Why Extended Warranties Aren’t Worth It December 14
Many companies offer extended warranties on their products at the point of purchase. When you go to a large electronics store, for example, and buy a camera or CD player you will usually be offered an extended warranty at check-out. The warranty might cost $10-20, and the impulse of most consumers is to go ahead and buy it in case something goes wrong with their item. But according to consumer experts most of those warranties are not worth buying.
That’s because whatever is being covered by an extended warranty should at least last until the basic manufacturer’s warranty expires. Most serious repairs or problems happen as soon as you get the merchandise home, and most stores will let you return those kinds of bad products under the basic warranty. Buying extended warranties on these items is usually not worth the cost, however, because they only cover specific problems under certain narrowly defined legal conditions.
The other big reason to think twice before buying extended warranties is that they are essentially a form of insurance, but many of these consumer warranty companies are only around for a few years and then they go out of business. So even if you have a valid claim in a year or two, the extended warranty company may not be around to honor it so the warranty will be useless.
A better strategy is to invest time in reading consumer research and reviews of the products you buy before you purchase them. Instead of expecting the item to malfunction and buying an extended warranty to protect you, in other words, spend time choosing the best product and shopping around for the best price. Buy from reputable merchants who stand behind their products with responsive customer service so that if you do have a problem they will resolve it to your satisfaction. The money saved on not buying extra warranties can be used to buy better quality, and that should serve you better in terms of product dependability and performance over the long haul.