Service Agreements Are Not Always Worth The Money

Many new and some refurbished appliances come with optional service agreements. The prices and terms of the service agreements vary. Some are for one year terms and others are for two or three year terms. They range in price from under one hundred dollars for some small appliances such as microwaves to several hundred dollars for top of the line large appliances such as refrigerators or washing machines.

Service agreements are meant to be a form of insurance for you. You spend a lot of money on a new appliance that is critical to your household and you are given the option to purchase insurance on that appliance so that you will not have to spend a lot of money if you have an appliance repair that needs to be done. However, like any form of insurance the insurer is in business to make money and counts on the fact that more people than not, will never make claims on their service agreement. So, how do you know if a service agreement is right for you? Here are some things to consider:

The Price of the Agreement and What it Covers

Not only do you want to find the agreement that is the lowest in price but you also want to find the most inclusive agreement possible. You do not want to spend a lot of money on a service agreement that only covers a few isolated types of repairs.

The Cost of Potential Repairs

There are two factors to consider when determining the cost of potential repairs. The first is the cost of replacement appliance parts and the other is whether you will be doing the work yourself or paying a technician to perform the work. If you can do the work yourself and the cost of the appliance parts is low then a service agreement is unlikely to benefit you.

Appliance Reviews

It is worth doing a little research into the appliance that you are purchasing to find out how it has been performing for other users. For example, if you purchase a Whirlpool appliance with authentic Whirlpool parts and it has a good reputation for reliability then a service agreement might not be an expense that is worth your while.

Deciding whether or not to purchase a service agreement is a personal choice. You need to consider the value of the appliance, the cost of the agreement, what it covers and the potential cost of the repairs and then you can decide whether or not to proceed with purchasing a service agreement for your recently purchased appliance.