Extended warranties are everywhere. Whether it's a car or a device, extended warranties are almost always a waste of money.
The best guarantee is a savings account.
Extended warranties are rarely worth your money. Products do not break by themselves and if so, 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 warranties. That's great! Take a moment to wonder why a company would offer you an extended warranty. The answer is because they are profitable.
According to Warranty Week a newsletter that deals with service plans, the extended warranties amount to $ 40 billion. This number alone indicates that extended guarantees are heavily overpriced and rarely used.
In most cases, it's best to skip the extended warranty and use your extra money to set up an emergency fund. But every situation is different and some extended guarantees are more useful than others. That's why we researched some popular products that usually offer extended warranties and explain if they are worth your money.
Extended warranties for cars are fraud
Extended warranties for cars are a huge scam. They do not exist to make people's lives easier, and they are not worth their money. Of course, the situation is different for everyone. For example, if you get a cheap extended warranty on a car that has many miles, it may be worth reconsidering the pros and cons.
Dealers offer extended warranties to increase the reduced prices on the exhibit floor and improve people in the last second in high-yield, low-paid stores and to ensure that people go to maintenance dealers (instead of small businesses and competitors ) go. In addition, extended guarantees are not always respected in car dealerships, and most of the money goes into a dealer's commission, not a social security program for vehicles.
The average warranty extension for a car is between $ 350 and $ 750 a year (plus interest if you add the warranty cost to your loan). In most cases, an extended warranty does not cover routine maintenance (which costs less than $ 100 a year on payment and prevents most unexpected mishaps).
If you take these 350-700 dollars and put them in your pocket In your savings account you have more than enough money to pay for any surprise repairs. If you encounter a problem that is too expensive (for example, a replacement engine), you can sell your car and use your savings as a down payment for a new one. In this way you also avoid the depreciation of blue books and future mishaps (after a serious mistake, cars usually suck money out of your wallet).
Sometimes, however, it may be worthwhile to get an extended warranty for certain auto parts or paintwork jobs. For example, if you are notorious for ruining your tires, then you can save a lot of money with a warranty the next time you drive in an apartment.
Freight Forwarding Insurance Pays Off Normally
Americans break 5,761 smartphone screens every hour. Bear in mind that most smartphones experience charging problems or reduced battery capacity within a few years. In addition, phones are becoming more expensive. They know where we are going.
For all these reasons, the additional cost of an extended warranty (commonly referred to as a carrier insurance) is usually good for your smartphone. Some manufacturers will replace your phone completely if it breaks, or cover repairs (broken screens) throughout its lifetime. Even if you do not take out the warranty, phones are fragile and it's good to know that you do not have to pay $ 1,000 to replace an iPhone that falls on the concrete.
Just make sure that you understand the terms of your extended warranty before you withdraw cash. Some network operators only replace your phone when it is fully paid, and others require reduced payments for repairs.
Computers and electronics rarely require warranties.
Retailers such as Amazon and Best Buy offer extended warranties for computers and electronics, which, like cars, are mostly unusable, adding to discounts and competitive pricing Offer a laptop with a $ 50 discount when 50% of buyers are willing to pay for a $ 100 Geek Squad Guarantee, etc.
There's no point buying a cheap electronics warranty Find out quickly Why you may (or may not) wish for a warranty on expensive electronics:
- Desktop Computers : Com computers should not break by themselves. If you are worried that your new desktop will break for no reason, you are giving out this additional guaranty for a more reliable computer.
- Laptops : Bringing your laptop into dangerous situations can result in a warranty extension. Value the money – just make sure it covers stupid accidents.
- Computer Parts : If something breaks on your computer, it's usually because it's been mistreated. Manufacturer's warranties cover manufacturing defects. Skip the extended warranty unless you have serious butter fingers.
- Game Consoles : Gaming companies are still squeamish in the red ring of death disputes. So skip the warranty for your next Xbox. If there are problems, the manufacturer will probably take care of it for free or inexpensively.
Overall, does not require extended warranties for computers and electronics. However, if you are worried that something will break, a guarantee may be worth the effort. However, if possible, consider buying a more reliable product.
Devices do not require extended warranties
Almost a third of all people buy extended warranties for their devices, and these are often left unused. When used, this is usually the case with manufacturer warranty problems, e.g. B. with defective sensors in refrigerators or washing machines.
For equipment, the manufacturer's warranty typically extends to a decade of use. In addition, house warranties usually cover the repair of equipment, and homeowner's insurance pays for all covered losses. No, you should not buy an extended warranty for your equipment. If you are worried about having to pay for repairs, write half of the cost of a warranty extension into your savings account. This will usually cover a few years of repair work.