Extended warranty worth it?

Worked example

A plan costs $150. A covered repair would cost $400 with no service fee. If you think there is a 20% chance of a covered failure, the expected payout is 20% x $400 = $80, so the plan costs $70 more than it is expected to return. It would break even at a 37.5% failure chance ($150 / $400).

How it works

Paid per claim = repair cost - service fee. Expected payout = failure chance x paid per claim. Net cost = plan price - expected payout. Break-even failure chance = plan price / paid per claim. This tool has no failure-rate data, so the answer depends on the chance you enter; check reviews, the manufacturer’s own warranty and whether your credit card already extends it.

Sources and basis (checked 2026-10-08): arithmetic on the price, repair cost and failure chance you enter; no failure-rate data is used.

FAQ

Is an extended warranty worth it?

It is if the chance of a covered failure is higher than the break-even chance shown, or if a surprise repair would be hard to pay for. Enter your own estimate to compare.

What is the break-even failure chance?

It is the plan price divided by what the plan pays per claim. If you think failure is more likely than that, the plan is expected to pay off.

Where do I get the failure chance?

From your own experience, owner reviews or repair-rate surveys. This calculator has no built-in data, so treat the result as only as good as your estimate.

What about the manufacturer’s warranty?

Failures are often covered for the first period anyway. Use the chance of a failure after that period, within the extended plan’s term.

Why include a service fee?

Many plans charge a fee per claim, which reduces what the plan really pays.