In last week's installment, we posited that there is an inverse relationship between appliance price, and the percentage ratio of extended warranty price to appliance price. As such, we hypothesized that we would see extended warranties cost a larger proportion of the total price of inexpensive appliances — meaning lower percentage averages for expensive appliances, and higher percentage averages for low-cost appliances.

Testing this, last week, we found that the average range extended warranty cost 10.5% of the total appliance price, the lowest average percentage among the major kitchen appliances.

This week, we're testing the other side of the theory, by gathering data on one of the least expensive common kitchen appliances, the microwave. As expected, we found that the average microwave extended warranty cost 19% of the total appliance price, the highest average we've seen throughout this series.

We found an amazingly wide range of microwave service contracts. At the low end, we found a $10 two-year ABC Warranty Plus plan from ABC Warehouse, which cost 0.5% of the $1,899 built-in microwave it covered.

At the high end, we found one extended warranty that cost the same price as the appliance it covered, a $140 three-year Ironclad Product Protection from Warners' Stellian, which covered a $140 microwave.

Furthermore, we actually found three extended warranties, each publicly available from a different online retailer, which cost more than the price of the appliance they protected. That means it's actually cheaper to replace the microwave out of pocket, rather than buy the protection plan.

We found a $300 seven-year Samsung Care+ plan, which cost 104% of the $289 microwave it covered; a $149 five-year Orville's Preferred Service Plan from Orville's Home Appliances, which cost 127% of the $117 microwave it covered; and, finally, a $210 five-year Ironclad Product Protection plan from Warners' Stellian, which cost 150% of the $140 microwave it protected.

Methodology

To create this newsletter, we gathered data on 207 different microwave extended warranties, sold by 25 different online retailers.

We collected data for three different types of microwave, countertop, over-the-range, and built-in. In our data, we did not further specify volume capacity, nor did we specify wattage.

For each online retailer, we did a range sort for price low to high, and gathered data on the extended warranties offered for the least expensive microwave that had an option to add a protection plan. Next, we did a range sort for price high to low, and did the same. Depending on the amount of stock and variety for each retailer, we then gathered data on one to four microwaves in the middle of the price range, in order to get a representative sample of the extended warranties for sale.

Extended Warranty Online Retailers

We gathered data on range extended warranties sold by 25 different online retailers, half nationwide U.S. retailers, and half regional retailers selling service contracts in just one or a few U.S. states.

The national retailers were: Amana, Amazon, Best Buy, Frigidaire, GE Appliances, Home Depot, KitchenAid, LG, Lowe's, Maytag, Menards, Samsung, Walmart, Wayfair, and Whirlpool.

The regional retailers were: ABC Warehouse [MI], Abt Electronics [IL], Big Sandy Superstore [KY, OH, WV], BrandsMart USA [FL], Electronic Express [TN], Jetson TV & Appliance [FL], Orville's Home Appliances [NY], P.C. Richard & Son [NY], RC Willey [UT, ID, NV], and Warners' Stellian [MN, IA, MO].

Service Contract Obligors and Administrators

The sample of regional retailers in this survey include several that administrate their own in-house extended warranties and local repair networks. These retailers are: ABC Warehouse, Abt Electronics, Big Sandy Superstore, Electronic Express, Jetson TV & Appliance, P.C. Richard & Son, RC Willey Home Furnishings, and Warners' Stellian. In addition, Electronic Express uses local company Alliance Warranty Solutions, and Warners' Stellian uses local company Ironclad Home Services.

Assurant provides the protection plans sold by Best Buy, Lowe's, GE Appliances, and Samsung. Allstate provides the plans sold by Home Depot, Menards, Walmart, and Wayfair. Asurion provides the plans sold by Amazon and LG. Domestic & General USA provides the plans sold in the online retail shops of Whirlpool, Maytag, Amana, and KitchenAid, all owned by parent company Whirlpool Corp.

Please take a look at our recent newsletter "Service Contract Pricing: Dishwashers" for more information on the administrators, obligors, and underwriters behind the appliance protection plans detailed in this newsletter.

Survey Results

First, we will present some initial findings about the microwaves, and attached extended warranties, that we surveyed. Figure 1 shows the brands of the microwaves for which we collected data.

The most common microwave brand in our survey was GE Appliances, followed by KitchenAid, then Frigidaire. In the Other category, the brands were, in order of frequency: Amana, Viking, Maytag, Monogram, Hotpoint, Midea, Avanti, Insignia, Thermador, Bosch, Comfee, Mainstays, Vissani, and Continental.

Figure 2 shows the price ranges of the microwaves in our survey.

The most common price range was $50 to $250, followed by $250 to $500, which makes sense considering we prioritized data collection from the least expensive microwave sold by each online retailer.

As we can see from the spread of frequency in the higher price ranges, we found that the most expensive microwave sold by each retailer was anywhere between $1,000 and $3,800.

Overall, the microwaves ranged in price from $50 to $3,735. The least expensive microwaves tended to be countertop models, and the most expensive tended to be built-in models, especially the convection microwaves with air-fry features.

Figure 3 details the types of microwave models for which we collected data in this survey.

We gathered data on 105 over-the-range microwaves, which are also range hoods, along with 60 countertop microwaves, and 42 built-in microwaves. Some of the built-in microwaves are under-cabinet models, and some were drawer models. Many of the microwaves also had convection oven functionality.

Our next two charts detail the extended warranties attached to the microwaves in our data set. Figure 4 shows the length of the microwave service contracts.

The most common extended warranty length was three years, followed by five years.

15 of the 16 one-year extended warranties were sold by appliance OEMs, and started after the manufacturer's warranty expired. The one exception was an $8 one-year plan sold by Menards, which protected a $65 countertop microwave (12%).

The two seven-year extended warranties were both Samsung Care+ plans, and the three eight-year extended warranties were sold by P.C. Richard & Son. We did not find any six-year microwave extended warranties available online.

Figure 5 goes into further detail on the start date of these microwave extended warranties, whether they started at the date of appliance purchase, or after the expiration of the manufacturer's limited warranty.

164, or 79%, of the microwave extended warranties started at the date of appliance purchase. 43, or 21%, of the microwave extended warranties started after the manufacturer's warranty expired.

The online retailers selling extended warranties that started after the limited warranty expired were: Amana, Frigidaire, GE Appliances, KitchenAid, LG, Maytag, and Whirlpool. All these are OEMs, which also administrate the limited warranty, along with the extended warranty.

One- and Two-Year Service Contracts

To create the following charts, first we calculated the percentage ratio between the extended warranty price and the appliance price. Next, we plotted the price of each service contract, compared to each percentage.

Figure 6 shows the price pairings for the one- and two-year microwave extended warranties. In Figure 6, the one-year service contracts are in purple, and the two-year service contracts are in blue.

At the low side of the price pairings, we found a $10 two-year ABC Warranty Plus plan from ABC Warehouse, which cost 0.5% of the $1,899 built-in microwave it protected.

At the high side, we found a $100 two-year Ironclad Product Protection from Warners' Stellian, which cost 71% of the $140 countertop microwave it protected. This plan was a significant outlier, with the next-highest percentage at 25%.

The average one-year extended warranty cost 8.5% of the total microwave price. Eight plans were below average, and eight plans were above average.

The average two-year extended warranty cost 13.5% of the total microwave price. 25 plans were below average, and 14 plans were above average.

The most expensive was a $350 two-year Extended Warranty with AWS plan from Electronic Express, which cost 10% of the $3,600 microwave price.

Three-Year Service Contracts

Figure 7 shows the price pairings for the three-year microwave extended warranties.

At the low end of the price pairings, we found an $18 three-year ABC Warranty Plus plan from ABC Warehouse, which cost 0.9% of the $1,899 built-in microwave it protected.

At the high side, we found a $140 three-year Ironclad Product Protection plan from Warners' Stellian, which cost 100% of the $140 countertop microwave price.

Next to that plan, we found a $109 three-year Orville's Preferred Service Plans plan from Orville's Home Appliances, which cost 93% of the $117 countertop microwave it covered.

The most expensive three-year extended warranty cost $530, also covering the $3,600 microwave from Electronic Express.

The average three-year extended warranty cost 16% of the total microwave price. Thus, 47 plans were below average, and 19 plans were above average. This average was clearly driver up by those high outliers.

Four-Year Service Contracts

Figure 8 shows the price pairings for the four-year microwave extended warranties.

At the low side of the price pairings, we found a $77 four-year Walmart Protection Plan, provided by Allstate, which cost 2% of the $3,735 built-in microwave it covered.

At the high side, we found a $139 Abt Local Extended Protection Plan from Abt Electronics, which cost 46% of the $299 over-the-range microwave it protected.

The most expensive four-year microwave protection plan cost $700, and also covered the same $3,600 built-in from Electronic Express.

The average four-year microwave extended warranty cost 20% of the total appliance price. 16 plans were below average, and eight plans were above average.

Five-, Seven-, and Eight-Year Service Contracts

Figure 9 shows the price pairings for the five-, and seven-, and eight-year microwave extended warranties. In Figure 9, the five-year service contracts are in blue, the seven-year service contracts are orange, and the eight-year service contracts are in purple.

In Figure 9, the red line emphasizes the 100% threshold, to draw attention to the fact that these three extended warranties actually cost more than the microwaves they protected.

At the low side of the price pairings, we found a $30 ABC Warranty Plus plan from ABC Warehouse, which cost 1.6% of the $1,899 built-in microwave it protected.

At the high side, we found three microwave extended warranties more expensive than the appliances they protect. We found a $300 seven-year Samsung Care+ plan, which cost 104% of the $289 over-the-range microwave it protected.

We also found a $149 five-year Orville's Preferred Service Plan from Orville's Home Appliances, which cost 127% of the $117 countertop microwave it protected. Finally, we found a $210 five-year Ironclad Product Protection from Warners' Stellian, which cost 150% of the $140 countertop microwave it protected.

The average five-year microwave extended warranty cost 26% of the total appliance price. 41 plans were below average, while 16 plans were above average.

The average seven- or eight-year extended warranty cost 44% of the total microwave price. Two plans were below average, and three plans were above average.