Why are extended warranties a waste of money?

Extended Warranties Are Rarely Worth Your Money. Products don't break on their own, and when they do, the price of repairs is usually lower than what you would spend on an extended warranty. Sure, some people have saved a lot of money with extended guarantees. Most major card issuers offer this benefit and you can often double the manufacturer's warranty for up to 12 months, Schulz said.

Sometimes we get them in the power tools we buy. That way, they'll be covered for a while anyway. I opted for 2 years on this laptop, but only because after buying the first one, my stupid cat threw it off the couch and it was gone. Oh, and we always pay the extra money for the lifetime warranty when we buy auto parts.

That way, if they break, we replace them, no questions asked. The more the better I have seen that some go up to 25-30% of the purchase price. Expanded guarantees are a great source of income for companies. They play with your emotions with this product, which is usually a bad deal for you.

Dad's Green Life For some things yes, it's a waste of money. I bought headphones for my children over a year ago, I paid about 25.00 on sale, I paid another 5 for warranty, even cheaper than paying the full price, and I have replaced them at least 3 times for free. For the vast majority of people, the answer is a big no. Even Consumer Reports says it's money thrown down the drain.

Often, extended warranty repairs take forever or require several attempts to get it right, you see it much less if you simply pay for a repair outright. You may be instructed to ship your broken product for who knows how long before it is repaired. The chances that the warranty will allow a local establishment of your choice to do the repair are very unlikely, so you can't even claim the device if the repair takes too long. It is almost always better to deal with the manufacturer for repairs that have a reputation to maintain.

Local laws, depending on your state, may also offer protection in the form of an implied or statutory warranty, which means that if you buy something, it is supposed to work, flawlessly, for a certain period of time. That period may vary, but it is usually four years. This looks a lot for cars, especially. So, a service plan might be worthwhile for a laptop if you're carrying it on planes, trains, and cars; on a mountain or at a LAN player party where drinks are likely to spill.

Again, carefully consider your personal use. Read the fine print: An extended order could cover only certain things and not others, such as accidental damage, which means that a milkshake spilled on a gaming laptop ends that relationship. Learn more about electronics insurance (and everything in between) at Lemonade, one of many new application-based peer-to-peer online insurance providers. Shows that the list of hazards covered by homeowners or renters insurance can range from the usual (fire, theft, smoke) to the unusual (riot, volcanic eruption).

Some experts suggest that an extended warranty could ease the stress of unreliable car owners. But if you're looking for a vehicle known for its reliability, a warranty isn't likely worth it. In addition, instead of buying coverage, you can always choose to reserve an emergency repair fund. In addition, half of the extended warranty usually goes directly to the seller's commission, not to you.

Mobile phones, especially, are one of the most common items where people buy extended warranties without even thinking about it. The extended automaker's warranties are available exclusively for cars sold from branded dealers. I have purchased extended warranties several times in the past and it only occurs to me once I used them. Whether you're standing in line at Best Buy or shopping online, you can't buy a new laptop or TV without being pressured to shell out even more money on an extended warranty.

However, many extended mobile phone warranties only cover defective parts and are useless if your phone is lost, stolen or damaged. No matter what the product is, usually when you need to repair something, it's not covered by an extended warranty. And they will purposely sell you an extended warranty that ends before then, which means that the odds that you will actually be able to use the warranty are quite low. One of the reasons retailers push for extended warranties is that, if enough are sold, they can lower retail prices for products and sell even more.

Warranty length varies by manufacturer, but many offer comprehensive warranties for three years or 36,000 miles, whichever comes first. But your extended warranty may not cover your house, you may be struck by lightning and frying your TV, or you may be so angry with the loss of your favorite sports equipment that you throw your plate of chicken wings on the screen. Ask 10 different people what they think about buying an extended warranty and you'll probably get 10 different answers. Warranties or extended service plans work like insurance, Hunter said, and for every dollar you spend, you'll only get pennies.

As long as a product, even a refurbished product, has some kind of manufacturer's warranty to begin with, most major credit cards will offer an extended warranty. There are often many restrictions with extended warranties, including what is covered and where the vehicle can be repaired. . .

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