Warranties are sometimes bashed as a waste of money, because so-called financial gurus think you should save up cash for the repairs instead of paying for a warranty. Yet they don’t tell you to forgo insurance, a product that is very similar to a warranty. Here are a few reasons why you should start appreciating warranties.
It Reduces Your Need for an Emergency Fund
You’ve probably heard the advice to have several thousand dollars saved up in case an emergency occurs. You need that money set aside to cover medical bills and car repair bills. However, if you have a good home warranty, you won’t have to raid your emergency fund to pay for repairs for a broken air conditioner or dead hot water heater. Note that your home warranty can be tailored to cover things like a pool pump and other items that are expensive to repair. Select a warranty that provides you total coverage for everything you’re concerned about. You can save money by increasing your deductible, assuming you’ve set aside that money in case it is needed, or dropping types of coverage you don’t need.
It Can Save You Money
If you don’t have much in terms of savings, a warranty will end up saving you money over the long-run. Regularly quarterly or annual payments for the home warranty force you to pay toward the repairs you’ll eventually have to face. The side benefit of having a home warranty is that you won’t end up charging the repairs on a credit card and pay the repairs off with interest over the next few years. Furthermore, good home warranties keep up with the rising cost of parts and labor.
Furthermore, a number of warranty programs require you to engage in the ongoing maintenance of your equipment that many forgo in the name of cost-savings. For example, a warranty program may require you to have the air filters replaced and the HVAC equipment inspected two or three times a year. This is equivalent to your health insurance company requiring you to see your doctor for an annual well check and accepting preventative care. The inconvenience and minor ongoing expenses prevent the bigger problems down the line that cost much more to correct.
And if something serious does go wrong, the home warranty will pay for repairs for covered items like water heaters and plumbing while you pay for the restoration of the soggy carpets. This reduces the overall cost you’ll pay out of pocket if disaster does strike.
It Can Help Sell Your Home Faster
A home warranty should be something you take out as soon as you plan on putting your home on the market. A transferable home warranty will help you sell the home faster, since it gives home buyers peace of mind. They are more willing to buy a home with an older air conditioner or furnace if they know that the warranty will cover the repair bill if it breaks down in the next year. If you live in Virginia, a Virginia Home Warranty will allow you to focus on cleaning up the property and staging the property, knowing that sudden breakdowns are covered by the warranty. Then you won’t need to spend precious cash repairing critical items out of your own pocket or have to give up cash at closing for last minute repairs so the buyers will close on the property. This is another example of how a warranty protects you from massive repair bills when you can least afford them.
Home warranties should be seen as an investment in your home, not a liability. They can save you money over the long-run and help you sell your house quickly if you’re going to be moving.