Should I Get An Extended Warranty On An Air Conditioner? Don’t Buy It

When you buy air conditioning, warranties often come for free with your purchase and last a limited amount of time. But you’re often told that if you really want to protect your appliances, one option is extended warranties.

The promise is they will help you save money in the long term by avoiding repairs or replacements. But you might be surprised that most hvac extended warranties may not be worth their price tag. So, should I get an extended warranty on an air conditioner?

No, you typically should not get an extended warranty on an air conditioner. Extended warranties are a bad deal most of the time. Most air conditioners don’t break within that time frame. Moreover, the typical cost of repairs is usually not much more than the cost of the contract.

Should I Get An Extended Warranty On An Air Conditioner

What Is An Extended Warranty?

An extended warranty is a guarantee being offered and sold by the manufacturer or a third-party provider on top of the purchase price of your new HVAC unit. It serves as extra coverage when the standard hvac manufacturer warranty expires.

It also offers increased length in years of coverage on parts AND labor, which basic warranties rarely cover. Another incentive that some extended warranty companies use is the inclusion of annual maintenance and routine inspection of the AC unit, such as cleaning and/or changing of filters and checking for potential issues.

These types of warranties can be beneficial for consumers who prefer to have the security of an extended warranty in exchange for money now rather than having to worry about not having the funds for repairs in an unforeseeable future. Some users also think in advance that their AC would be more susceptible to damages because their climate requires extended hours of cooling.

Other homeowners reject the idea of spending more on top of an expensive new air conditioner. They rely on their standard warranty and its benefits and set aside a few dollars a month to save up for a possible future repair or replacement.

You just bought your shiny new air conditioning system. But the salesperson cannot just let go of you too easily because right after he finished explaining what your standard warranty covers, he asked one of the most dreaded questions in the history of buying expensive items: “Do you want to have additional protection for your unit with an extended warranty?”

This scenario could go two ways: you feel empowered when you buy an air conditioner and that an extra sum of dollars seems like nothing compared to the advantages. Or you feel guilty and anxious that such a pricey item may incur some inescapable damage that your regular warranty might not cover and cost you some more in the future.

Keep in mind that offering you an extended warranty is not a way for manufacturers and service providers to scam you (at least not all of them). But it is a main source of after-sales revenues.

Home HVAC Manufacturer Warranty Limitations

A warranty is a type of contract or promise by a manufacturer that the product you buy 1) is in good, functional condition; 2) will operate the way it was intended or advertised to work; 3) is subject to repair or replacement at the manufacturer’s expense as long as the damage happened within the agreed period and not because of the user’s negligence or purposeful harm to the device.

A standard or limited warranty that commonly comes with a newly bought AC unit offers a minimum of 1 to 20 years for manufacturing defects, but the longevity of coverage is still depending on the particular model. 

If the unit is successfully registered to the manufacturer’s website within 30 to 60 days from when you buy, the coverage of a limited warranty gets extended to 5 to 10 years (some AC makers advertise up to a lifetime, depending on the product). The basic warranty is now a registered, but still limited, warranty.

Some companies such as Trane present another attractive offer called the "Registered Limited Warranty transfer option.” As said on their website, "you can have even more peace of mind knowing that your reliable Trane system may help you sell your home.” If you are willing to pay a minimum of $59, you can transfer the rights included in the AC limited warranty to the buyer of your house.

You might say, “These lengths of coverage and features of the limited warranty already sound good to me! What would I need an extended warranty for?”

Most basic and registered limited warranties cover only specific parts of the product that have been damaged solely because of the maker's deficiency, but it does not cover labor costs.

The limitations now present themselves when: 1) your air conditioning breaks down after the coverage of your standard or registered warranty has ended, and 2) you want your unit to be covered for both parts and labor.

Service contracts or extended warranties now come into the picture, specifically designed to make up for these limitations of a regular warranty.

Investopedia, a credible source for simplified financial information for both consumers and investors, aptly described service contracts as “insurance” that protects your purchase after the standard guarantee has expired or you want labor expenses to be covered if it requires repair or replacements in the future.

A good number of sources will straightaway advise you against getting an extended warranty. But for you to have an informed decision on the matter, we will look at the possible reasons why you might need a service contract, and also what are the plausible reasons that you can skip it.

Why You Might Buy An HVAC Warranty

If you are the type of person who is future-thinking and gets worked up about what-ifs, especially on expensive purchases like the air conditioning, an extended warranty might just be the thing for you.

The most repeated yet the most effective selling point of a service contract is that it gives you more peace of mind. It is like a security blanket for your mind that when trouble befalls your HVAC unit after your basic warranty expires, you will not have to be anxious to pay for the costly repairs yourself. Or worse, ultimately left with no choice but to buy another pricey unit as a replacement.

If you also anticipate that your AC unit will be in use for more hours in your household than most people use it (especially in states with ridiculously hot climate: “Hello, Florida!”) an extended warranty can do you some good because your cooling device is more susceptible to repairs due to overuse.

In case you decide that the additional price for the service contract is a good enough bargain to prevent you from further worrying about the future, it does not necessarily mean that you are a softie.

But what might make you a pushover is if you have not thought about the purchase of a service contract thoroughly, but just gave in to the salesperson’s convincing power. 

Remember: You do not have to decide right at the counter as you pay for your new AC unit. Most extended warranties can be bought 30 days after the initial purchase. Do your research on which kind of service contract you should get, make calculations on the return of investments, and use clever discernment if the price of an extended warranty is totally worth it.

Why You Would Not Buy An Air Conditioning Warranty

If you are the type of consumer on the other end of the spectrum who worries more about the upfront price than the unforeseeable future, then you might say pass on a service contract. 

A typical extended warranty can cost 10% to 25% of the purchase price of an air conditioning system. That is quite a lot for an upfront payment, especially if you just shelled out hefty funds for a brand-new unit!

Besides the upfront price, most warranties that involve annual or periodical cleaning, checkup, and maintenance will cost you extra bucks per month or per visit.

It is no surprise then that the manufacturers earn big time from these service contracts. According to Allied Market Research, an online hub for business insights and market research reports to large, small, and medium-scale enterprises, “the global market for service contracts reached $120.8 billion in 2019 and is projected to hit $169.8 billion by 2027.”

Are you making a fatal mistake if you did not avail of the extended warranty that you will sorely regret later on? Not necessarily.

Companies can convince you to buy costly service contracts by calculating the probability of your AC unit breaking down multiplied by the average repair price. The dizzying final amount may sway you into thinking that paying that extra hundred now will save you from paying thousands in the unpredictable scenario.

But reliable pro-consumer sources such as the HomeAdvisor, Investopedia, and Consumer Reports are telling you that the likelihood of your appliance breaking during the extended warranty period is "pretty low.” It is because modern technology enables pieces of machinery, equipment, and devices to be long-lasting.

An Extensive View of Extended Warranties

If you ask Consumer Reports, an independent and not-for-profit organization that is dedicated to empowering consumers with reliable product information, if you need an extended warranty for your equipment, the resounding answer is, “NO!”

“Extended warranties or service contracts are a bad deal. Most products don’t break during the time covered by them—typically years two and three of ownership. Moreover, the typical cost of repair is on average not much more than the cost of the contract.”

The brains behind the consumer information hub genuinely believe that the users’ money would be best allocated on a savings account that can serve as a buffer for future repairs or possible replacement, should the need ever arise.

Before you buy any item, especially pricey ones such as the AC, in-depth research of which brands are reliable, which contractors do an excellent installation, and what the manufacturers’ standard warranty already covers, are all valuable steps in ensuring you have that peace of mind you desire.

Getting The Most Out Of Your Air Conditioner’s Warranty

Just to be clear: not every salesman or manufacturer is out to trick you into buying a substandard item, only to leave you hanging in times of trouble. Some manufacturers are indeed confident about standing by their merchandise and will honor your claim if the item proves to malfunction in any way.

What can you do as a buyer to make the most out of your air conditioner warranty, considering that it is a significant purchase in terms of price and length of use?

There are several ways to protect yourself and your new system using the manufacturer or seller’s warranty:

1. Register your unit and its warranty within the specified time by the manufacturer. This is usually done on the company’s website or by the installing hvac company.

2. Avoid using substandard or unauthorized parts to replace the originals. Consult the user's manual, the warranty itself, or the manufacturer's website for parts that are authorized and accepted by the company for use as a replacement.

3. Perform annual maintenance of the unit. Regular check-ups and cleaning of the unit will make the AC unit run more efficiently and neglect will not be able to be used as grounds for the manufacturer to void your warranty.

4. Only hire a certified and licensed contractor to service or repair your AC.

5. Submit proper and adequate documentation such as proof of purchase and receipts of repairs clearly stated by the warranty as requirements to file a claim.

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