We’ve all gotten those annoying spam calls about your car’s extended warranties. While warranties might seem like a good way to protect your larger purchases, they aren’t often worth the money. Retailers often push them, but these warranties typically have limited coverage overall. Here is why you should stop paying for this coverage.
1. Most Products Rarely Break During the Warranty Period
Generally speaking, most products, whether it’s a car or an appliance, don’t break during the warranty period. Manufacturers design items like electronics and appliances to last longer than the warranty on purpose. By the time something goes wrong, your warranty has likely expired and you spent money on it for no reason. Additionally, the problems that do come up within the warranty window are often less costly than the warranty itself. Rather than spending money on an extended warranty, you should set aside money for emergencies. It’ll serve you better in the long run.
2. Manufacturer Warranties Already Provide Coverage
Most items already come with a manufacturer’s warranty. This covers defects and repairs for a set period of time, usually one to two years. An extended warranty overlaps with the coverage provided by the manufacturer. Oftentimes, the coverage is redundant and they might even run out around the same time. Usually, a manufacturer’s warranty will provide you with enough protection. Check the terms of the coverage offered by the manufacturer before you spring for an extended warranty.
3. Extended Warranties Come With Too Many Exclusions
You might notice that extended warranties are often riddled with fine print. As a result, many people don’t recognize what they’re actually buying. These warranties will often exclude common issues, like accidental damage or software problems. So, when something does break, there’s a good chance that the extended warranty won’t cover it anyway. Be sure to read the fine print carefully if you are considering springing for additional coverage. You may discover it’s not worth it.
4. You Can Repair or Replace Many Items Cheaper Than You Think
Repairs and replacements are often cheaper than the extended warranties. Small electronics, appliances, and other gadgets often have cheaper repair costs than you’d think. Third-party repair shops can help you slash the cost of repairs. In some cases, buying a new one might be more affordable. When all is said and done, saving the money you would have spent on a warranty is a better move.
5. Extended Warranties Are Big Business for Retailers
Retailers make a good amount of money from their extended warranties and people usually never even use them. In fact, stores might profit more from the sale of these warranties than from selling the products themselves. They try to pressure consumers into feeling like they need the coverage at checkout. As mentioned, these warranties often never get used. So, all the money goes straight into the retailer’s pockets. They’re literally banking on you spending money that you don’t need to spend.
6. Credit Cards Often Offer Free Protection
Again, you are likely purchasing coverage that overlaps. Many credit cards already provide free extended warranties on certain purchases. They may extend the manufacturer’s warranty by a year or cover accidental damage at no cost. Having this built-in coverage will let you bypass whatever warranty the store is trying to sell. As always, make sure you read the fine print on the terms of the warranty provided through your credit card company.
Save Your Money and Skip the Warranty
At the end of the day, you should probably skip the extended warranty and pocket the cash. It’s a much better idea to have the cash set aside for an emergency than sitting on a warranty that you’ll likely never use. While the retailers will make it sound like a good investment, the protection provided won’t likely justify the overall cost. Keep these things in mind before you purchase a warranty.