Extended Warranties A Waste Of Money

[jeffrey]

Consumer Reports is saying people will waste $1.6 billion on extended warranties for various electronics and appliances this holiday season because, for the most part, they are useless.

The reason that the sales reps push them so hard is not to protect you, but to line their pockets since they make a huge amount of money on them. When you pay for a warranty, more than half can get kicked back to the store selling the policy which means that in many instances, the store makes more selling the warranty than when they sell you the product.




Two possible exception to this rule of passing on extended warranties noted in the article were rear-projection microdisplay TV (costly to repair and need to be repaired 300% more frequently than other TVs) and Apple Computers (because it also includes tech support)

The best defense against needing extended warranties is to purchase quality products that have a record of lasting and not having trouble. You may have to pay a bit more for these, but often times it will end up being less if you factor in not needing an extended warranty compared to a cheaper model that does need one. It also pays to find products that come with a quality manufacturer’s warranty (these are getting harder to find as many manufacturers are cutting their warranties to save money, but research should turn up some that still stand behind their products).

If you purchase a lot of electronics, your might consider getting a credit card that offers extended warranty service on all the items purchased using it (many credit cards do offer extended warranties with their “gold” and “platinum” credit cards). Knowing that you have this extended warranty already in hand when you go to purchase products makes it much easier to brush aside the hard sell sales pitch.

Source: Consumer Reports

[mstrohm]

Today we will pick up the third portable DVD player for my daughter. We rarely purchase extended warranties, but the young man who sold us the DVD player insisted we buy it because he saw so many problems. He was right. For some protable electronics it is worth it!

[PRICEPLUS]

Buy cheap and pay dear. I have always found that if you buy a quality product you don't need the extended warranty.

[mstrohm]

I agree - I rarely get warrenties. We did not buy the cheap $79 player! But when you combine a young teen and a portable device - you have trouble!

[rurugby]

When I worked at a department store, they pushed extended warranties like you wouldn't believe and it was one of the measure of judging their salesman.

They almost seemed more concerned by the warranties then total sales.

It is one reason among many I left the store.

Sometimes they can be helpful, but often they are just a cash cow.

My two cents.

[fairy74]

I hate extended warranties---RIP OFF! I once got into an slight altercation with a staples store manager who told me I "had to purchase the extended warranty". When I left without it, I could hear him yelling at the young sales clerk for not pushing it hard enough!

[Elgin526]

I've only ever bought one once, it was to protect our $1000 LCD HDTV we bought. For that kind of money, I'd rather have the warenty. The set has a good reputation, but with our luck we'd get the one lemon off the assembly line!

But 99.99999% of the time, I agree, better to go without it and just buy quality.

[dossin1]

Originally Posted by mstrohm

Today we will pick up the third portable DVD player for my daughter. We rarely purchase extended warranties, but the young man who sold us the DVD player insisted we buy it because he saw so many problems. He was right. For some protable electronics it is worth it!

You too?!!! I have one of these in my linen closet. This is definately one time a warranty would have been the right move.

[Diolla]

My favorite was the sales guy who insisted we needed the extended warranty because "These things break down all the time" so DH said "If it's that unreliable I guess we won't buy it" and walked out.

[irmanator]

Originally Posted by Diolla

My favorite was the sales guy who insisted we needed the extended warranty because "These things break down all the time" so DH said "If it's that unreliable I guess we won't buy it" and walked out.

lol I would've done that too

[am_vanquish]

My wife bought a computer last October & the sales guy told us to buy the extra "accidental" coverage and break the computer on purpose before it ran out. According to him, it happens all the time (especially among his fellow employees). I resisted on moral grounds, but my wife got it because it was her purchase ... plus she has no backbone (j/k).

Anyways, she paid $100 for the coverage and last month she "spilled" some root beer on it that fried the motherboard and "dropped" it on the ground in the panic to try to save it cracking the screen. One week later, we're standing in line at the store with our brand-new $900 laptop ... complete with Windows 7 and a Blu-Ray player (it's a good bit better than the one we had originally). We didn't pay a dime.

On one level, I feel like a cheat. However, DW won me over when she pointed out that we basically just broke even with all the other warranties we've had in our life that we never used.

[boosami]

It seems like everything these days has an "extended warranty" or "service plan" option. I'm pretty sure Best Buy just adds to automatically during checkout no matter what you're buying. I always decline of course since my Amex benefits cover everything. I've had some ridiculous offerings lately... For example, an extended service plan for a flashlight. Yes, a flashlight.

Anyone else had some funny ones?

[irmanator]

for a pair of 14.95 hair clippers at kmart

[donlat3]

Dirty salesman! I knew they were getting some kind of commission on it. I've had some mix their stories up at the beginning and end of their pitch as to why I needed to purchase extended protection.

[Goldy1]

When I go to Babies r us to buy my son a $20 toy that has some electronics on it, they offer me a warranty. Ha!

[Alex_Adviser]

Hello every one,
I think warranty extension is depend upon the type of product, its usage and its prize. If it's a costly product and more usable then it's good to extend it's warranty.

[mikesaver]

Not all stores give commissions out for extended warranties. Babies R Us definitely doesn't, but they are all trained to ask every time. Most employees could care less but some do try hard to get people to sign up.

[disneysteve]

Originally Posted by boosami

It seems like everything these days has an "extended warranty" or "service plan" option. I'm pretty sure Best Buy just adds to automatically during checkout no matter what you're buying. I always decline of course since my Amex benefits cover everything. I've had some ridiculous offerings lately... For example, an extended service plan for a flashlight. Yes, a flashlight.

Anyone else had some funny ones?

I went to Radio Shack to buy a printing calculator. I think it was $39. The cashier tried to get me to buy the extended warranty for $19.