Extended Warranties...

When should you buy an extended warranty on electronics, computers, any type of purchase like that? Never, never, never, not ever. When should you buy an extended warranty on appliances? Same answer. When should you buy a warranty on an existing home? Only if you are selling the home and you want to provide it as a sales tool to a potential buyer, a confidence builder that you are providing a warranty. The only other exception to buying an extended warranty is, potentially, a car or heavy machinery. You buy an extended warranty on a these if you know that you don’t have the savings to pay for repairs to a major component. But with any warranty of any kind, remember this: they'll talk to you in the stores about how you're protecting your investment. Let me tell you something. A television is not an investment. A washing machine is not an investment. Whatever item it is, you're not investing in it. You're spending money to have it. I just want you to know that anytime anybody at any retail store tells you that others buy extended warranties on their products, all you need to know is, they're lying. Employees get a commission on how many warranties they sell.

Not only do they get commission, they are generally forced, against their will in some cases, to try to pimp these on every product they sell. I worked at CompUSA back as my first job ever, and we had to try to sell 1 year mfgr warranty extension plans on any hardware sold (except for computers and printers which had their own set of extended warranty plans). I actually sold a $10 dollar 1 year extension to a guy who was buying a $20 keyboard that had a lifetime warranty. Didn't want to do it. HAD to do it.

Often times these plans are the only reason the stores can sell certain products at a low price, sometimes even below cost. The warranty plans are almost pure profit, since most people don't end up needing them, or do need them but forget they had gotten in, or remember they have it, but get disqualified from coverage because it falls under some exclusion in the coverage. It is basically the same exact principle of insurance. They bank on the fact that more people will buy and not use, than buy and file a claim.

Well... I recently ran into this issue... I was offered extended lifetime warranties on my tires in Dec for $25 each... I didn't get it. The recent flat tire I had, which was my own fault, would have been covered under this warranty.

Considering it costs me $200-250 a tire... it would have been a good saver for me.

Most warranties are a rip off; however, there are times when they can be a good thing.

Wakko wrote:

Well... I recently ran into this issue... I was offered extended lifetime warranties on my tires in Dec for $25 each... I didn't get it. The recent flat tire I had, which was my own fault, would have been covered under this warranty.

Considering it costs me $200-250 a tire... it would have been a good saver for me.

Most warranties are a rip off; however, there are times when they can be a good thing.

Well that is pretty much it, and the law of averages says that you will not use an extended warranty more often than you will use it, so if you were to purchase it on everything for that eventual issue you have with one thing, it would cost you more in the long run. I bought tires once at a local place and then hit a piece of curb that had broken off and was laying in the street on a tight turn. It put a big bulge in the tire wall which makes the tire unsafe. I went to get another, expecting to pay the 175 for the tire, but it cost me 30 bucks because they came with a year of road hazzard coverage included for 1 year.