Estimate a covered failure
Use a plausible repair or replacement payout—not automatically the full retail price.
← All calculatorsFree shopping calculator
Is an extended warranty worth the price?
An extended warranty transfers repair risk for an upfront fee. Expected-value math cannot measure peace of mind, but it can show whether the price is high or low relative to your estimated chance and cost of repair.
01
LiveEnter your numbers
Your result
Skip it on expected value
Expected repair cost: $100.00The repair chance would need to be 35.8% for the warranty to break even.
Compare the warranty price with the probability-weighted covered repair cost, after deductibles, exclusions, overlapping coverage, and claim limits.
Reviewed October 12, 2026 by Ship or Spend Co.How the calculation works
A clearer way to compare.
Expected repair cost = repair probability × likely repair cost. Break-even probability = warranty price ÷ likely repair cost.
A $179 warranty covering a likely $500 repair needs about a 35.8% chance of a covered repair to break even. At a 20% estimate, expected repair cost is $100.
Use the result without fooling yourself.
Apply the failure probability
Multiply the covered loss by the chance it occurs during the genuinely additional warranty period.
Compare all protection costs
Include the premium, deductible, diagnostic fees, shipping, and any costs the policy excludes.
Worked comparisons
Three examples that change the answer.
These examples use the same method as the calculator and show why the inputs—not the promotional headline—decide the outcome.
Premium exceeds expected loss
$179 warranty · 20% failure chance · $500 repair
Expected repair cost is $100; warranty costs $79 more.
The plan has negative expected value under these assumptions.
Near break-even coverage
$120 warranty · 30% failure chance · $400 repair
Expected repair cost is $120.
The financial values tie before deductibles, exclusions, or the value of service.
Deductible reduces protection
$90 warranty · 25% chance · $500 repair · $100 deductible
Expected covered loss is $100, based on a $400 net payout.
The plan is only $10 below expected loss, not $35 below it as a no-deductible estimate suggests.
Important exceptions
Cases that can change the answer.
Overlapping coverage
Manufacturer, retailer, statutory, or payment-card protection can reduce the extra period the plan actually covers.
Claim limits and depreciation
The provider may repair, replace with refurbished goods, issue store credit, or cap payment below retail value.
Risk tolerance
Expected value does not measure the personal benefit of avoiding a financially disruptive surprise.
Extended Warranty FAQ
Does a negative expected value mean never buy the warranty?
No. It means the average financial return is unfavorable under your assumptions. Service quality and protection from a high-impact loss may still matter.
What probability should I enter?
Use evidence relevant to the product and covered period when available. Avoid using lifetime failure rates for a short warranty term.
Should the manufacturer warranty be included?
Yes. Count only failures and costs that the paid plan covers beyond protection you already receive.
Transparent by design
Know what the result means.
Ship or Spend shows the formula, assumptions, and complete comparison rather than hiding the answer behind a score. Read our calculation methodology for limitations and testing details, and our update log for recent editorial work.