances, Kenmore, LG, Maytag, Samsung, Whirlpool and Whirlpool Gold rank highest in various segments.

“Particularly strong performers include Bosch, LG and Samsung, which have achieved consistently high satisfaction levels in consecutive years,” said Dale Haines, senior director of the real estate and construction industries practice at J.D. Power and Associates. “For two consecutive years, Bosch has ranked highest in the dishwashers segment and LG has ranked highest among clothes washers, while Samsung has earned an award in a refrigerator segment for three consecutive years. This is especially impressive considering the high levels of quality and reliability that many appliance manufacturers attain.”

The 2007 Major Home Appliance Study is based on 22,637 responses from consumers who purchased one or more new major home appliances through a retail store, their new-home builder, or received one through other means (such as a gift) during the previous 24 months.