Household service contracts, good deal or rip-off?

Question

My mom lives in Florida in a 55+ community. Many of the residents here have service contracts that cover all their appliances: a/c, washer-dryer, dishwasher, fridge microwave etc. The contract will cover repairs (not replacement) of any of these appliances at no charge. When the homes were built the service agreements were only about $100 a year, but now the homes are 8 years old and they are almost $400 a year. Are these service contracts worth the money or is it better just to fix or replace your appliances when they break down?

Answer 1

If you set aside $400 a year for 4 years that is $1,600.

10 years is 4,000.  It sounds like they are trying to sell it as "insurance".

We set aside money and just paid the $400 for the washer.  

Most appliances last at least 5 years. My refrigerator turned 20 in March. It is still going strong.

I am so glad I never paid $400 a year 'just in case'.  Saved me $8,000.      we have spent $1,200 for replacement appliances -- not $8,000.

Just set aside $400 each year in a savings account. Then if an appliance does 'die' you have the money to replace it without paying 'insurance' each and every year forever.

It seemed like every 5 years, one would conk out, so maybe this is the year the refrigerator dies.  It is okay, we are ready for it.

Answer 2

They are Great for the 'Writers', who make a big profit on them...!!

They are OK, when Used & Needed...!!

Answer 3

One refrigerator would be over 400.00, so if all appliances go out in one year you are talking boo-coo bucks. But that is very unlikely. It is a gamble. None may go out for 4 or 5 more years, and then 1 or all could go out this year.

Answer 4

It's a roll of the dice on this one.I liked your question because I have been approached as well.

This would be a good question in AARP,they stay abreast of our interests.

My Best