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Spending Smart: Plan Ahead for Home Appliance Life Spans

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By Gregory Karp

RISMEDIA, September 18, 2010—(MCT)—Home appliances break and wear out, and many consumers are often surprised, almost as if they expect these machines to last forever. But appliances have life spans. A trash compactor lasts just six years, on average, compared with a gas boiler, which typically lasts 20 years, according to a study by ApplianceMagazine.com. Dishwashers tend to last a decade, while clothes washers last about 11 years.

Longtime homeowners know: In any given year, some appliance in a home will break, and, likely, one will go completely kaput.

Life expectancies of home components depend on the quality of the appliance and its installation, as well as intensity of use, says the Study of Life Expectancy of Home Components by the National Association of Home Builders. And, of course, you might replace an appliance before the end of its useful life because of upgraded features, energy efficiency or changing styles.

But knowing average life expectancies of home appliances can be helpful to consumers. Here’s how to use appliance life-span information to your financial benefit.

Repair or replace? If the repair costs half the price of a new appliance, seriously consider buying new, said Mark Kotkin, director of survey research at Consumer Reports. According to the magazine’s research, any major household appliance more than eight years old should be considered for replacement rather than repair. Another generalization from Consumer Reports: Skip the repair and buy new if your appliance costs less than $150. For example, it’s not going to pay to repair an out-of-warranty toaster. “It’s always a question people have, especially older people who are used to repairing things,” Kotkin said.

Budgeting: Business folks know stuff wears out. They talk about capital expenditures and regularly budget for replacing furniture in offices and machines in factories. On the other hand, consumers often say, “Darn, the 15-year-old fridge is busted, and I don’t have the cash to buy a new one,” as if it’s a surprise event. “I’ve seen a lot of people’s budgets over the years, and it seems like household maintenance is one category that people miss,” said Matt Bell, a personal finance author and blogger at MattAboutMoney.com. Consumers who know the age of their appliances and their expected life spans can better budget for replacements by maintaining a special appliance-repair fund. Or they could maintain a more general emergency fund, a cash hoard to be used when bad things happen. Either cash stash will help you avoid placing a new appliance purchase on a credit card you can’t pay off right away, which leads to costly finance charges, said Bell, who suggests squirreling away $100 per month for household maintenance and appliance replacement.

Cash for appliances: Knowing an appliance’s life span might help you decide whether to take advantage of an appliances cash-for-clunkers program. See if your state is still offering incentives to replace old models with energy-efficient ones at energysavers.gov and dsireusa.org. “With the tax credits available now for energy-efficient appliances, when you factor that in with the cost of repair, it might make good sense to go ahead and replace the appliance with a new one,” said Angie Hicks, founder of AngiesList.com, an online site that rates service companies.

Home warranty: A home warranty is a service contract for an existing home that covers breakdown of its major operating systems, such as a furnace, and major built-in appliances, such as a dishwasher. The homeowner buys the one-year service contract and pays a service charge for each call. If many of your major appliances are near the ends of their useful life, a home warranty might be worthwhile. But there are drawbacks. The warranty contracts are complicated, covering some types of appliance breakdowns and not others. Pre-existing conditions and malfunctions that stem from poor maintenance or installation can be excluded. And the home warranty company chooses the repair person for you. “Not being able to use your own repair company with which you have a relationship can be disappointing,” said Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, which besides credit counseling provides consumer education.

(c) 2010, Chicago Tribune.

Distributed by McClatchy-Tribune Information Services.

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