Are appliance extended warranties worth it?

When you reach a certain age, home appliance shopping is something to be excited about. It's easy to drop a significant chunk of money on that new fridge with french doors, and it's really rather odd how delighted you can be over a standard household appliance.

As you finalize the purchase and arrange delivery, the store will likely ask if you want to pony up some extra cash for an appliance extended warranty to supplement the manufacturer's warranty.

But should you spring for the extended warranty or go with a home appliance warranty? And which warranty provider is best?

If you do your research beforehand (i.e., read this article because we did the research for you), you can go to the store armed with an answer.

We found out about the differences between a manufacturer's warranty, a retailer appliance extended warranty and home appliance warranties. Here's what we learned.

The main differences between a manufacturer's warranty and a retailer's extended warranty are who provides the coverage and what the warranties cover.

A manufacturer's warranty generally will only cover replacement or repair if the issues exist prior to the purchase. These warranties are also included in the price of the appliance and are usually valid for one year to cover the costs associated with functional parts and labor.

An appliance extended warranty is issued by the store selling the item and offers a wide range of benefits over several years. So, when the original manufacturer's warranty expires, you have an extended appliance warranty to fall back on.

In addition to 24/7 online support or covering the cost of parts and labor, some appliance extended warranty plans will even reimburse the cost of food spoilage or laundry services if your refrigerator or washing machine goes on the fritz.

Some extended appliance warranties also partially repay customers who don't use the plan or allow customers to transfer coverage to a new owner if they sell an appliance covered under a protection plan.

Home warranties cover partial service costs for normal wear and tear on appliances — things like repair of mechanical components that might break down over time. Think of it like insurance (even though it's not). You pay a monthly fee or annual premium and if (when) your fridge breaks down, you get discounted service on covered appliances.

Which warranty provider has the best comprehensive appliance coverage? To see what extended warranties have to offer and which stores might have the best deal, we crunched some numbers to see if they’re worth it.

Here's a look at the extended warranty option from four nationwide stores that sell major appliances, and what they have to offer.

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(Note: Since some stores base the cost of extended warranties on the price of the appliance, we used a $1,000-$2,000 price range for all four examples.)

Not only does this extended warranty protect your appliances after the manufacturer's warranty ends, but it also enhances the coverage while the manufacturer's warranty is still in place.

3-year: $159.99; 5-year: $349.99

Benefits:

Read here for more details on Best Buy's extended warranty.

Home Depot's extended warranty even covers 50% reimbursement for the replacement costs of some cosmetic parts and features a two-day service guarantee for some metro areas.

3-year: $550; 5-year: $699

Benefits:

Lowe's offers an appliance warranty that helps you pay the cost of reinstallation when you need to hook your appliance back up. The extended warranty also provides replacement coverage if you end up with a lemon.

3-year: $139.97; 5-year: $229.97

Benefits:

Appliance extended warranties are built into the purchase price of home appliances for Costco members. Various levels of membership alter the warranty's terms, but basic coverage details for appliance extended warranties include home delivery, installation, fast replacements and haul-away services.

3-year: $119.99; 5-year: $229.97

Benefits:

A home appliance warranty is similar to an insurance plan, and just like retailer extended warranties, it will vary depending on the coverage details of the different home warranty providers. We’ve rounded up a list of some of the best home warranty companies.

Rated in the top five home warranty companies by thisoldhouse.com and consumer advocate.org, American Home Shield was founded way back in 1971, so the company offers customers reliable coverage.

Consumer Affairs accredited home warranty provider Select Home Warranty works with an impressive network of authorized service technicians and assigns you a local professional.

An Inc. 5000 company, Choice Home Warranty allows you to tailor your home appliance warranty to your needs.

If you’re ready to skip the expense of an extended protection plan but don't want to entirely fly by the seat of your pants and hope your appliance never breaks down, you’ve got some alternatives.

To decide which warranty provider is the best choice for your major appliances, ask yourself a few questions.

What does the manufacturer's warranty cover, and how long will my new appliance be covered? Do I need more coverage?

Will paying upfront for the extended warranty give you peace of mind for when your appliances inevitably break down? If you are able to save some money every month, you could forgo this expense in favor of a rainy day fund. Parking the money in an interest-bearing savings account earns you a bit of interest, but you’ll need to be diligent about setting those dollars aside.

Do I have a house with older appliances that are likely to break down in the next few years? If yes, a home warranty might be right for you.

This story originally appeared in The Penny Hoarder.