Are extended warranties ever worth the money?
You buy some high end television or smartphone after mulling it over for weeks, and then you have about 15 seconds to consider buying what amounts to an overpriced insurance policy on it.
When prompted, do you usually sign up for an extended warranty?
Many do, of course, even though consumer experts have long recommended against buying extended warranties, a high-margin profit centre for retailers.
Most products don't break down within the warranty period and even when they do, repair fees generally end up costing the same as money you shelled out, they maintain.
As well, sales staff regularly mislead customers when they sell extended warranties, according to a recent BBC report. And, if these folks are to be believed, the same thing happens on this side of the ocean.
Truth is, buying a warranty isn't really a financial decision at all -- it's about regret, which is a very uncomfortable feeling that we all try to avoid, says Dan Ariely, author of Predictably Irrational.
And because we want to prevent that feeling, we're all too willing to do something that's actually not that financially wise. Most of us simply want to know that we won't have to worry about this down the road. And as a consequence, we often pay too much money for that solace, he maintains.
If you're the type that might sleep easier thanks to the additional peace of mind an extended warranty might offer, go right ahead. But at least unsterstand why, he suggests.
Do you generally buy extended warranties? Using what criteria? How have things worked out?
By Gordon Powers, MSN Money
Posted by: Really !! | Feb 7, 2022 10:54:56 AM
In 2002... I purchased a new Chrysler Sebring with a 3 year bumper-to-bumper warranty and 5 year powertrain warranty. Close to the end of the initial 3 years, I purchased an extended 3 years for the bumper-to-bumper protection. It was definitely worth it !! Other than that, I NEVER purchase extended warranties for anything. As the article states, it's 100% profit for the seller and a total rip off.
Posted by: John | Feb 8, 2022 5:55:06 PM
I agree with Really!!.... I never buy extended warranties. Even though once in a while (but rarely), the product I had bought bites the dust prematurely, but in the long run, I am well ahead. The only extended warranty I might buy is on a car, if it is reasonable.
Posted by: Graeme | Feb 9, 2022 11:58:50 AM
Use the "FREE" extended warranties that come with credit cards...I have benefited from them several times...you can extend a warranty for up to a year.
Posted by: Rebecca Croston | Feb 11, 2022 9:08:25 AM
I definately buy extended warranty on items such as cars, refrigerators, dishwashers and washing machines. I have never been sorry that I purchased them as I have had to always use them. The extended warranty on my vehicle was a great relief as at the time there was no way I could afford the repairs. Thank goodnes the warranty covered everything.
Posted by: Walter | Feb 11, 2022 9:23:34 AM
I don't know how you can afford not to buy extended warranties on big ticket items.The quality has changed and continues to get worse every year. This writer is sure out of touch
Posted by: marksie | Feb 11, 2022 9:41:24 AM
You need to read the fine print on these often useless warranties. I bought a home theater system at a popular electronics retailer at a discounted price. When the subwoofer went down I made a claim under the extended warranty. The system was no longer available for exchange or replacement. They would not pay to repair the sub. I was told I would have to rip out my system and get my original investment back. I could not replace my system at the refund rate.
Posted by: Pete | Feb 11, 2022 10:07:33 AM
I agree with Walter totally
I buy lots of electronics, and have bought many new appliances. They darn sure dont make them too last not. And have not "lost" on the additional coverage. I think just LG alone lost money on me...they repaired and replaced about 5 DVDs
Posted by: Peter Browne | Feb 11, 2022 11:34:52 AM
Car extended warranties have always broken even, or came out ahead. (Mostly ahead.)
Sears Major Appliance warranty monies, are given back at the end of the warranty period if not used. Credit is in Sears Dollars. At the time of my last purchase of 4 major appliances, the warranties, because we bought 4, were discounted 20%. (They may be hoping by the end of the 5 years you forgot about it! Mine - tacked on the wall with a big 2017 wriiten on it!)
Electronics - never usually keep long enough before replacing with newer, better.
Wife - didn't come with one, or option for one! Take it or leave it proposition!
Posted by: I call foul | Feb 11, 2022 12:19:27 PM
An extended warranty CAN be a lifesaver and need not put you out the money. A lot depends on the company offering the extended warranty.
A certain large chain electronics chain has extended warranties that are in my opinion not worth the paper they are printed on, Sears on the other hand has extended warranties that you get it all back if you don't have a problem with the appliance. And it covers aspects that the manufacturer does not, IE; power surges damaging the electronics, food loss (in fridges).
I personally know a few people that were extremely glad they made that choice
If you say extended warranties are not worth it as a blanket statement, you are offering a prejudiced answer that may not be the truth nor the right choice for many people.
Know the REAL facts.
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