What is the true cost of a home warranty versus paying for repairs yourself? Is it worth it?
Here are my numbers.
Home purchased in March 06, warranty paid for 1 year by seller. I continued the warranty on a monthly basis at $47 for piece of mind. My home is 16 years old.
Year 2, AC broken, cost of part $1800; labor $200
Year 3 relay switch on thermostat broken $250
Today broken water heater total replacement and initial diagnosis cost $600. Yay brand new one!
Total cost of repairs excluding some labor time was $2,850, I've paid $1410 to the warranty company in monthly dues and $60 deductibles for each occurrence.
I've saved $1260 over the last few years.
I highly recommend you encourage buyers to extend the home warranty on homes 10 years or older. It's not a bad idea and definitely worth the piece of mind.
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