Conventional wisdom says to skip extended warranties, including the appliance repair programs offered by CenterPoint (Home Service Plus) and Xcel (HomeSmart). Generally, they don't pay for themselves.
The average number of service calls per year with either plan is one. Xcel customers pay $168 a year to cover four appliances ($198 a year at CenterPoint). On Xcel's website, the company estimates the average service call for ranges, dryers and washers to be $215 to $234, considerably more than the annual cost of its service plan. John Nilson, owner of Rogness Service Sales and Parts in Hopkins, estimated repairs on the same appliances to be about $50 less, making the break-even point less obvious.
Not signing up for an appliance plan is hardly risky, but I can think of at least two kinds of customers who might want to consider the service plan -- anyone living paycheck to paycheck, for whom a breakdown is always a crisis, and the person with high-end appliances prone to repair.
Think of the guy with the Mercedes R Class whose car is always in the shop. He probably also has a Sub-Zero fridge and an Asko dishwasher with imminent breakdowns -- at least according to Consumer Reports' reliability ratings. He, and anyone else with designer appliances on a tight budget, is a good candidate for the appliance repair program. Brands such as Thermador, DCS, Viking and Jenn-Air can cost more to repair.
But most people can avoid service plans if they buy appliances with a history of reliability and know of a good appliance repair company with reasonable prices. Check Consumer Reports for appliance ratings and manufacturer reliability. Twin Cities Consumers' Checkbook (651-646-2057, www.checkbook.org) rates appliance repair companies. (Appliance Care in Minneapolis, 612-378-4865, and Maple Grove Appliance, 763-420-5225, were top-rated.)
Readers who have recently purchased a home with old appliances might think that's a good reason to spring for an appliance repair plan, but that's generally not true. The most expensive guts of an appliance are not covered, including the furnace heat exchanger, the water heater tank, the air conditioning compressor and the gas fireplace logs.
If an appliance is so old that parts are no longer available, coverage also can be denied. Xcel's site does a nice job of listing all the covered and non-covered parts for each appliance.
Consumers who have service from CenterPoint and Xcel will find Xcel's plan slightly cheaper ($13.95 vs. $16.50 a month), but Xcel customers cannot make any claims for 30 days after signing up. CenterPoint customers could have an appliance peter out and, ahem, call to get immediate coverage. But CenterPoint requires customers to stay in the plan for one year after the service call.