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How to Calculate the Cost of an Extended Warranty

A person uses a calculator on a desk next to a notebook and pen to calculate an extended warranty cost

Extended warranties are a great way to save shoppers from expensive repair and replacement costs. Knowing how to calculate the extended warranty cost for your purchase can help you shop smart. You can learn what cost to expect and evaluate if the extended warranty is worth it

An extended warranty, also known as product protection, provides extended protection insurance on your purchases. Because it comes at an additional cost, customers have to evaluate the coverage and costs to determine what they’re saving.

When you’re buying a product, you have many options for extended warranties through different product retailers and warranty companies. It’s important to calculate the warranty cost for the item you’re shopping for and compare it to the expected cost to evaluate your warranty options.

What to include in calculating your extended warranty cost

An extended warranty price represents a percentage of the total product cost. In general, you shouldn’t spend more than 30% of the product cost on a product warranty. But for many product protection plans, you can expect to pay a lot less than 30%. 

When calculating your total cost, make sure to include any other deductibles or service charges that might apply when filing a claim. Here is what your cost calculation might look for a new iPad protection plan with AppleCare+, assuming you file one claim during your plan:

ipad apple warranty-png

Cost of iPad 64 GB:$329

Cost of AppleCare+ 2 year plan: $69
Cost of claim deductible: $49

Total protection cost: $49 + $69 = $118
Protection cost as percentage of product cost: $118 / $329 = .36, or 36%

Assuming you file one claim during your plan, the warranty cost of AppleCare+ is 36% of the purchase price of the iPad. Now we can compare it to the category standard cost ranges to see what you should expect to pay for a protection plan on a tablet. This measure is for a mid-length plan of 3 years, but it should give us a sense of the costs for a plan similar to the AppleCare+ option.

Tablet: for a 3 year protection plan, you can expect to pay between 8-13% of the tablet price.

We can use this cost range to determine what the cost of an iPad protection plan could be:

8% of $329 = $26.32
13% of $329 = $42.77

According to the expected price range for electronics, you can expect to spend between $26 and $43 on a protection plan for an iPad.

Comparing these results, you can see that a protection plan from AppleCare+ is 3 times the amount you should expect to spend, while providing a one year shorter duration of coverage. Calculating the extended warranty cost helps you to identify that you should look for other warranty options to avoid being overcharged. If you find a plan is higher than these ranges, chances are you can find a better deal. 

Why does the price range vary within a product type?

Even within a single product type, there is a range in what you can expect to pay for an extended product warranty. Factors like the product price, product materials, whether it requires specialized repairs or specific parts, where repair technicians are located, and the insurance provider, all affect the final cost of the plan for each product.

For example, a coffee maker with automatic programming and advanced tech will require a different repair cost than a more basic model. The cost of cleaning and protecting a $2000 leather couch will look different than a $200 fabric couch.

Despite the differences, all prices within the listed cost range can be considered a good price for a warranty plan. Remember to price check against other warranty options to make sure to get the lowest prices. The Mulberry browser extension allows you to get a low cost extended warranty option on any site, which makes it easy to compare cost options while you shop.

The cost of an extended warranty in different categories

We rounded up the most common product warranty categories and looked at the costs of mid-length plans to show what you can expect to pay. While longer length plans are more expensive, and shorter plans are less expensive, this list can give you a sense of what to expect based on these 3 year plans.

Here is what you should expect to pay for a 3 year warranty plan for a variety of item types.

Electronics

If you want to see a breakdown of the coverage and costs from top electronics warranty providers, read our blog on the best warranty for electronics to see a side by side comparison for tech like a phone, laptop, tv, and earbuds.

Tablet: a 3 year protection plan will cost between 8-13% of the tablet price.

Smart watch: a 3 year protection plan will cost 10-15% of the smart watch price.

Rugs

With the amount of use rugs get from daily traffic, they are a common household item for shoppers to want to protect. In addition to a rug pad and regularly cleaning your rug, a warranty is a good way to protect your purchase.

Rug: a 3 year plan will cost between 10-15% of the price of the rug.

Furniture

From dining room sets to dressers to living room seating, there is a wide variety in costs, and a wide variety in what it costs to protect each item type at different price points. To make sure you’re not overpaying, read our blog on the best furniture warranty companies to know how to evaluate your options.

Table: a 3 year protection plan will cost between 12-24% of the price of the table.

Couch: a 3 year protection plan will typically cost 10-17% of the purchase price.

Bags and luggage

If you’re a travel fan, you need a bag that can hold up on the road. Whether it’s a backpack you’re putting through the paces on your next outdoors trip or a suitcase that needs to withstand frequent airport trips, getting a protection plan on your bags and luggage helps it to last longer.

Suitcase: a 3 year protection plan will cost between 10-18% of the cost of the suitcase.

Outdoor and exercise equipment

Outdoor equipment warranties can apply to your favorite outdoor supplies, like tents, paddleboards, and other sporting equipment. Exercise equipment, from weights to at home treadmill machines, are also high use items that can take a beating.

Electric bike: a 3 year plan will cost 7-12% of the bike purchase price.

Treadmill: a 3 year plan costs 10-18% of the treadmill cost.

Mattresses

A quality mattress is an investment. Getting a mattress protector, regularly washing your sheets, and getting backed by a mattress accident damage plan is key to help it last. Mattresses are meant to be used for many years, which is why mattress protection plans typically last for 10 years.

Mattress: a 10 year protection plan will cost between 6-12% of the mattress price.

Jewelry and Watches

Another popular item to get insured, jewelry and watches need to be able to endure daily wear. Bent prongs, dull bands, and broken clasps can put your pieces out of use. You can protect your jewelry by extending its lifetime with an extended warranty. 

Necklace: a 3 year plan costs 7-12% of the necklace price.

Ring: a 3 year protection plan will cost 6-12% of the ring purchase price.

Appliances

A coffee maker is one of the most common appliances that customers want to have backed with a warranty, and it’s no mystery why. With most customers relying on their coffee machines daily, these appliances can go through a lot of wear and tear.

Coffee maker: a 3 year protection plan will cost between 14-22% of the price of the coffee maker.

Calculate your extended warranty cost to save money

Plans are hard to compare side by side when they are over a wide range of product categories. By calculating the extended warranty cost for your purchase, you can know what to expect, and you can make sure you’re not getting overcharged.

Happy woman customer and child, with text about 12 months of free product protection

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Janessa McQuivey

About the author

Janessa McQuivey is the Content Marketing Manager at Mulberry. Her degree in Human Development fueled a love of understanding customer experience. She has been in research and writing for 3 years and has covered everything from AI technology to her own dating life. Janessa has published across blogs, newspapers, and academic journals.

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