Your new air conditioning system cost you a bundle. Should you buy an extended warranty so you won’t have to pay for repairs in case it breaks down?
If you buy a quality system by a reputable manufacturer, it comes with a warranty—at no extra cost. Most heating and air conditioning (HVAC) manufacturers cover the a/c compressor and parts on high-quality equipment for 10 years and labor for up to two years. Your installer also might offer a limited warranty on labor. You can buy an extended warranty on labor, but you probably won’t save any more money than you would if you paid for the labor, if and when it's needed, out of pocket.
Some HVAC salesmen push extended warranties because they’re so profitable to the company that sells them. They’re banking on the fact that your equipment is unlikely to break down before the extended warranty expires. If they’re banking on it, maybe you should, too, and save your money.
Some companies even pay their contractors extra if they can talk homeowners into buying extended warranties. And if you buy an extended warranty from someone other than the manufacturer, it’s possible that the manufacturer won’t honor it. That means you have to pay for the repair yourself and then try to get reimbursed by the company that sold you the warranty.
Consumer advocates typically warn homeowners against buying extended warranties for most products. For the extra warranty to be worthwhile, your air conditioner would have to break at a specific time—after your manufacturer’s warranty has expired but before your extended warranty runs out. How likely is that?
Plus, if you’re a/c breaks after its 10-year warranty expires, you might not even want to repair it. It could be more cost-effective by then to buy a new one that’s more energy efficient or has newer bells and whistles.
If you still feel you should buy an extended warranty on your a/c, get it from the manufacturer. Don’t buy a warranty that costs more than 20 percent of the cost of your air conditioner. And insist on a policy that pays up front for the repair rather than requiring you to chase down a reimbursement.
Know what you’re buying. You don’t need to pay for coverage that you’re already getting for free or for less than what an unscrupulous salesman is pitching.